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Print articleAboveground Storage Tanks: New Interpretive Rule and Draft Emergency Rule
March, 2017 - Mark D. Clark
By the time you are reading this, the October 1 deadline to register all aboveground storage tanks (“ASTs”) in West Virginia has passed, and the world is still turning. If you have not yet registered your ASTs, it is still a good idea to register any tanks that qualify as ASTs as soon as you can. However, the West Virginia Department of Environmental Protection (“WVDEP”) is proceeding with implementation of the Aboveground Storage Tank Act, W. Va. Code § 22-30-1, et seq. (“AST Act”), by the filing of an interpretive rule intended to address the AST Act requirements through January 1, 2015, and by releasing a “rough draft” emergency rule intended to pick up where the interpretive rule leaves off.
Interpretive Rule
On September 9, 2014, WVDEP filed a proposed interpretive rule (the “Interpretive Rule”) with the West Virginia Secretary of State’s office. An interpretive rule is defined under the West Virginia Administrative Procedures Act as a rule that “is intended by the agency to provide information or guidance to the public regarding the agency’s interpretation, policy or opinions upon the law enforced or administered by it . . . .” W. Va. Code § 29A-1-2(c). The Interpretive Rule, 47 C.S.R. 62, is subject to a public comment period closing on October 9, 2014 at 8:30 p.m.[1] A public hearing will be held on October 9, 2014 at 6:30 p.m. at WVDEP’s headquarters in Charleston, West Virginia. The Interpretive Rule is available for download from the Secretary of State’s website at http://apps.sos.wv.gov/adlaw/csr/readfile.aspx?DocId=26199&Format=PDF.
The Interpretive Rule, which is intended to establish a risk-based regulatory approach, creates three “levels” of ASTs based on their potential harm to health and the environment and establishes options for compliance with certain requirements of the AST Act based on these levels. Importantly, the Interpretive Rule focuses only on the statutory requirements for (a) the submittal of a spill prevention response plan (“SPR Plan”) by December 3, 2014, and (b) the inspection and certification of tanks by January 1, 2015. The Interpretive Rule does not address registration, and therefore the requirement to submit a registration for all ASTs as defined in W. Va. Code § 22-30-3(1) by October 1, 2014 remained unchanged. The three levels of ASTs are:
Level 1 ASTs have the potential for high risk of harm to public health or the environment due to its contents, size or location and includes any AST: (i) located within a zone of critical concern (“ZCC”), wellhead protection area or groundwater intake area under the influence of surface water, (ii) that contains substances defined as a “hazardous substance” under the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601(14) et seq., or (iii) with a capacity of 50,000 gallons or more, regardless of location or contents, or (iv) designated, on a case by case basis, by WVDEP as a Level 1 AST.
Level 2 ASTs have the potential for a lesser risk of harm to public health or the environment than a Level 1 AST, and encompasses those ASTs that do not meet the definition of a Level 1 or a Level 3 tank. Level 2 is effectively the catch-all category and most oil and gas industry tanks containing oil or brine will be categorized as Level 2, unless the AST is located in a ZCC or its capacity is greater than 50,000 gallons.
Level 3 ASTs are those ASTs determined by the Secretary to have a low risk of harm to public health or the environment—either because of their contents, size or location, or because they are already subject to strict regulations under another program—and expressly includes “ASTs containing potable water, filtered surface water, demineralized water, noncontact cooling water or water stored for fire or emergency purposes, food or food-grade materials, or hazardous waste tanks subject to regulation under W. Va. Code §§ 22-18-1 et seq. and 40 C.F.R. § 264.” 47 C.S.R. 62-2.4.
Because most ASTs associated with oil and gas wells will be Level 2 ASTs, the following requirements for Level 2 ASTs are offered for purposes of illustration:
Please note that the Interpretive Rule is intended to provide “guidance and clarification” for purposes of compliance with the initial inspection and certification deadlines and SPR Plan requirements. By its terms, the Interpretive Rule would remain in effect only through June 1, 2015, unless sooner terminated, continued or re-established as a legislative rule.
Draft Emergency Rule
On September 19, 2014, WVDEP published on its website what it characterizes as a “rough draft” of its forthcoming emergency rule (the “Draft Rule”), which is 79 pages in length. The scope of the Draft Rule is extensive and many of its provisions are highly technical in nature. With regard to registration, the Draft Rule adds to the AST registration program established in Section 4 of the AST Act by imposing additional requirements for the amendment and annual renewal of registrations. The Draft Rule also contemplates the filing of separate notifications in the event of AST closure, change in service or change in ownership. In addition to the registration requirements, the Draft Rule provides for the issuance by WVDEP of certificates to operate for each AST, and would establish siting restrictions for new ASTs.
