Financial Responsibility Requirements Under CERCLA Section 108(b) for Facilities in the Petroleum and Coal Products Manufacturing Industry, 70467-70484 [2019-27066]
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Federal Register / Vol. 84, No. 246 / Monday, December 23, 2019 / Proposed Rules
begin about 6 months before a Congress
convenes.
II. Background
In Docket No. RM2015–14, the
Commission adopted rules formalizing
its procedures related to Commission
views submitted pursuant to 39 U.S.C.
407(c)(1).1 The adopted rules reflected
the Commission’s commitment to both
transparency and improved public
accessibility by establishing dockets that
informed the public about the availably
of relevant proposals, Commission
views, and other related documents, and
by allowing all documents to be
incorporated into one comprehensive
record.
III. Basis and Purpose of Proposed
Rules
In the years since the procedures
related Commission views were
established, the Commission has
participated in both traditional UPU
Congresses as well as two extraordinary
Congresses. In light of that experience,
the Commission is proposing minor
improvements to enhance transparency
and accountability within the
Commission views process as well as to
improve the accessibility of relevant
proposals, Commission views, and
related documents. The proposed rules
make clarifying changes that are
intended to better reflect the
Commission’s procedures related to the
posting of relevant proposals and
Commission views.
IV. Proposed Rules
List of Subjects for 39 CFR Part 3017
Administrative practice and
procedure, Postal Service, Treaties.
For the reasons stated in the
preamble, the Commission proposes to
amend chapter III of title 39 of the Code
of Federal Regulations as follows:
■ 1. Revise part 3017 to read as follows:
PART 3017—PROCEDURES RELATED
TO COMMISSION VIEWS
Sec.
3017.1
3017.2
3017.3
3017.4
3017.5
Definitions in this part.
Purpose.
Establishment and scope of docket.
Comment deadline(s).
Issuance of Commission views.
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Authority: 39 U.S.C. 407; 503.
§ 3017.1
Definitions in this part.
(a) Commission views refers to the
opinion the Commission provides to the
Secretary of State pursuant to 39 U.S.C.
407(c)(1) on the consistency of a
relevant proposal with modern rate
regulation.
(b) Modern rate regulation refers to
the standards and criteria the
Commission has established pursuant to
39 U.S.C. 3622.
(c) Relevant proposal means a
proposed change to a treaty, convention,
or amendment that establishes a market
dominant rate or classification.
§ 3017.2
§ 3017.3
docket.
generally, Docket No. RM2015–14, Order
Adopting Final Rules on Procedures Related to
Commission Views, December 20, 2015 (Order No.
2960).
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Establishment and scope of
(a) On or about 150 days before a
Universal Postal Union Congress
convenes or such advance time as the
Commission determines for any other 39
U.S.C. 407(c)(1) matter, the Commission
shall establish a docket in order to
solicit public comments as part of the
development of Commission views.
(b) The Commission shall post
relevant proposals in the applicable
docket established pursuant to
paragraph (a) of this section and may
also include other materials related to
the development of Commission views,
such as other documents or related
actions.
(c) Public comments should focus on
the specific relevant proposals posted
by the Commission and the general
principles that should guide the
development of Commission views as
well as any other materials posted in the
applicable docket pursuant to paragraph
(b) of this section.
(d) The Commission shall arrange for
publication in the Federal Register of
the notice establishing each docket
authorized under this part.
§ 3017.4
Comment deadline(s).
(a) The Commission shall establish a
deadline for comments upon
establishment of the docket that is
consistent with timely submission of
Commission views to the Secretary of
State. The Commission may establish
other deadlines for comments as
appropriate.
(b) The Commission may suspend or
forego solicitation of comments if it
determines that such solicitation is not
consistent with timely submission of
Commission views to the Secretary of
State.
§ 3017.5
1 See
Purpose.
The rules in this part are intended to
facilitate public participation in, and
promote the transparency of, the
development of Commission views.
Commission views.
(a) The Commission will review
timely filed comments responding to a
Commission solicitation pursuant to
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§ 3017.3(a) prior to submitting its views
to the Secretary of State.
(b) After Commission views are
developed, the Commission shall post
Commission views in the applicable
docket established pursuant to
§ 3017.3(a) and submit Commission
views to the Secretary of State pursuant
to 39 U.S.C. 407(c)(1).
By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2019–27604 Filed 12–20–19; 8:45 am]
BILLING CODE 7710–FW–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 320
[EPA–HQ–OLEM–2019–0087; FRL–10003–
10–OLEM]
RIN 2050–AH06
Financial Responsibility Requirements
Under CERCLA Section 108(b) for
Facilities in the Petroleum and Coal
Products Manufacturing Industry
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
EPA (or the Agency) is
proposing to not impose financial
responsibility requirements for facilities
in the Petroleum and Coal Products
Manufacturing industry under Section
108(b) of the Comprehensive
Environmental Response,
Compensation, and Liability Act
(CERCLA). Section 108(b) addresses the
promulgation of regulations that require
classes of facilities to establish and
maintain evidence of financial
responsibility consistent with the degree
and duration of risk associated with the
production, transportation, treatment,
storage, or disposal of hazardous
substances.
SUMMARY:
Comments must be received on
or before February 21, 2020.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–HQ–
OLEM–2019–0087, at https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
EPA may publish any comment received
to its public docket. Do not submit
electronically any information you
consider to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Multimedia submissions (audio, video,
etc.) must be accompanied by a written
DATES:
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comment. The written comment is
considered the official comment and
should include discussion of all points
you wish to make. EPA will generally
not consider comments or comment
contents located outside of the primary
submission (i.e. on the Web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www2.epa.gov/dockets/
commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: For
more information on this document,
contact Charlotte Mooney, U.S.
Environmental Protection Agency,
Office of Resource Conservation and
Recovery, Mail Code 5303P, 1200
Pennsylvania Ave. NW, Washington, DC
20460; telephone (703) 308–7025 or
(email) mooney.charlotte@epa.gov.
SUPPLEMENTARY INFORMATION:
How can I get copies of this document
and other related information?
This Federal Register proposed rule
and supporting documentation are
available in a docket EPA has
established for this action under Docket
ID No. EPA–HQ–OLEM–2019–0087. All
documents in the docket are listed in
the https://www.regulations.gov index.
Although listed in the index, some
information is not publicly available,
e.g., Confidential Business Information
(CBI) or other information whose
disclosure is restricted by statute.
Certain other material, such as
copyrighted material, will be publicly
available only in hard copy. Publicly
available docket materials are available
either electronically at https://
www.regulations.gov or in hard copy at
EPA/DC, WJC West, Room 3334, 1301
Constitution Ave. NW, Washington, DC
20460. This Docket Facility is open from
8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The
Docket Facility telephone number is
(202) 566–0276. The Public Reading
Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding
legal holidays. The telephone number
for the Public Reading Room is (202)
566–1744.
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Table of Contents
I. Executive Summary
A. Overview
B. Purpose of This Action
C. Summary of the Major Provisions of the
Regulatory Action
D. Costs and Benefits of the Regulatory
Action
II. Authority
III. Background Information
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A. Overview of Section 108(b) and Other
CERCLA Provisions
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of
Facilities for Development of CERCLA
Section 108(b) Financial Responsibility
Requirements
2. Additional Classes 2010 Advance Notice
of Proposed Rulemaking
3. 2014 Petition for Writ of Mandamus
4. Additional Classes 2017 Notice of Intent
To Proceed With Rulemakings
IV. Statutory Interpretation
V. Approach To Developing This Proposed
Rule
VI. Petroleum and Coal Products
Manufacturing Industry Overview
A. Identification of Petroleum and Coal
Products Manufacturing Industry
B. Current Industry Practices
C. Industry Economic Profile
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
B. Role of Federal and State Programs and
Voluntary Protective Industry Practices
at Facilities in the Petroleum and Coal
Products Manufacturing Industry
C. Existing State and Federal Financial
Responsibility Programs
D. Compliance and Enforcement History
VIII. Decision to Not Propose Requirements
A. Solicitation of Public Comment on This
Proposal
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
B. Executive Order 13771: Reducing
Regulation and Controlling Regulatory
Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act
(UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
H. Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
I. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
J. National Technology Transfer and
Advancement Act
K. Executive Order 12898: Federal Actions
To Address Environmental Justice in
Minority Populations and Low-Income
Populations
I. Executive Summary
A. Overview
Section 108(b) of the Comprehensive
Environmental Response,
Compensation, and Liability Act
(CERCLA) directs EPA to develop
regulations that require classes of
facilities to establish and maintain
evidence of financial responsibility
consistent with the degree and duration
of risk associated with the production,
transportation, treatment, storage, or
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disposal of hazardous substances. The
statute further requires that the level of
financial responsibility be established to
protect against the level of risk the
President, in his discretion, believes is
appropriate, based on factors including
the payment experience of the
Hazardous Substance Superfund (Fund).
The President’s authority under this
section for non-transportation-related
facilities has been delegated to the EPA
Administrator.
This proposal is based on EPA’s
interpretation of the statute and analysis
of its record developed for this
rulemaking.1 EPA has analyzed the need
for financial responsibility based on risk
of taxpayer funded cleanups at facilities
in the Petroleum and Coal Products
Manufacturing Industry operating under
modern management practices and
modern environmental regulations, i.e.,
the type of facilities to which financial
responsibility regulations would apply.
That risk is identified by examining
the management of hazardous
substances at such facilities, as well as
by examining Federal and state
regulatory controls on that management
and Federal and state financial
responsibility requirements.
Based on that examination, EPA is
proposing that, in the context of
CERCLA Section 108(b), the degree and
duration of risk associated with the
modern production, transportation,
treatment, storage or disposal of
hazardous substances by the Petroleum
and Coal Products Manufacturing
Industry does not present a level of risk
of taxpayer funded response actions that
warrant imposition of financial
responsibility requirements for this
sector.
