Member Article

On November 15, 2011, existing facilities subject to the federal Spill Pollution Control and Countermeasure Rule (“SPCC Rule”), 40 C.F.R. Part 112, were required to finalize and implement a plan—known as an “SPCC plan”—detailing the equipment, workforce, procedures and steps to be taken to prevent, control and provide adequate countermeasures to a discharge of oil to navigable waters of the United States or adjoining shorelines.  In a recent webinar coordinated by the Independent Petroleum Association of America and made available to members of IOGA-WV’s Environmental & Safety Committee, representatives of the United States Environmental Protection Agency (“USEPA”) provided a comprehensive summary of the SPCC Rule and its application to oil and gas operations.  This article presents a general overview of the requirements of the SPCC Rule.

A facility is subject to the SPCC Rule if the following conditions are met:  (1) the facility is a non-transportation-related onshore or offshore facility engaged in drilling, producing, gathering, storing, processing, refining, transferring, distributing, using or consuming oil and oil products; (2) the facility “could reasonably be expected to discharge oil in quantities that may be harmful”[1] into navigable waters or adjoining shorelines; and (3) the facility either (a) has an aggregate above-ground oil storage capacity greater than 1,320 gallons, discounting containers with storage capacity of less than 55 gallons, or (b) has an aggregate completely buried oil storage capacity greater than 42,000 gallons.  For purposes of this rule, “oil” is broadly defined to encompass “oil of any kind or in any form.”  Notably, both condensate and produced water containing any trace of oil are considered “oil” under the SPCC Rule, and thus must be considered when evaluating the rule’s applicability.  Natural gas, including liquid natural gas or liquid petroleum gas, is not considered an oil.

Several aspects of the SPCC Rule’s scope are noteworthy.  First, the SPCC Rule’s definition of “facility” allows the owner or operator to determine what constitutes the boundary of that facility upon consideration of a number of site-specific factors, including but not limited to being an owner or operator of buildings, structures and equipment on the same site and types of activity at the site.  However, USEPA has confirmed that contiguous or non-contiguous buildings, properties, parcels, leases, structures, installations, pipes or pipelines under the ownership or operation of the same person may be considered separate facilities for purposes of the SPCC Rule.  Thus, the owner or operator has considerable flexibility to aggregate or disaggregate certain containers in defining the “facility,” although USEPA has clarified that “an owner or operator may not characterize a facility so as to simply avoid applicability of the rule (for example, defining separate facilities around oil storage containers that are located side-by-side or within close proximity, and are used for the same purpose.”

Second, for purposes of calculating the facility’s total oil storage capacity, the owner or operator must add up the capacity of all bulk storage containers and oil-filled equipment.  In making this calculation, however, the owner or operator may exclude containers with a capacity of less than 55 gallons, “permanently closed” containers (as defined), storage containers used exclusively for wastewater treatment, and completely buried tanks subject to all technical requirements of 40 C.F.R. Parts 280 and 281 (underground storage tank regulations).  Transportation-related facilities—such as interstate or inter-facility oil pipeline systems, or ships, barges, rail cars or tankers transporting oil between facilities—also are excluded from coverage under the SPCC Rule, although vehicles and pipeline systems used to transport oil exclusively within the confines of a single facility are subject to the Rule’s requirements.

Finally, the determination of whether a particular facility could “reasonably discharge” oil into navigable waters of the United States is a site-specific assessment that must be made by the owner or operator, taking into consideration the geography and location of the facility relative to nearby navigable waters or adjoining shorelines, including land contour, soil condition, and drainage systems or precipitation runoff that could transport an oil spill to navigable waters.  The volume and flow characteristics of the oil at the facility should also be evaluated.  Significantly, the owner or operator cannot consider manmade features such as dikes, equipment or other structures that might prevent or contain the flow of oil in making this determination, and thus must evaluate the applicability of the SPCC Rule under the assumption that such features are not present.  Although not required under the SPCC Rule, if an owner or operator concludes, after a careful evaluation of these factors, that its facility could not “reasonably discharge” oil into navigable waters of the United States and thus is not subject to the Rule, it is nevertheless prudent for such an owner or operator to document the basis and rationale underlying its determination.

As noted above, a central element of the SPCC Rule is the requirement that covered facilities must develop, maintain and implement a SPCC plan.  Although the SPCC plan will be unique to the individual facility, certain general elements must be included in every plan, including a facility diagram and description of the facility; oil discharge predictions; description of the type of oil in each fixed container and its storage capacity; description of discharge prevention measures and discharge or drainage controls (secondary containment or diversionary structures); site security; facility inspections; integrity testing requirements; countermeasures for discharge discovery, response and cleanup; methods of disposal of recovered materials; and a five-year plan review.  SPCC plans for onshore oil production facilities (excluding drilling and workover facilities) must comply with additional specific discharge prevention and containment measures relating to the oil production facility drainage, oil production facility bulk storage containers, flow-through process vessels, produced water containers, and facility transfer operations.  Onshore drilling and workover facilities must position or locate mobile drilling or workover equipment so as to prevent a discharge to navigable waters, provide catchment basins or diversion structures to intercept and contain discharges, and install a blowout prevention assembly and well control system before drilling below any casing string or during workover operations.

Generally, a facility’s SPCC Plan must be certified by a licensed professional engineer.  However, a facility owner or operator may self-certify its SPCC plan if (1) the facility has an aggregate above-ground oil storage capacity of 10,000 gallons or less and (2) in the three years prior to the self-certification date, the facility has had no single discharge of oil to navigable waters or adjoining shorelines exceeding 1,000 gallons or no two such discharges exceeding 42 gallons within any 12-month period.[2]  Finally, a facility’s SPCC plan does not have to be submitted to USEPA, but rather must be submitted upon request.  A copy of the SPCC plan should be maintained at any facility normally attended at least four hours per day, or at the nearest field office if the facility is not so attended.

With the exception of offshore facilities and those onshore facilities required to have Facility Response Plans,[3] which were required to comply with the SPCC Rule by November 10, 2010, the compliance date for the remainder of covered facilities was November 10, 2011.  For onshore production facilities that become operational after November 10, 2011, however, SPCC plans must be prepared and implemented within six months after beginning operation.