With regard to AST operation and maintenance, the Draft Rule establishes detailed requirements relating to life-cycle preventive maintenance planning, routine maintenance inspections, annual inspections, internal inspections, damaged tanks, spill prevention response planning, labeling and signage, and security. The Draft Rule also would impose substantive standards and requirements for (1) AST design, construction and installation, including ancillary equipment and piping; (2) corrosion and deterioration prevention, which specifically address cathodic protection systems, and exterior and interior coatings; and (3) release prevention, leak detection and secondary containment. The Draft Rule’s requirements relating to release detection and corrective action are particularly extensive, spanning almost a quarter of the entire rule. Perhaps most troubling are requirements that appear to require retrofitting of existing tanks by June 30, 2016 to comply with at least some of the new standards contained in the Draft Rule.
There are certain notable omissions in the Draft Rule. First, it does not establish any of the fees contemplated by the AST Act (i.e., the initial or annual registration fee, AST Administrative Fund fee or Protect Our Water Fund fee), although it does reference a separate, as-yet-unpublished Aboveground Storage Tank Fee Assessment Rule that presumably will be forthcoming. Second, the Draft Rule does not address financial responsibility requirements—this section is merely “reserved.” Finally, and perhaps more importantly, nowhere does the Draft Rule appear to incorporate the “permitting waiver” concept established in Section 25 of the AST Act, W. Va. Code § 22-30-25, which was expected to provide a measure of relief for certain categories of tanks, including those having spill prevention, control and countermeasure plans in accordance with 40 C.F.R. Part 112.
WVDEP has invited comments on the Draft Rule by October 24, 2014, and held a working meeting of interested stakeholders on October 1, 2014. IOGA will continue to work diligently to represent the interests of its members as the implementation of the AST Act progresses. The details of the Draft Rule are too numerous to include in this article but if you have questions or comments about the AST Act or these new rules, please contact Mark Clark at [email protected] or Katherine Crockett at [email protected].
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Interpretive Rule
On September 9, 2014, WVDEP filed a proposed interpretive rule (the “Interpretive Rule”) with the West Virginia Secretary of State’s office. An interpretive rule is defined under the West Virginia Administrative Procedures Act as a rule that “is intended by the agency to provide information or guidance to the public regarding the agency’s interpretation, policy or opinions upon the law enforced or administered by it . . . .” W. Va. Code § 29A-1-2(c). The Interpretive Rule, 47 C.S.R. 62, is subject to a public comment period closing on October 9, 2014 at 8:30 p.m.[1] A public hearing will be held on October 9, 2014 at 6:30 p.m. at WVDEP’s headquarters in Charleston, West Virginia. The Interpretive Rule is available for download from the Secretary of State’s website at http://apps.sos.wv.gov/adlaw/csr/readfile.aspx?DocId=26199&Format=PDF.
The Interpretive Rule, which is intended to establish a risk-based regulatory approach, creates three “levels” of ASTs based on their potential harm to health and the environment and establishes options for compliance with certain requirements of the AST Act based on these levels. Importantly, the Interpretive Rule focuses only on the statutory requirements for (a) the submittal of a spill prevention response plan (“SPR Plan”) by December 3, 2014, and (b) the inspection and certification of tanks by January 1, 2015. The Interpretive Rule does not address registration, and therefore the requirement to submit a registration for all ASTs as defined in W. Va. Code § 22-30-3(1) by October 1, 2014 remained unchanged. The three levels of ASTs are:
Level 1 ASTs have the potential for high risk of harm to public health or the environment due to its contents, size or location and includes any AST: (i) located within a zone of critical concern (“ZCC”), wellhead protection area or groundwater intake area under the influence of surface water, (ii) that contains substances defined as a “hazardous substance” under the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601(14) et seq., or (iii) with a capacity of 50,000 gallons or more, regardless of location or contents, or (iv) designated, on a case by case basis, by WVDEP as a Level 1 AST.
Level 2 ASTs have the potential for a lesser risk of harm to public health or the environment than a Level 1 AST, and encompasses those ASTs that do not meet the definition of a Level 1 or a Level 3 tank. Level 2 is effectively the catch-all category and most oil and gas industry tanks containing oil or brine will be categorized as Level 2, unless the AST is located in a ZCC or its capacity is greater than 50,000 gallons.