In August 2014, the Idaho
Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin
Resource Watch, and Communities for a
Better Environment filed a lawsuit in
the U.S. Court of Appeals for the District
of Columbia Circuit, seeking a writ of
mandamus requiring issuance of
CERCLA Section 108(b) financial
responsibility rules for the hardrock
mining industry, and for the three
additional industries identified by EPA
in the 2010 Advance Notice of Proposed
Rulemaking (ANPRM),2 that is,
Chemical Manufacturing; Petroleum and
Coal Products Manufacturing; and
Electric Power Generation,
Transmission, and Distribution.
Following oral arguments, EPA and the
1 EPA’s interpretation of the statute was upheld
by the D.C. Circuit in Idaho Conservation League
v. Wheeler, No. 18–1141, slip op. at 9–12 (D.C. Cir.
July 19, 2019).
2 75 FR 816 (Jan. 6, 2010).
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petitioners submitted a Joint Motion for
an Order on Consent, filed on August
31, 2015, which included a schedule for
further administrative proceedings
under CERCLA Section 108(b). The
court order granting the motion was
issued on January 29, 2016. A copy of
the order can be found in the docket for
this rulemaking.
In addition to requiring EPA to
publish a proposed rule on hardrock
mining financial requirements by
December 1, 2016, the January 2016
Order required EPA to sign for
publication in the Federal Register a
determination whether EPA will issue a
notice of proposed rulemaking on
financial assurance requirements under
Section 108(b) in the (a) chemical
manufacturing industry; (b) petroleum
and coal products manufacturing
industry; and (c) electric power
generation, transmission, and
distribution industry by December 1,
2016. EPA signed the required
determination on December 1, 2016; the
notice was published on January 11,
2017,3 and announced EPA’s intent to
proceed with rulemakings for all three
of the classes.
B. Purpose of This Action
The purpose of today’s action is to
propose that financial responsibility
requirements under CERCLA Section
108(b) at facilities in the Petroleum and
Coal Products Manufacturing industry
are not necessary, and to solicit
comments on this proposal. EPA has
reached this conclusion based on the
analyses described in Parts VI and VII
of this proposal. The evidence provided
in these analyses contributed to EPA’s
proposed finding that the degree and
duration of risk posed by the Petroleum
and Coal Products Manufacturing
industry does not warrant financial
responsibility requirements under
CERCLA Section 108(b).
The analysis and proposed finding in
this proposal are not applicable to and
do not affect, limit, or restrict EPA’s
authority (1) to take a response action or
enforcement action under CERCLA with
respect to any facility in the Petroleum
and Coal Products Manufacturing
industry, including any currently
operating facilities or those described in
this proposal and in the background
documents for this proposal, and (2) to
include requirements for financial
responsibility as part of such response
action. The set of facts in the
rulemaking record related to the
individual facilities discussed in this
proposed rulemaking support the
Agency’s proposal not to issue financial
3 82
FR 3512 (Jan. 11, 2017).
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responsibility requirements under
Section 108(b) for this class. At the same
time, a different set of facts could
demonstrate a need for a CERCLA
response action at an individual site.
This proposed rulemaking also does not
affect the Agency’s authority under
other authorities that may apply to
individual facilities, such as the Clean
Air Act (CAA), the Clean Water Act
(CWA), the Resource Conservation and
Recovery Act (RCRA), and the Toxic
Substances Control Act (TSCA).
C. Summary of the Major Provisions of
the Regulatory Action
EPA is proposing to not require
evidence of financial responsibility
under CERCLA Section 108(b) at
facilities in the Petroleum and Coal
Products Manufacturing industry. Thus,
there are no proposed regulatory
provisions associated with this action.
D. Costs and Benefits of the Regulatory
Action
EPA is proposing to not require
evidence of financial responsibility
under CERCLA Section 108(b) at
facilities in the Petroleum and Coal
Products Manufacturing industry. EPA,
therefore, has not conducted a
Regulatory Impact Analysis for this
action.
II. Authority
This proposed rule is issued under
the authority of Sections 101, 104, 108
and 115 of the Comprehensive
Environmental Response,
Compensation, and Liability Act of
1980, as amended, 42 U.S.C. 9601, 9604,
9608 and 9615, and Executive Order
12580 (52 FR 2923, January 29, 1987).
III. Background Information
A. Overview of Section 108(b) and Other
CERCLA Provisions
CERCLA, as amended by the
Superfund Amendments and
Reauthorization Act of 1986 (SARA),
establishes a comprehensive
environmental response and cleanup
program. Generally, CERCLA authorizes
EPA 4 to undertake removal or remedial
actions in response to any release or
threatened release into the environment
of ‘‘hazardous substances’’ or, in some
circumstances, any other ‘‘pollutant or
contaminant.’’ As defined in CERCLA
Section 101, removal actions include
4 Although Congress conferred the authority for
administering CERCLA on the President, most of
that authority has since been delegated to EPA. See
Exec. Order No. 12580, 52 FR 2923 (Jan. 23, 1987).
The executive order also delegates to other Federal
agencies specified CERCLA response authorities at
certain facilities under those agencies’ ‘‘jurisdiction,
custody or control.’’
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actions to ‘‘prevent, minimize, or
mitigate damage to the public health or
welfare or to the environment,’’ and
remedial actions are ‘‘actions consistent
with [a] permanent remedy[.]’’ Remedial
and removal actions are jointly referred
to as ‘‘response actions.’’ CERCLA
Section 111 authorizes the use of the
Hazardous Substance Superfund
established under title 26, United States
Code, to finance response actions
undertaken by EPA. In addition,
CERCLA Section 106 gives EPA 5
authority to compel action by liable
parties in response to a release or
threatened release of a hazardous
substance that may pose an ‘‘imminent
and substantial endangerment’’ to
public health or welfare or the
environment.
CERCLA Section 107 imposes liability
for response costs on a variety of parties,
including certain past owners and
operators, current owners and operators,
and certain generators, arrangers, and
transporters of hazardous substances.
Such parties are liable for certain costs
and damages, including all costs of
removal or remedial action incurred by
the Federal Government, so long as the
costs incurred are ‘‘not inconsistent
with the national contingency plan’’
(the National Oil and Hazardous
Substances Pollution Contingency Plan
or NCP).6 Section 107 also imposes
liability for natural resource damages
and health assessment costs.7
Section 108(b) establishes authority to
require owners and operators of classes
of facilities to establish and maintain
evidence of financial responsibility.
Section 108(b)(1) directs EPA to develop
regulations requiring owners and
operators of facilities to establish
evidence of financial responsibility
‘‘consistent with the degree and
duration of risk associated with the
production, transportation, treatment,
storage, or disposal of hazardous
substances.’’ In turn, Section 108(b)(2)
directs that the level of financial
responsibility shall be initially
established, and, when necessary,
adjusted, to protect against the level of
risk that EPA in its discretion believes
is appropriate based on the payment
experience of the Fund, commercial
insurers, court settlements and
judgments, and voluntary claims
satisfaction. Section 108(b)(2) does not,
however, preclude EPA from
considering other factors in addition to
those specifically listed. The statute
5 CERCLA Sections 106 authority is also
delegated to other Federal agencies in certain
circumstances. See Exec. Order No. 13016, 61 FR
45871 (Aug. 28, 1996).
6 CERCLA Section 107(a)(4)(A).
7 CERCLA Section 107(a)(4)(C)–(D).
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prohibited promulgation of such
regulations before December 1985.
In addition, Section 108(b)(1)
provides for publication within three
years of the date of enactment of
CERCLA of a ‘‘priority notice’’
identifying the classes of facilities for
which EPA would first develop
financial responsibility requirements. It
also directs that priority in the
development of requirements shall be
accorded to those classes of facilities,
owners, and operators that present the
highest level of risk of injury.
B. History of Section 108(b)
Rulemakings
1. 2009 Identification of Priority Classes
of Facilities for Development of
CERCLA Section 108(b) Financial
Responsibility Requirements
On March 11, 2008, Sierra Club, Great
Basin Resource Watch, Amigos Bravos,
and Idaho Conservation League filed
suit in the U.S. District Court for the
Northern District of California against
then EPA Administrator Stephen
Johnson and then Secretary of the U.S.
Department of Transportation Mary E.
Peters. Sierra Club, et al. v. Johnson, No.
08–01409 (N. D. Cal.). On February 25,
2009, that court ordered EPA to publish
the Priority Notice required by CERCLA
Section 108(b)(1) later that year. The
2009 Priority Notice and supporting
documentation presented the Agency’s
conclusion that hardrock mining
facilities would be the first class of
facilities for which EPA would issue
CERCLA Section 108(b) requirements.8
Additionally, the 2009 Priority Notice
stated EPA’s view that classes of
facilities outside of the hardrock mining
industry may warrant the development
of financial responsibility
requirements.9 The Agency committed
to gather and analyze data on additional
classes of facilities and to consider them
for possible regulation. The court later
dismissed the remaining claims.
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2. Additional Classes 2010 Advance
Notice of Proposed Rulemaking
On January 6, 2010, EPA published an
Advance Notice of Proposed
Rulemaking (ANPRM) 10 in which the
Agency identified three additional
industrial sectors for the development,
as necessary, of proposed Section 108(b)
regulation. To develop the list of
additional classes for the 2010 ANPRM,
EPA used information from the CERCLA
National Priorities List (NPL) and
analyzed data from the RCRA Biennial
8 74
FR 37214 (July 28, 2009).
at 37218.
10 75 FR 816 (Jan. 6, 2010).
Report (BR) and the Toxics Release
Inventory (TRI).
EPA specifically requested public
comment in the 2010 ANPRM on
whether to propose a regulation under
CERCLA Section 108(b) for each of the
three industries, or any class or classes
within those industries, including
information demonstrating why such
financial responsibility requirements
would or would not be appropriate for
those particular classes. In addition, the
Agency requested information related to
the industry categories discussed in the
ANPRM, including data on facility
operations, information on past and
expected future environmental response
actions, use of financial responsibility
mechanisms by the industry categories,
existing financial responsibility
requirements, and other information the
Agency might consider in setting
financial responsibility levels. Finally,
EPA requested information from the
insurance and financial sectors related
to instrument availability and
implementation and to potential
instrument conditions.11 Comments
received on the ANPRM are
summarized in the Additional Classes
2017 Notice of Intent to Proceed with
Rulemakings, section III.B.4 below.
3. 2014 Petition for Writ of Mandamus
In August 2014, the Idaho
Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin
Resource Watch, and Communities for a
Better Environment filed a new lawsuit
in the U.S. Court of Appeals for the
District of Columbia Circuit, seeking a
writ of mandamus requiring issuance of
CERCLA Section 108(b) financial
assurance rules for the hardrock mining
industry and for three other industries:
Chemical manufacturing; petroleum and
coal products manufacturing; and
electric power generation, transmission,
and distribution. Thirteen companies
and organizations representing business
interests in the hardrock mining and
other sectors sought to intervene in the
case.
Following oral argument, the court
issued an Order in May 2015 requiring
the parties to submit, among other
things, supplemental submissions
addressing a schedule for further
administrative proceedings under
CERCLA Section 108(b). Petitioners and
EPA requested an Order from the court
with a schedule calling for the Agency
to sign a proposed rule for the hardrock
mining industry by December 1, 2016,
and a final rule by December 1, 2017.
The joint motion also included a
requested schedule for the additional
9 Id.
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FR 816, 830–831 (Jan. 6, 2010).
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industry classes, which called for EPA
to sign by December 1, 2016, a
determination on whether EPA would
issue a notice of proposed rulemaking
for classes of facilities in any or all of
the other industries, and a schedule for
proposed and final rules for the
additional industry classes as follows:
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the first additional industry by
July 2, 2019, and sign for publication in the
Federal Register a notice of its final action
by December 2, 2020.
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the second additional industry
by December 4, 2019, and sign for
publication in the Federal Register a notice
of its final action by December 1, 2021.
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the third additional industry
by December 1, 2022, and sign for
publication in the Federal Register a notice
of its final action by December 4, 2024.12
While the joint motion identified the
three additional industries as the
Chemical Manufacturing industry, the
Petroleum and Coal Products
Manufacturing industry, and the
Electric Power Generation,
Transmission and Distribution industry,
and set a rulemaking schedule, the
motion did not indicate which industry
would be the first, second or third. The
Joint Motion specified that it did not
alter the Agency’s discretion as
provided by CERCLA and
administrative law.13
On January 29, 2016, the court
granted the joint motion and issued an
order that mirrored the submitted
schedule in substance. The order did
not mandate any specific outcome of the
rulemakings.14 The order can be found
in the docket for this rulemaking. The
signing of this proposed rule by
December 4, 2019, will satisfy one
component of the order.
4. Additional Classes 2017 Notice of
Intent To Proceed With Rulemakings
Consistent with the January 2016
court order, EPA signed on December 1,
2016, a determination regarding
12 In Re: Idaho Conservation League, No. 14–1149
(D.C. Cir. Jan. 29, 2016) (order granting joint
motion).
13 See Joint Motion at 6 (‘‘Nothing in this Joint
Motion should be construed to limit or modify the
discretion accorded EPA by CERCLA or the general
principles of administrative law’’).
14 In granting the Joint Motion, the court
expressly stated that its Order ‘‘merely requires that
EPA conduct a rulemaking and then decide whether
to promulgate a new rule—the content of which is
not in any way dictated by the [Order].’’ In re Idaho
Conservation League, at 17 (quoting Defenders of
Wildlife v. Perciasepe, 714 F.3d 1317, 1324 (D.C.
Cir. 2013).
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rulemakings for the additional classes—
a Notice of Intent to Proceed with
Rulemakings for all three of the classes.
The notice was published in the Federal
Register on January 11, 2017.15
The notice formally announced EPA’s
intention to move forward with the
regulatory process and to publish a
notice of proposed rulemaking for
classes of facilities within the three
industries identified in the 2010
ANPRM. The announcement in the
notice was not a determination that
requirements were necessary for any or
all of the classes of facilities within the
three industries, or that EPA would
propose such requirements. In addition,
the notice gave an overview of some of
the comments received on the 2010
ANPRM and initial responses to those
comments. The comments on the
ANPRM which specifically addressed
the need for CERCLA Section 108(b)
regulation for the three additional
classes fell into four categories: (1)
Other laws with which the industry
complies that obviate the need for
CERCLA Section 108(b) regulation; (2)
the sources of data that EPA used to
select the industries; (3) past versus
current practices within each industry;
and (4) the overall need for financial
responsibility for each industry. In
discussing the ANPRM comments in the
2017 notice, the Agency stated its intent
to use other, more industry-specific and
more current sources of data to identify
risk; to consider site factors that reduce
risks, including those that result from
compliance with other regulatory
requirements; and to develop a
regulatory proposal for each rulemaking.
At the time of the 2017 notice, EPA
had not identified sufficient evidence to
determine that the rulemaking process
was not warranted, nor had EPA
identified sufficient evidence to
establish CERCLA Section 108(b)
requirements. The notice described a
process to gather and analyze additional
information to support the Agency’s
ultimate decision, including further
evaluation of the classes of facilities
within the three industry sectors. The
notice stated that EPA would decide
whether proposing requirements was
necessary and, accordingly, that EPA
would propose appropriate
requirements or would propose not to
impose requirements.
5. CERCLA Section 108(b) Proposal for
Facilities in the Electric Power
Generation, Transmission, and
Distribution Industry
On July 29, 2019, EPA published a
notice of proposed rulemaking on the
first of the three additional industries.
In that notice, the Agency proposed to
not impose financial responsibility
requirements for the Electric Power
Generation, Transmission, and
Distribution industry and described the
analyses and results that were used to
reach that decision. The court’s January
2016 order requires that a final action
on the first additional industry be
signed by December 2, 2020.16
IV. Statutory Interpretation
CERCLA Section 108(b) provides
general instructions on how to
determine what financial responsibility
requirements to impose for a particular
class of facility. Section 108(b)(1) directs
EPA to develop regulations requiring
owners and operators of facilities to
establish evidence of financial
responsibility ‘‘consistent with the
degree and duration of risk associated
with the production, transportation,
treatment, storage, or disposal of
hazardous substances.’’ Section
108(b)(2) directs that the ‘‘level of
financial responsibility shall be initially
established and, when necessary,
adjusted to protect against the level of
risk’’ that EPA ‘‘believes is appropriate
based on the payment experience of the
Fund, commercial insurers, court
settlements and judgments, and
voluntary claims satisfaction.’’ EPA
interprets the risk to be addressed by
financial assurance under Section
108(b) to be the risk of the need for
taxpayer financed response actions.
Read together, the statutory language on
determining the degree and duration of
risk and on setting the level of financial
responsibility confers a significant
amount of discretion on EPA.
Section 108(b)(1) directs EPA to
evaluate risk from a selected class of
facilities, but it does not suggest that a
precise calculation of risk is either
necessary or feasible. Although the cost
of response associated with a particular
site can be ascertained only once a
response action is required, any
financial responsibility requirements
imposed under Section 108(b) would be
imposed before any such response
action was identified. The statute thus
necessarily confers on EPA wide
latitude to determine, in a Section
108(b) rulemaking proceeding, what
degree and duration of risk are
presented by the identified class.
Section 108(b)(2) in turn directs that
EPA establish the level of financial
responsibility that EPA in its discretion
believes is appropriate to protect against
the risk. This statutory direction does
not specify a methodology for the
evaluation. Rather, this decision is
committed to the discretion of the EPA
Administrator. While the statute
provides a list of information sources on
which EPA is to base its decision—the
payment experience of the Superfund,
commercial insurers, court settlements
and judgments, and voluntary claims
satisfaction—the statute does not
indicate that this list of factors is
exclusive, nor does it specify how the
information from these sources is to be
used, such as by indicating how these
categories are to be weighted relative to
one another.
EPA believes that Sections 108(b)(1)
and (b)(2) are sufficiently interrelated
that it is appropriate to evaluate the
degree and duration of risk under
paragraph (b)(1) by considering the
factors enumerated in paragraph (b)(2).
EPA therefore concludes that Congress
intended the risk associated with a
particular class of facilities to mean the
risk of future Fund-financed cleanup
actions in that industry. This reading is
supported by the structure of the statute,
as Section 108(b) appears between two
provisions related to cost recovery.
Section 108(a), concerning financial
assurance requirements for certain
vessels, refers specifically to cleanup
costs. And Section 108(c), concerning
recovery of costs from guarantors who
provide the financial responsibility
instruments, refers specifically to
liability for cleanup costs. EPA thus
reads ‘‘risk’’ in Section 108(b) consistent
with its meaning in Sections 108(a) and
(c); that is, the risk of Fund-financed
cleanup. EPA adopted this
interpretation in assessing the need for
financial responsibility requirements
under CERCLA Section 108(b) for
facilities in the first class of facilities it
evaluated: The hardrock mining
industry.17 In its opinion deciding the
challenge to EPA’s Final Action for the
hardrock mining industry, the U.S.
Court of Appeals for the District of
Columbia Circuit held that EPA’s
interpretation—that the provisions of
Section 108(b) ‘‘relate only to ensuring
against financial risks associated with
cleanup costs’’—is reasonable and
entitled to deference.18
For the Petroleum and Coal Products
Manufacturing industry, EPA has
investigated the payment history of the
Fund, and enforcement settlements and
judgments, to evaluate, in the context of
this CERCLA Section 108(b) rulemaking,
the risk of a Fund-financed response
action at facilities that would be subject
to CERCLA financial responsibility
17 83
FR 7556, 7561–62 (Feb. 21, 2018).
Conservation League v. Wheeler, No. 18–
1141, slip op. at 12 (DC Cir. July 19, 2019).
18 Idaho
15 82
FR 3512 (Jan. 11, 2017).