Level 3 ASTs are those ASTs determined by the Secretary to have a low risk of harm to public health or the environment—either because of their contents, size or location, or because they are already subject to strict regulations under another program—and expressly includes “ASTs containing potable water, filtered surface water, demineralized water, noncontact cooling water or water stored for fire or emergency purposes, food or food-grade materials, or hazardous waste tanks subject to regulation under W. Va. Code §§ 22-18-1 et seq. and 40 C.F.R. § 264.” 47 C.S.R. 62-2.4.
Because most ASTs associated with oil and gas wells will be Level 2 ASTs, the following requirements for Level 2 ASTs are offered for purposes of illustration:
- While Level 1 ASTs must be certified by a qualified professional engineer, someone working under the direct supervision of the engineer, an American Petroleum Institute-certified inspector or a Steel Tank Institute-certified inspector, the Interpretive Rule authorizes the owner or operator, or “any person designated by the owner or operator of the AST” to perform inspections of Level 2 ASTs. The owner, operator, or designee may certify the inspection as well. 47 C.S.R. 62-3.2.
- With regard to SPR Plans, as an alternative to the requirements of W. Va. Code § 22-30-9 and Appendix C of the Interpretive Rule, the Interpretive Rule establishes certain circumstances under which owners or operators of Level 2 ASTs may submit or certify to, as appropriate, existing SPCC plans, groundwater protection plans, or other spill prevention plans. The Secretary may request additional information, if necessary, to ensure that any such plans conform with W. Va. Code § 22-30-9. 47 C.S.R. 62-4.2 and -4.3.
Please note that the Interpretive Rule is intended to provide “guidance and clarification” for purposes of compliance with the initial inspection and certification deadlines and SPR Plan requirements. By its terms, the Interpretive Rule would remain in effect only through June 1, 2015, unless sooner terminated, continued or re-established as a legislative rule.
Draft Emergency Rule
On September 19, 2014, WVDEP published on its website what it characterizes as a “rough draft” of its forthcoming emergency rule (the “Draft Rule”), which is 79 pages in length. The scope of the Draft Rule is extensive and many of its provisions are highly technical in nature. With regard to registration, the Draft Rule adds to the AST registration program established in Section 4 of the AST Act by imposing additional requirements for the amendment and annual renewal of registrations. The Draft Rule also contemplates the filing of separate notifications in the event of AST closure, change in service or change in ownership. In addition to the registration requirements, the Draft Rule provides for the issuance by WVDEP of certificates to operate for each AST, and would establish siting restrictions for new ASTs.
With regard to AST operation and maintenance, the Draft Rule establishes detailed requirements relating to life-cycle preventive maintenance planning, routine maintenance inspections, annual inspections, internal inspections, damaged tanks, spill prevention response planning, labeling and signage, and security. The Draft Rule also would impose substantive standards and requirements for (1) AST design, construction and installation, including ancillary equipment and piping; (2) corrosion and deterioration prevention, which specifically address cathodic protection systems, and exterior and interior coatings; and (3) release prevention, leak detection and secondary containment. The Draft Rule’s requirements relating to release detection and corrective action are particularly extensive, spanning almost a quarter of the entire rule. Perhaps most troubling are requirements that appear to require retrofitting of existing tanks by June 30, 2016 to comply with at least some of the new standards contained in the Draft Rule.
There are certain notable omissions in the Draft Rule. First, it does not establish any of the fees contemplated by the AST Act (i.e., the initial or annual registration fee, AST Administrative Fund fee or Protect Our Water Fund fee), although it does reference a separate, as-yet-unpublished Aboveground Storage Tank Fee Assessment Rule that presumably will be forthcoming. Second, the Draft Rule does not address financial responsibility requirements—this section is merely “reserved.” Finally, and perhaps more importantly, nowhere does the Draft Rule appear to incorporate the “permitting waiver” concept established in Section 25 of the AST Act, W. Va. Code § 22-30-25, which was expected to provide a measure of relief for certain categories of tanks, including those having spill prevention, control and countermeasure plans in accordance with 40 C.F.R. Part 112.
WVDEP has invited comments on the Draft Rule by October 24, 2014, and held a working meeting of interested stakeholders on October 1, 2014. IOGA will continue to work diligently to represent the interests of its members as the implementation of the AST Act progresses. The details of the Draft Rule are too numerous to include in this article but if you have questions or comments about the AST Act or these new rules, please contact Mark Clark at [email protected] or Katherine Crockett at [email protected].
[1] The earliest possible effective date for the Interpretive Rule is November 8, 2014, as, by statute, it cannot become effective until the expiration of 30 days following the notice of its adoption after the conclusion of the comment period. W. Va. Code § 29A-3-8.
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