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requirements. The statute also
authorizes EPA to consider the
existence of Federal and state regulatory
requirements, including any financial
responsibility requirements. Section
108(b)(1) directs EPA to promulgate
financial responsibility requirements
‘‘in addition to those under subtitle C of
the Solid Waste Disposal Act and other
Federal law.’’ According to the 1980
Senate Report on legislation that was
later enacted as CERCLA, Congress
considered it appropriate for EPA to
examine those additional requirements
when evaluating the degree and
duration of risk under what was later
enacted as CERCLA Section 108(b):
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‘‘The bill requires also that facilities
maintain evidence of financial responsibility
consistent with the degree and duration of
risks associated with the production,
transportation, treatment, storage, and
disposal of hazardous substances. These
requirements are in addition to the financial
responsibility requirements promulgated
under the authority of Section 3004(6) of the
Solid Waste Disposal Act. It is not the
intention of the Committee that operators of
facilities covered by Section 3004(6) of that
Act be subject to two financial responsibility
requirements for the same dangers.19
While the Senate Report mentions
RCRA Section 3004(6) specifically, it is
consistent with congressional intent for
EPA to consider other potentially
duplicative Federal financial
responsibility requirements when
examining the ‘‘degree and duration of
risk’’ in the context of CERCLA Section
108(b) to determine whether and what
financial responsibility requirements are
appropriate. It is also consistent with
congressional intent for EPA to consider
state laws before imposing additional
Federal financial responsibility
requirements.
Consideration of state laws before
developing financial responsibility
regulations is consistent with CERCLA
Section 114(d), which prevents states
from imposing financial responsibility
requirements for liability for releases of
the same hazardous substances after a
facility is regulated under Section 108 of
CERCLA. Just as Congress intended to
prevent states from imposing
duplicative financial assurance
requirements after EPA had acted to
impose such requirements under
Section 108, it is reasonable to also
conclude that Congress did not mean for
EPA to disrupt existing state programs
that are successfully regulating
industrial operations to minimize risk,
including the risk of taxpayer liability
for response actions under CERCLA,
and that specifically include
19 S.
Rept. 96–848 (2d Sess, 96th Cong.), at 92.
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appropriate financial assurance
requirements under state law. Reviews
of both state programs and other Federal
programs help to identify whether and
at what level there is current risk that
is appropriate to address under CERCLA
Section 108.
EPA also believes that, when
evaluating whether and at what level it
is appropriate to require evidence of
financial responsibility, EPA should
examine information on Petroleum and
Coal Products Manufacturing facilities
operating under modern conditions. In
other words, EPA should assess the
types of facilities to which any new
financial responsibility regulations
would apply. Financial responsibility
requirements under Section 108(b)
would not apply to legacy operations
that are no longer operating. Rather, any
requirements would apply to facilities
that follow current industry practices
and are subject to the modern regulatory
framework (i.e., the regulations
currently in place that apply to this
industry). These modern conditions
include state and Federal regulatory
requirements and financial
responsibility requirements that
currently apply to operating facilities.
This reading of Section 108(b) is
consistent with statements in the
legislative history of the statute. The
1980 Senate Report states that the
legislative language that became Section
108(b) ‘‘requires those engaged in
businesses involving hazardous
substances to maintain evidence of
financial responsibility commensurate
with the risk which they present.’’ 20
This approach is also consistent with
the analysis that EPA undertook in
developing its Final Action on Financial
Responsibility Requirements Under
CERCLA Section 108(b) for Classes of
Facilities in the Hardrock Mining
Industry.21 EPA’s approach was recently
upheld by the U.S. Court of Appeals for
the District of Columbia Circuit.22
This statutory interpretation is
reflected in today’s proposal. Any
financial responsibility requirements
imposed under Section 108(b) would
apply to currently operating facilities.
EPA thus sought to examine the extent
to which hazardous substance
management at currently operating
Petroleum and Coal Products
Manufacturing facilities as a class
continues to present risk. Moreover, the
statutory direction to identify
requirements consistent with identified
risks guides EPA’s interpretation that
20 S.
Rept. 96–848 (2d Sess, 96th Cong.), at 92.
FR 7556 (Feb. 21, 2018).
22 Idaho Conservation League v. Wheeler, No. 18–
1141 (D.C. Cir. July 19, 2019).
21 83
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imposition of financial responsibility
requirements under Section 108(b)
would not be necessary for currently
operating facilities that present minimal
current risk of a Fund-financed response
action. The interpretation in this
proposal does not extend to any sitespecific determinations of risk made in
the context of individual CERCLA site
responses. Those decisions will
continue to be made in accordance with
preexisting procedures.
EPA thus examined records of
releases of hazardous substances from
facilities operating under a current
regulatory framework and data on the
actions taken and expenditures incurred
in response to such releases. The data
collected do not reflect historical
practices, many of which would be
illegal under current environmental
laws and regulations. Instead, EPA has
considered current Federal and state
regulation of hazardous substance
production, transportation, treatment,
storage, or disposal applicable to
facilities in the Petroleum and Coal
Products Manufacturing industry.
V. Approach To Developing This
Proposed Rule
Based on the statutory interpretation
described above, EPA developed an
analytical approach to determine
whether the current risk under the
modern regulatory framework within
the Petroleum and Coal Products
Manufacturing industry rises to the
level that warrants imposition of
financial responsibility requirements
under CERCLA Section 108(b).
Specifically, EPA designed the
analytical approach to determine the
need for financial responsibility for this
industry based on the degree and
duration of risk of a Fund-financed
response action associated with the
industry’s production, transportation,
treatment, storage, or disposal of
hazardous substances.
The approach, described in detail
below, looks at risks by examining
records of releases of hazardous
substances from facilities in the
industry in combination with the
payment history of the Fund and
enforcement settlements and judgments.
To enable EPA to base its decision on
risk posed by facilities operating under
modern conditions, i.e., the types of
facilities to which financial
responsibility requirements would
apply, EPA developed an approach to
identify and consider relevant state and
Federal regulatory requirements and
financial responsibility requirements
that currently apply to operating
facilities, as well as voluntary protective
practices.
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EPA sought to determine the level of
risk of a Fund-financed response action
at current Petroleum and Coal Products
Manufacturing operations. Relevant to
this decision are requirements of
existing regulatory programs and
voluntary practices, including existing
financial responsibility requirements,
which can reduce costs to the taxpayer;
EPA’s experience with clean-ups in the
Petroleum and Coal Products
Manufacturing industry; and
enforcement actions, which may reduce
the need for Federally-financed
response action at facilities in the
Petroleum and Coal Products
Manufacturing industry.
As part of scoping the Petroleum and
Coal Products Manufacturing industry
for this proposal, EPA sought to
understand general characteristics of the
industry that may be relevant to
financial responsibility under Section
108(b). To do this, EPA compiled
industry features, including the types of
activities undertaken and wastes
handled or produced. Additionally, EPA
looked at the financial condition of the
industry to assess the ability of facilities
in this class to pay for any
environmental obligations they may
incur. Discussion of these aspects of the
industry is included in section VI of this
proposal.
Section VII.A describes EPA’s
evaluation of cleanup cases at facilities
in the Petroleum and Coal Products
Manufacturing industry. So-called
‘‘cleanup cases’’ are sites in the
Petroleum and Coal Products
Manufacturing industry where releases
and cleanup actions occurred. To
perform this evaluation, EPA developed
an analytic approach that considered
cleanup cases to identify risk at
currently operating facilities and where
taxpayer funds were expended for
response action. EPA first examined
each site to determine the nature and
timing of release. EPA used this
information to determine if releases
occurred under current regulations. As
an initial screen, releases that occurred
prior to 1980 were deemed to be legacy
releases that occurred before the advent
of the modern environmental regulatory
framework and were therefore screened
out of our analysis. Once EPA identified
those sites with more recent releases
occurring under a modern regulatory
framework, EPA then focused on those
response actions that were paid for by
the taxpayer by looking at those sites
with Fund-financed cleanup activity.
As described in section VII.B, to
understand the modern regulatory
framework applicable to currently
operating facilities within the Petroleum
and Coal Products Manufacturing
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industry, EPA compiled applicable
Federal and state regulations.
Specifically, EPA looked to regulations
that address the types of releases
identified in the cleanup cases. This
review also considered industry
voluntary programs that could reduce
risk of releases. EPA also identified
financial responsibility regulations that
apply to facilities in the Petroleum and
Coal Products Manufacturing industry
in section VII.C, and compliance and
enforcement history for the relevant
regulations in section VII.D.
EPA considered payments from
commercial insurers as well, but
determined that it was not necessary to
conduct a detailed analysis of this
potential information source in light of
the analyses of cleanup cases and
enforcement data. The cleanup cases
and enforcement data, in addition to
addressing the payment experience of
the Fund, court settlements and
judgments, and voluntary claims
satisfaction, also encompass amounts
from commercial insurance payments.
For example, at one of the Petroleum
and Coal Products Manufacturing sites
identified and reviewed, EPA recovered
funds from the potentially responsible
party’s (PRP’s) commercial insurers in
two separate settlements. Furthermore,
payments from commercial insurers
may have helped finance the work
conducted by PRPs in the cleanup cases
identified or may have been included in
settlements, judgments, or enforcement
cases identified by EPA. However, in
the event there were significant
payments from commercial insurers
associated with facilities in the
Petroleum and Coal Products
Manufacturing industry that were not
already indirectly captured, this
information would neither indicate
greater risk to the Fund nor suggest a
need for financial responsibility
requirements under CERCLA Section
108(b).
In considering how to structure its
analysis and what data sources to
examine, EPA reviewed prior analysis
done for selection of industry classes in
the 2010 ANPRM and public comments
responding to EPA’s approach. In the
public comment period for the ANPRM,
EPA received a total of 67 comments
from 30 commenters on the Chemical
Manufacturing industry, Petroleum and
Coal Products Manufacturing industry,
and the Electric Power Generation,
Transmission, and Distribution
industry. In addition, EPA received five
comments to the hardrock mining
proposed rule that were related to the
additional classes of facilities.
EPA received comments from the
American Petroleum Institute, the
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National Petrochemical & Refiners
Association, and the American Coke
and Coal Chemicals Institute, as well as
individual refineries. Commenters
indicated that EPA should concentrate
on current practices and not legacy
contamination. Commenters also said
that EPA should not impose financial
responsibility requirements on facilities
that are already subject to other Federal
laws. One commenter stated that EPA
should not include waste oil recycling
sites, and that oil refineries and coke
production facilities should be analyzed
independently from each other. Lastly,
many commenters believe that EPA
placed too much emphasis on TRI data
and RCRA BR data and expressed their
opinions that these data sources are not
designed or intended to provide riskbased information.
In its 2017 Notice of Intent to Proceed
with Rulemakings,23 EPA acknowledged
limitations on information that can be
gained from TRI and BR data and
announced its intention to use industryspecific and current sources of data to
identify risk for the purposes of the
rulemakings. EPA also analyzed those
limitations in the Final Action for the
hardrock mining industry.24
Accordingly, in the analysis conducted
to assess risk in the Petroleum and Coal
Products Manufacturing industry for
this action, EPA chose not to rely on TRI
and BR data. While, at the time of the
2010 ANPRM, the Agency found those
data sources appropriate for identifying
classes of facilities to examine further,
the Agency does not find the data
sources valuable for assessing current
risk of a Fund-financed response action
in the industry.
VI. Petroleum and Coal Products
Manufacturing Industry Overview
A. Identification of Petroleum and Coal
Products Manufacturing Industry
For this proposal and the associated
analyses, EPA reviewed facilities
classified under the North American
Industry Classification System (NAICS)
code 324. The most recent available
census data lists the size of the industry
at 2,167 establishments nationally.25
The Petroleum and Coal Products
Manufacturing industry is based on the
transformation of crude petroleum and
coal into usable products. The dominant
process, as measured by the value of
shipments, is petroleum refining, which
involves the separation of crude
petroleum into component products
through such techniques as cracking
23 82
FR 3512 (Jan. 11, 2017).
FR 7570 (Feb. 21, 2018).
25 2016 Economic Census of the United States,
NAICS 324.
24 83
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and distillation. As of 2018, there were
135 operating petroleum refineries in
the U.S. In 2000, there were 155,
indicating that at least 20 refineries have
closed since the year 2000.26 In
addition, this industry includes
establishments that primarily further
process refined petroleum and coal
products to produce products, such as
asphalt, asphalt roofing materials, coke
from coal, and petroleum lubricating
oils.
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B. Current Industry Practices
Operational and decommissioning
practices in industrial sectors and their
associated firms can ultimately affect
the ability of individual firms to
responsibly minimize their impact on
human health and the environment. To
consider the potential for releases as
part of its decision making, EPA
prepared a high-level review of industry
practices and the environmental profile
of the Petroleum and Coal Product
Manufacturing industry, which includes
a summary of relevant operational and
decommissioning materials and wastes
in a background document, which is
available in the docket for this
rulemaking.27
Potentially hazardous materials are
frequently used in this industry. These
materials can include sandblast media,
fuels, paints, spent vehicle and
equipment fluids (e.g., lubricating oils,
hydraulic fluids, battery electrolytes,
glycol coolants), among others. Known
hazardous materials may include, but
are not limited to, asbestos or mercury
containing materials, compressed gases,
dielectric fluids, boiler bottom ash, and
oils. Process fluids can be either
hazardous or non-hazardous, and can
include oily water, spent solvents,
chemical cleaning rinses, cooling water,
wash and makeup water, sump and
floor discharges, oily water separator
fluids, boiler blowdown, and acids.28
Other materials beyond those listed here
may be used in the operation of
Petroleum and Coal Product
Manufacturing facilities.
Facilities in this industry generate
significant amounts of hazardous
waste,29 including but not limited to,
primary and secondary sludges, spent
catalysts, filter clays and cakes, sour
26 CERCLA 108(b) Economic Sector Profile:
Petroleum and Coal Products Manufacturing
Industry.
27 Petroleum and Coal Products Manufacturing
Industry Practices and Environmental
Characterization.
28 EPA 310–R–95–013 Refinery Sector notebook.
29 According to the 2017 Hazardous Waste
Report, facilities in this sector reported the
generation of 5.6 million tons of hazardous waste.
https://rcrapublic.epa.gov/rcrainfoweb/action/
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water, heavy ends (distillation bottoms),
dissolved air/nitrogen flotation,
flotation debris, waste soils, oily sludge,
tank bottom sludge, clarified slurry oil,
slop oil emulsion solids, spent lime,
storm water silt, catalyst and coke fines,
and tank bottoms. Additionally,
insulating materials (such as asbestos)
that are hazardous substances must also
be managed properly.
Industry practices in certain
subsectors, the Petroleum Refineries
(324110), and Other Petroleum and Coal
Products Manufacturing (32419), of the
Petroleum and Coal Products
Manufacturing industry use more
hazardous substances and/or generate
larger volumes of hazardous waste than
the Asphalt Paving, Roofing and
Saturated Material Manufacturing
(32412), which uses and generates
smaller amounts of hazardous
substances or wastes. Further
information on industry practices is
provided in the background document
for this section, which is available in the
docket for this rulemaking.30
Sites contaminated by the industry
typically contain a wide variety of
contaminants, including but not limited
to toxic organics, such as benzene,
polychlorinated biphenyls (PCBs),
phenol, and volatile organic
hydrocarbons (VOCs); and heavy metals,
such as barium, cadmium, chromium,
copper, lead, selenium, and zinc. Other
substances beyond those listed here may
also have been released. In terms of
sources of contamination, improper
landfill/land disposal issues, as well as
contaminated soils resulting from
process activities, have been the most
common sources at contaminated sites.
Other examples of sources of
contamination included abandoned
units/materials and improper
wastewater management.
As outlined in the ANPRM, because
refineries tend to be operated for
decades, there is a long timeframe for
potential releases and exposure of
hazardous substances to occur. In
addition, because of their need for large
amounts of cooling water for operations,
refineries tend to be located near
navigable waterways or on the seashore,
which likely increases the potential to
impact groundwater, surface water,
aquatic biota, and aquatic vegetation.
Other impacts to terrestrial vegetation,
wetlands, wildlife, soils, air, cultural
resources, and humans that use these
resources recreationally or for
subsistence also are likely.31
30 Petroleum
and Coal Products Manufacturing
Industry Practices and Environmental
Characterization.
31 75 FR 826 (Jan. 6, 2010).
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Contamination of soils from the
petroleum refining processes is
generally less significant relative to the
contamination of water resources.32
While soil contamination can occur
from leaks or spills of spent catalysts or
coke dust, tank bottoms, or sludges from
the treatment processes, many of the
residuals produced during the refining
processes are typically recycled through
other stages in the process, or collected
and disposed of in landfills. Or they
may be recovered by other facilities.
Potential impacts to human health
and the environment may include large
spills that not only contaminate soil and
water but may also cause devastating
explosions and fires. The consequences
and associated releases from refinery
accidents can be significant. To ensure
immediate responses and to prevent or
reduce the likelihood of such incidents,
the industry is subject to several Federal
regulations and enforcement oversight
under various statutes, as discussed in
Sections VII.B. and VII.D. below.
C. Industry Economic Profile
Economic trends and financial health
in industrial sectors and their associated
firms can ultimately affect the ability of
individual firms to responsibly address
their environmental liabilities.
Circumstances in which firms face
financial stress can potentially
contribute to the abandonment of
facilities and the creation of orphan
waste sites requiring cleanup. To
consider the potential for firms to
default on their financial obligations,
EPA prepared a high-level economic
profile of the Petroleum and Coal
Products Manufacturing industry,
which includes a summary of relevant
financial metrics, industry default
statistics and trends, and a broad
discussion outlining environmental
liabilities under Chapter 11 of the
Bankruptcy Code. This analysis,
summarized in this section, looked at
the industry as a whole and additionally
focused on two subsectors individually,
providing an industry profile,
evaluation of the potential universe of
regulated entities, and discussion of the
subsector’s financial health and relative
volatility. The full analysis is found in
the background document for this
section and is available in the docket for
this rulemaking.33
Generally, this analysis found the
sector to be in a relatively stable
financial position with low default risk.
Firms in the industry maintain healthy
32 https://cfpub.epa.gov/ncer_abstracts/
index.cfm/fuseaction/display.files/fileID/14522.
33 CERCLA 108(b) Economic Sector Profile:
Petroleum and Coal Products Manufacturing
Industry.
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credit scores and reasonable levels of
debt relative to assets. The report did
note that despite a generally healthy
financial outlook, intrinsic market
volatility due to exogenous factors (e.g.,
geopolitical unrest) and supply and
demand shocks poses an ongoing threat
to stability. The report also notes that
firms generally remain liable for
environmental compliance obligations
under Chapter 11 debt restructuring.
Sections 101(5) and 1141(d) of the
Bankruptcy Code only provide for a
discharge of monetary rights to payment
and not for compliance obligations
where the Federal government has not
sought the payment of money. This may
serve to temper the impact to the Fund
of potential future volatility.
VII. Discussion of Cleanup Sites
Analysis
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A. Cleanup Site Evaluations
As described in the Approach to
Developing the Proposed Rule, Section
V above, to evaluate the need for
financial responsibility regulations in
the Petroleum and Coal Products
Manufacturing industry, EPA sought
examples of pollution that occurred
under a modern regulatory framework
and that required a taxpayer-funded
CERCLA cleanup. In its evaluation, EPA
focused first on identifying response
actions at Superfund National Priorities
List (NPL) sites and sites using the
Superfund Alternative Approach
(SAA),34 as those are generally larger
cleanups both in terms of amounts of
contaminants removed and in terms of
costs to carry out these cleanups. EPA
also looked at Superfund removals at
non-NPL sites.
To identify the relevant cleanup cases
in the Petroleum and Coal Products
Manufacturing industry, EPA included
the NPL sites already identified in the
2010 ANPRM,35 and supplemented the
dataset with additional NPL sites that
had been identified since the ANPRM,
sites using the SAA, and non-NPL
removal sites identified in EPA’s
Superfund Enterprise Management
System (SEMS) database. EPA collected
information on the timing and nature of
releases or threatened releases at these
sites. Specifically, EPA sought to
identify, as applicable, facility operation
34 The Superfund Alternative Approach (SAA)
uses the same CERCLA authority and investigation
and cleanup process and standards that are used for
NPL sites. The threshold criteria for using the SAA
are: (1) The site must have contamination
significant enough to make it eligible for listing on
the NPL; (2) the site is anticipated to need remedial
action; and, (3) there must be a cooperative, viable,
capable PRP that will sign a CERCLA agreement
with EPA to perform the necessary cleanup.
35 75 FR 816 (Jan.6, 2010).
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end dates, release dates, sources of
contamination, NPL proposal dates,
contaminated media, type of
contaminant, cleanup lead, and
information on Superfund expenditures
at the site, as well as other information.
For this collection, EPA relied on
information previously collected as part
of the ANPRM, information available in
Superfund site documents (e.g. NPL
listing narratives, Records of Decision,
Action Memos, Five-Year Reviews) and
information in EPA’s SEMS, as of March
2018. The cleanup case identification
and site information collection
processes are described in greater detail
in the relevant background documents,
which are available in the docket for
this rulemaking.36
After compiling information about the
risks and history of each site, EPA
sought to identify instances in which
releases occurred under the modern
regulatory framework that resulted in
Fund-financed response actions. To do
so, EPA’s methodology applied
sequenced screens to the identified
sites. EPA first screened out any NPL
sites or sites using the SAA where the
contaminant release or cleanup activity
occurred before 1980. EPA chose 1980
as the cutoff point to initially screen out
legacy contamination because it was the
year when CERCLA was enacted, as
well as the date of the initial regulations
under RCRA Subtitle C governing the
generation, treatment, storage, and
disposal of hazardous waste. EPA chose
to give these significant RCRA and
CERCLA milestones the greatest
consideration due to the large number of
issues of waste management, land
disposal and soil contamination
identified in the review of the NPL and
SAA cases. EPA believes the 1980 cutoff
date is a conservative screen (i.e., retains
more sites in the analysis) in that only
the initial RCRA regulations were in
place in 1980 and they were refined,
expanded and enhanced several times
over the next decades. Moreover, the
Agency’s enforcement authorities
expanded in the 1980s as the RCRA
program matured. Notably, the passage
of the Hazardous and Solid Waste
Amendments (HSWA) in 1984 resulted
in many regulatory changes and
enhanced enforcement mechanisms.
More specifically, HSWA created the
Land Disposal Restrictions (LDR)
program, codified in 40 CFR part 268,
36 Identification and Evaluation of CERCLA
108(b) National Priorities List (NPL) and Superfund
Alternative Approach (SAA) Cleanup Case Sites
Associated with the Petroleum and Coal Products
Manufacturing Industry and Identification and
Evaluation of CERCLA 108(b) Petroleum and Coal
Products Manufacturing Industry non-National
Priorities List (NPL) Removal Sites.
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which prohibits the land disposal of
untreated hazardous wastes. HSWA also
substantially expanded corrective action
authorities for both permitted RCRA
treatment, storage and disposal (TSD)
facilities and facilities operating under
interim status,37 requiring facilities to
address the release of hazardous wastes
and demonstrate financial responsibility
for completing the required corrective
actions, further reducing the risks that
sites would have to be addressed under
CERCLA. For further detail on these
requirements, see section VII. B below.
Next, EPA sought to remove from the
analysis sites where significant Fund
expenditures had not occurred, because
response actions that were paid for by
private parties do not support the need
for CERCLA Section 108(b) financial
responsibility regulations. Using the
‘‘Action Lead’’ field in SEMS associated
with each site, EPA screened out the
potentially responsible party (PRP) lead
sites. This left only the Mixed Lead
Construction or Government Performed
Construction sites in the analysis, under
the assumption that PRP Performed
Construction 38 sites did not present
significant expenses to the Fund.
EPA then reviewed the remaining
sites (i.e., those with both pollution
dates of 1980 or later and Mixed Lead
Construction or Government Performed
Construction designation in SEMS)
individually in greater detail.
Specifically, EPA considered the site
history and each of the contamination
sources at the site in the context of the
regulations that would be applicable to
that facility today. More information on
the regulations EPA considered is
available in Section VII.B.
Findings from EPA’s analysis of the
cleanup cases are discussed below, with
more detailed information in
background documents, which are
available in the docket for this
rulemaking.39 These background
documents provide the list of sites
identified and remaining at each stage of
the analysis, as well as the information
considered in the screening and review
process.
37 Interim status facilities are facilities that were
in existence on the effective date of the regulations
and subject to the requirement to have a RCRA
permit. The standards for interim status facilities
are not as stringent as those for permitted facilities.
38 These terms are used in the SEMS database to
identify the party that had primary responsibility
for construction at the sites.
39 Identification and Evaluation of National
Priorities List (NPL) Sites and sites using the
Superfund Alternative Approach (SAA) Cleanup
Cases in the Petroleum and Coal Products
Manufacturing Industry and Identification and
Evaluation of CERCLA 108(b) Petroleum and Coal
Products Manufacturing non-National Priorities List
(NPL) Removal Sites.
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Using the data sources described
above for the Petroleum and Coal
Products Manufacturing industry, EPA
identified 34 NPL or SAA sites, as well
as 51 non-NPL CERCLA removal action
sites 40 to evaluate according to the
methodology described above. As
described further below, none of the
contamination at NPL sites or sites
using the SAA were ultimately
considered incidents that occurred
under the modern regulatory framework
where significant taxpayer funds were
relied upon. For the removal sites, one
of the 51 cases showed releases of
hazardous substances under a modern
regulatory framework and required
taxpayer expenditures, as described
below.
The 34 NPL and SAA sites evaluated
include 23 petroleum refineries, nine
coke production facilities, and two sites
with oil re-refining and/or fuel blending
operations. At these 34 sites, improper
land disposal was the most prevalent
issue.
EPA applied the screens described
above to remove any PRP-Performed
Construction sites, as well as any sites
where the pollution occurred pre-1980,
to the 34 NPL and SAA sites. Eight sites
remained after those screens that were
either Government Performed
Construction or Mixed Lead
Construction (i.e., a combination of
Government and PRP) sites and had at
least one source of pollution that arose
in 1980 or later. To assess those eight
sites, EPA conducted a more detailed
review to compare the environmental
issues (e.g., contamination) at the sites
against the regulations applicable today.
Based on the detailed review, EPA
concluded that the pollution at six of
the eight Petroleum and Coal Products
Manufacturing NPL sites reflect legacy
practices. That is to say that while the
sites had at least one source of pollution
that arose in 1980 or later, the detailed
review of the sites’ histories concluded
that, for six of the eight sites, the
pollution arose before the RCRA
Subtitle C program was fully in place.
Several of the sites had long
operational histories pre-1980 that
contributed to a portion, if not all, of the
pollution. Additionally, at most of the
sites it was evident that pollution arose
prior to HSWA’s implementation. This
is relevant because four of these sites
had land disposal issues, five of these
sites had soil contamination resulting
from process activities, and four of these
sites had abandoned hazardous
substances at their sites. These sites predated the enactment of expanded
generator regulations, enhanced land
disposal unit technical standards,
enhanced enforcement provisions
(including facility-wide corrective
action), Land Disposal Restrictions, and
the Loss of Interim Status deadlines for
compliance with groundwater
monitoring and financial assurance
requirements at land disposal facilities,
and other protections afforded by
HSWA that would have mitigated these
issues. Please see Appendix 4 of the
background document for an
explanation of how the contamination at
these six sites would now be addressed
by regulations in place today.41
Regarding the other two of the eight
NPL sites that remained after the
screens, EPA’s detailed review indicated
that these sites may have had releases
under the modern regulatory
framework. Both sites had legacy land
disposal issues, due primarily to
improper disposal of hazardous waste,
which contributed significantly to the
site’s requiring a CERCLA action.
However, as detailed below,
notwithstanding a designation of mixed
or government lead in SEMS, neither of
these two sites required a level of
taxpayer expenditures high enough to
warrant imposing financial
responsibility on the whole industry.
The sites, Indian Refinery—Texaco
Lawrenceville in Illinois and Koch
Refining Co. in Minnesota, had
Superfund expenditures to date of
$720,511 and $26,659 (2017 USD),
respectively. At the Indian Refinery—
Texaco Lawrenceville site, which
operated from 1907 to 1995, various
owners or operators performed cleanup
work at the site starting as early as 1983.
EPA’s primary involvement at the site
was oversight of two short-term
cleanups, or removal actions, prior to
the site’s listing on the NPL in 2000.
Issues at the site primarily stemmed
from a waste disposal area where highly
acidic refinery wastes (e.g., lube oil
filter clay sludge; acid sludge; and spent
filter clays) were improperly disposed.
Waste at the site also migrated offsite,
requiring cleanup.
At the Koch Refining Co. site, Koch
Refining, a Potentially Responsible
Party, signed a consent agreement with
the State of Minnesota for cleanup of the
facility under RCRA authority in 1985.
Issues at the site included persistent
seepages from ponds, lagoons, and
waste piles identified in 1972 as well as
leaks, spills, and discharges from active
and inactive wastewater lagoons,
process areas, internal pipelines, and
waste treatment areas identified in
investigations conducted between 1986
and 1988. In 1995, EPA deleted the site
from the National Priorities List, and
determined that no further action under
the Superfund law was needed. The
refinery at the site is still in operation.
The results of the NPL and SAA sites
analysis is presented in Table 1, below.
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TABLE 1—EVALUATION RESULTS FOR NPL AND SAA SITES IN THE PETROLEUM AND COAL PRODUCTS MANUFACTURING
INDUSTRY
Total NAICS 324 NPL &
SAA sites evaluated
Number of NAICS 324
NPL & SAA sites
screened out based on
pre-1980, or
PRP lead status
Detailed review
concluded release
occurred prior to
the modern
regulatory framework
Detailed review
identified a
possible modern
regulation release
but no significant
taxpayer expenditures
Cases with
release(s) under
modern regulation
that required
taxpayer
funded response
34
26
6
2
0
Additionally, EPA looked at the
removal cases found in the SEMS
database to supplement this analysis.
For this sector, EPA identified 51 non-
NPL removal sites. Applying the same
methodology as above, EPA screened
out 30 sites because the environmental
releases occurred before 1980 or PRPs
led the response action. EPA also
excluded an additional 12 sites that
were deemed outside the scope of this
rulemaking because the industrial
40 None of the 51 removal sites are associated
with an NPL site. Removal actions that have taken
place at NPL sites or sites using the SAA, either
before or after listing or designation, are tracked in
SEMS as NPL or SAA level actions and not as
separate removal records.
41 Identification and Evaluation of National
Priorities List (NPL) Sites and Sites using the
Superfund Alternative Approach (SAA) in the
Petroleum and Coal Products Manufacturing
Industry.
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activities that resulted in release of
hazardous substances were neither
petroleum refining nor coal products
manufacturing. Four other sites were
left out of the analysis because of
insufficient documentation to fully
conduct the evaluation (i.e., not enough
to verify whether the sites included
pollution attributable to a NAICS 324
facility, or the nature/date of the
releases at the site).
To assess the five sites that remained
after those screens, EPA first conducted
a detailed review of case files to
compare the environmental issues at the
sites to the regulations applicable today.
At two of the five removal sites (United
Energy in Evanston, Indiana, and
Browns Island Emergency Response in
Weirton, West Virginia), while the
environmental releases had occurred
recently, EPA concluded that they had
resulted from legacy waste management
practices. For instance, at the United
Energy site, the refinery operations
ceased during the 1970s and the site
was abandoned. Though long
abandoned, the presence of former tars
pits and waste oil lagoons, PCB stained
soil, and PCB oils tanks at the site posed
threats to public health and the
environment, resulting in EPA’s
removal response in 2012; total Fund
expenditure reported at this site was
$583,000.42 Similarly, at the Browns
Island site, although operations at the
former coke by-product plant ceased in
1982, a release occurred in March 2008
when 300 gallons of liquid organic
chemicals (primarily naphthalene) that
had been stored in an abandoned tank
leaked during demolition work. The
current owner reported the spill to the
National Response Center (NRC) and
subsequently conducted the cleanup
activity with EPA’s oversight; total Fund
expenditure reported at this site was
$6,700.
At two other sites (St. Rose Air
Assessment Site in St. Charles Parish,
Louisiana, and Benicia Valero Refinery
in Benicia, California), EPA concluded
that the releases were caused by a onetime incident (malfunctioning of sulfur
removal equipment at the former and
power outage at the latter) which
resulted in release of air pollutants (e.g.,
sulfur dioxide, other organic
vapors).43 44 Although not designated as
PRP-lead actions in the SEMS database,
according to EPA’s review of site
documents, the PRPs largely financed
and performed the response actions
with oversight of EPA and state
agencies. SEMS expenditure data show
EPA incurred $75,000 in Fund
expenditures to conduct an air quality
monitoring and assessment at the St.
Rose site, after the state requested
assistance from EPA. No Fund
expenditures were reported at the
Benicia site.
The remaining removal site was Lake
Charles NRG, located in Lake Charles,
Louisiana. Petroleum refinery
operations occurred at this site from
1983 to 1999. The refinery operations
consisted of processing petroleum
feedstocks into naphtha, fuel oil, and
residual fuel oil. Rebel Energy, Inc.
constructed the site and began
intermittent operation in 1983.
Following several ownership changes
and bankruptcies, the site was
transferred to NRG in 1998. NRG
operated the facility for a short time
during 1999 and subsequently
abandoned it. Site assessment beginning
in 2000 identified hundreds of storage
systems (including above-ground tanks,
sludge boxes, vessels, and drums) and
process equipment containing over
200,000 gallons of hazardous liquids,
solid sludge, and liquid acid.45 A
subsequent visit by EPA also revealed a
tank that had failed, and oil was leaking
from the secondary containment
structures.
EPA concludes this site represents a
case in which a release or threatened
release of hazardous substances took
place under the modern regulatory
framework and required taxpayerfunded cleanup. As described in more
detail in the Role of Federal and State
Programs section below, the primary
regulations governing Above Ground
Storage Tanks (ASTs) used for storing
oil and petroleum products are the Spill
Prevention, Control, and
Countermeasure (SPCC) regulations, 40
CFR 112. These regulations have been in
place since 1990. Tank systems used to
store hazardous waste have also been
regulated under RCRA (40 CFR parts
264 and 265) since 1986.46 Moreover,
according to EPA’s records, no
financially viable PRPs were identified
for this site, and SEMS expenditure data
show that EPA incurred an estimated
cost of $2.3 million for response and
enforcement activities.
More detailed information can be
found in the background document 47
and supporting spreadsheets, which are
available in the docket for this
rulemaking. The background document
includes the list of sites identified for
analysis, as well as the data and
information considered in the screening
and review process. Table 2 presents the
summarized results of the analysis.
TABLE 2—EVALUATION RESULTS FOR SUPERFUND REMOVAL SITES IN THE PETROLEUM REFINERY AND COKE PRODUCTS
MANUFACTURING INDUSTRY
Total NAICS 324 superfund removal
cases evaluated
Number of NAICS 324
superfund removal
cases screened out
based on pre-1980,
or PRP lead status
Detailed review
concluded release
occurred prior to
the modern
regulatory framework
Detailed review
identified a
possible modern
regulation release
but no significant
taxpayer expenditures
Cases with
release(s) under
modern regulation
that required
taxpayer
funded response
51
30(16) 48
2
2
1
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Petroleum Exclusion
In identifying and reviewing cleanup
cases in the Petroleum and Coal
42 2012 Action Memorandum—Request for
Approval and Funding for Removal Action at the
United Energy Site, Spencer County, Evanston,
Indiana.
43 2017 Pollution Report for Benicia Valero
Refinery Site.
44 2014 and 2015 Pollution Reports for St. Rosa
Air Assessment.
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Products Manufacturing industry, EPA
was mindful of the CERCLA petroleum
exclusion. CERCLA Section 101
45 2012
Pollution Report for Lake Charles NRG
site.
46 51
FR 25472 (Jul. 14, 1986).
and Evaluation of CERCLA
108(b) Petroleum and Coal Products Manufacturing
non-National Priorities List (NPL) Removal Sites.
47 Identification
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excludes petroleum, or any fraction
thereof, from the statutory definition of
a hazardous substance unless it is listed
48 The number in parentheses indicates the sites
that were also removed at this stage in the analysis:
12 sites for which EPA determined the industrial
activities did not involve either petroleum refining
or coal products manufacturing, and four sites for
which there was not enough documentation to be
included in the analysis.
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or designated as a hazardous substance
under certain other environmental laws,
including RCRA. As a result, some
releases of ‘‘petroleum’’ are not subject
to CERCLA liability or response
authority.
Notwithstanding the exclusion, EPA’s
review of the cleanup sites that had
petroleum or coal product
manufacturing operations identified
numerous instances in which CERCLA
responses were taken. Many of these
instances pertained to sites where RCRA
hazardous wastes had been mishandled;
these releases were not excluded by the
petroleum exclusion. In reviewing
releases at Petroleum and Coal Products
Manufacturing sites, EPA was careful to
exclude from its analysis petroleum
releases at sites where CERCLA
authority was used to address other
releases. EPA encountered only one
release at an NPL site where the
petroleum exclusion brought the
release’s relevance to our analysis in
question. At this site, the Falcon
Refinery site, the release occurred from
a crude oil storage facility that had been
operating over a decade after the
refinery closed. As such, the release was
determined to have occurred at a facility
which is outside the scope of NAICS
324 and would better be classified as
NAICS 424710—Petroleum Bulk
Stations and Terminals. Thus, that
specific release was excluded from the
analysis on those grounds.
lotter on DSKBCFDHB2PROD with PROPOSALS
Prevalent Sources of Releases
EPA’s analysis of cleanup cases
compiled information, where
discernable, on the root cause of
releases. Across the industry overall, the
most prevalent issues were soil and
surface water and groundwater
contamination from unlined or leaking
storage tanks, drums, surface
impoundments, and surface water
lagoons, and uncontrolled polluted
stormwater runoff. Additionally, at NPL
sites using the SAA, and non-NPL
removal sites, abandoned units (e.g.,
tank farms, drums) containing
hazardous substances and soil
contamination resulting from process
activities were prevalent sources of
contamination. As discussed in the next
section, there are regulations in place
that address these types of releases.
B. Role of Federal and State Programs
and Voluntary Protective Industry
Practices at Facilities in the Petroleum
and Coal Products Manufacturing
Industry
In the 2010 ANPRM, EPA recognized
that the NPL data reflects releases
arising from activity that, in some cases,
predates CERCLA, RCRA, and other
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modern environmental requirements.
The Agency welcomed information
about current releases of hazardous
substances to the environment to help
inform EPA’s future actions. As
discussed in the Approach section of
this proposal, to enable EPA to base its
decision on risk posed by facilities
operating under modern conditions, i.e.,
the types of facilities to which financial
responsibility requirements would
apply, EPA developed an approach to
identify and consider relevant state and
Federal regulatory requirements and
financial responsibility requirements
that currently apply to operating
facilities, as well as voluntary protective
practices. EPA thus undertook an effort
to gather information about Federal and
state environmental programs and
industry voluntary programs that have
been implemented and are applicable to
currently operating facilities within the
Petroleum and Coal Products
Manufacturing industry today. EPA
evaluated the extent to which activities
that contributed to the risk associated
with the production, transportation,
treatment, storage, or disposal of
hazardous substances are now
regulated. EPA recognizes that
substantial advances have been made in
the development of manufacturing,
pollution control, and waste
management practices, as well as the
implementation of Federal and state
regulatory programs to prevent and
address releases at these facilities. In
part, EPA’s proposed decision to not
issue financial responsibility
requirements for this industry is based
on EPA’s review and analysis of Federal
regulations and complemented by state
program regulations. EPA’s proposed
findings and conclusions about the
impact of Federal and state
environmental programs, along with
industry voluntary programs, are
discussed in the following section.
Overview of Federal and State
Regulatory Programs and Industry
Voluntary Practices Applicable to
Facilities in the Petroleum and Coal
Products Manufacturing Industry
EPA evaluated Federal and state
regulations that address the potential for
release of hazardous substances to the
range of environmental media that may
be affected by a release from a facility
in the Petroleum and Coal Products
Manufacturing industry. EPA found that
a comprehensive regulatory framework
has developed since the enactment of
CERCLA. Federal statutes such as the
CAA, CWA, TSCA, RCRA, and the
Emergency Planning and Community
Right-to-Know Act (EPCRA) are
applicable across the entire industry
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and lay the foundation for this
regulatory framework. Specific
regulations are discussed in the
background document according to the
affected media that the regulations
address: Air pollution, water pollution,
emergency planning and response,
hazardous substances management, and
hazardous and non-hazardous waste
management and disposal. This
background document is located in the
docket for this rulemaking.49
Regulations Addressing Prevalent
Sources of Releases Identified in
Analysis of Cleanup Cases
EPA’s analysis of the cleanup cases
found that the most prevalent releases
involved:
• Surface and ground water
contamination from unlined or leaking
storage tanks, drums, surface
impoundments, and surface water
lagoons, and uncontrolled polluted
stormwater runoff;
• Abandonment and disposal of
contaminated soil and debris;
• Improper storage of hazardous
waste; and
• Soil and water contamination from
spills and hazardous substance
management practices.
The comprehensive regulations for
the management and disposal of
hazardous waste, promulgated under
the authority of RCRA, were designed to
prevent these types of releases and
assure that past spills are cleaned up by
facility owners and operators.
Specifically, Subtitle C of RCRA
required EPA to establish a hazardous
waste management program, and EPA
developed a ‘‘cradle to grave’’ approach
to control the generation, transportation,
treatment, storage, and disposal of
hazardous waste.50 EPA’s regulatory
approach under RCRA includes
standards specific to types of hazardous
wastes, types of hazardous waste
disposal facilities, and types of
hazardous waste disposal activities;
EPA enforces these standards through
permitting, reporting and inspection
programs.51
49 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Petroleum Refineries and Other
Petroleum and Coal Products Manufacturing
Facilities.
50 ‘‘EPA History: Resource Conservation and
Recovery Act,’’ EPA, at: https://www.epa.gov/
history/epa-history-resource-conservation-andrecovery-act.
51 ‘‘EPA History: Resource Conservation and
Recovery Act,’’ EPA, at: https://www.epa.gov/
history/epa-history-resource-conservation-andrecovery-act; ‘‘Summary of the Resource
Conservation and Recovery Act,’’ EPA, at: https://
www.epa.gov/laws-regulations/summary-resourceconservation-and-recovery-act.
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In 1980, under the authority of RCRA
Subtitle C, EPA promulgated the initial
hazardous waste management and
permitting regulations. These
regulations included the identification
of hazardous wastes that would be
regulated under RCRA Subtitle C. Under
Subtitle C, generators of hazardous
waste are required to ensure and fully
document that the hazardous waste they
produce is properly identified,
managed, tracked, and treated prior to
recycling or disposal. The degree of
regulation to which each generator is
subject depends to a large extent on how
much waste each generator produces
every calendar month. Early in the
development of the RCRA program, EPA
recognized that a relatively small
number of industrial facilities generated
the majority of the nation’s hazardous
waste. EPA initially focused on these
large quantity generators, i.e., those that
generate 1,000 kilograms or more of
non-acute hazardous waste per month
(or more than 1 kilogram of acute
hazardous waste per month). These
facilities must obtain an EPA
identification number and report the
quantities and types of hazardous waste
they generate, as well as the intended
receiving facility for treatment and
disposal, unless the waste will be
managed onsite. Large quantity
generators who send their waste offsite
are responsible for the proper packaging
and labeling of the waste before
transport and the tracking of the waste
to the destination facility using the
uniform hazardous waste manifest.
Large quantity generators may store
their waste on site for less than 90 days
before transport to a treatment and
disposal facility; that storage is subject
to the same unit-specific standards
(described below) applicable to
treatment, storage, and disposal
facilities.
RCRA Subtitle C also established
standards for hazardous waste
treatment, storage, and disposal
facilities (TSDFs). Operators that handle
or manifest hazardous waste at any
point in its lifecycle, including
generators and transporters, are required
to notify EPA of these activities. To keep
track, TSDF owners and operators must
keep records and make reports to EPA.
TSDFs are required to track hazardous
waste they receive through EPA’s
hazardous waste manifest system,
among other recordkeeping and
reporting standards.
RCRA Subtitle C regulations created a
permitting program for hazardous waste
TSDFs. The TSDF permitting
regulations include application
procedures, permit approval conditions,
and monitoring and reporting
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requirements. TSDFs must have permits
for the entirety of the active life of the
permitted units, including during
closure of waste management units.
New and existing hazardous waste
TSDFs must submit a RCRA permit
application at least 180 days before the
commencement of construction and/or
hazardous waste management
activities.52 Both permitted and interim
status TSDFs must comply with general
facility operating standards,
preparedness and prevention,
contingency plans and emergency
procedures, as well as specific technical
standards designed to insure that
hazardous waste management units
such as storage tanks and containers,
landfill, surface impoundments, waste
piles, land treatment of hazardous
waste, and solid waste management
units are operated in a manner that
prevents releases. To minimize the
potential for leachate to threaten human
health and the environment, EPA
developed design and operating
standards that use a combination of
different technologies and good
operating practices to detect, contain,
and clean up any leaks that might occur.
To prevent releases of hazardous waste
into the environment, containers
holding liquid hazardous wastes at a
permitted TSDF must have a secondary
containment system. Secondary
containment is emergency short-term
storage designed to hold leaks from
hazardous waste management units.
Slightly later in the 1980s, EPA
promulgated regulations that set
financial assurance requirements for
TSDFs.53 The TSDF standards
eventually included air emission
standards for process vents, equipment
leaks, tank systems, surface
impoundments, and containers. The
regulations covering proper
management of surface impoundments,
found in 40 CFR parts 264 and 265,
Subpart K, require facilities that store
hazardous waste in surface
impoundments to meet specific design
requirements, which include a double
liner system, leachate collection and
removal systems, and a leak detection
system. The regulations for containers,
found in 40 CFR parts 264 and 265,
Subpart I, include provisions regarding
design and operating requirements, and
inspections. Certain 40 CFR part 265
standards also apply to hazardous waste
containers at generator sites.
HSWA was enacted in 1984, largely in
response to citizen concerns that
existing methods of hazardous waste
disposal, particularly land disposal,
were not safe. With HSWA, Congress
sought to minimize waste generation
and phase out land disposal of
hazardous waste. Accordingly, in 1986,
EPA promulgated a suite of regulations
that established standards and
restrictions for land disposal of
hazardous waste. While the regulations
set stringent guidelines for the land
disposal of hazardous waste, some
hazardous wastes and some types of
land disposal are prohibited altogether.
Although there are exceptions, operators
are generally prohibited from diluting
hazardous waste as a substitute for
treatment. In addition, operators can
land dispose hazardous waste only
following treatment and only in
appropriate land treatment units,
landfills and surface impoundments.
Further, operators must meet testing,
removal, recordkeeping, and design
requirements. Additional standards,
restrictions, and prohibitions are in
place for hazardous waste that exhibited
ignitability, corrosivity, reactivity, or
toxicity.54
HSWA required that all landfills and
surface impoundments install
groundwater monitoring, comply with
technical requirements, such as double
liners and leachate collection, and
obtain financial assurance. The HSWA
amendments also added to RCRA’s
regulations for small quantity
generators, facilities that generated
between 100 to 1,000 kilograms per
month of hazardous waste, which were
previously exempt from RCRA rules.
These small quantity generator rules
took effect in 1986. Generators of less
than 100 kilograms per month of
hazardous waste (i.e., conditionallyexempt small quantity generators)
remained subject to significantly
reduced requirements.55 EPA amended
the hazardous waste generator
provisions in 2016, largely to clarify the
requirements.56
HSWA also established closure and
post-closure requirements for hazardous
waste TSDF facilities. The regulations
require facilities to develop closure
plans for all hazardous waste
management units. All TSDFs are
required to prepare and submit written
closure plans. A permitted facility
submits this plan as part of its permit
application. Once the plan is approved
by the permitting agency, it becomes
part of the facility’s operating permit.
52 45
54 51
53 45
55 Id.
FR 33063 (May 19, 1980).
FR 33063 (May 19, 1980); 47 FR 15047 (Apr.
7, 1982).
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56 81
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Interim status facilities 57 must have
written closure plans within six months
of becoming subject to the closure
regulations. Upon the completion of
closure of a hazardous waste disposal
unit, owners and operators must submit
a certification of closure to the relevant
state or EPA regional office. Following
closure, facilities must implement a
post-closure plan that abides by postclosure property use and care
guidelines. The standard post-closure
care period is 30 years, but this can be
shortened or extended on a case-by-case
basis by the permitting authority (i.e.,
the EPA Region or the authorized state
regulatory agency). Post-closure
notification and security requirements
remain in place so long as hazardous
waste is present at the facility, even
after the 30-year post-closure period.58
HSWA provided EPA with authority
to develop a broader corrective action
program. Under this program, EPA
requires owners and operators of
facilities that treat, store or dispose of
hazardous waste to investigate and
clean up hazardous releases into soil,
groundwater, surface water and air, thus
reducing the likelihood that these
facilities would require cleanup under
Superfund. RCRA permits issued to
TSDFs must include provisions for both
corrective action and financial
assurance to cover the costs of
implementing those cleanup measures.
EPA also possesses additional
authorities to order corrective action
through enforcement orders, which are
not contingent upon a facility’s permit.
In addition, facilities may voluntarily
choose to clean up their contamination.
EPA issued regulations under RCRA
Subtitle C that were specific to the
Petroleum and Coal Products
Manufacturing industry in 1980, 1990,
and 1998. In 1980, EPA classified the
following waste from the petroleum
refining industry as RCRA hazardous
waste: Dissolved air flotation float; slop
oil emulsion solids; heat exchanger
bundle cleaning sludge; separator
sludge; and leaded tank bottoms. In
1990, EPA classified the following as
RCRA hazardous waste: Petroleum
refinery primary oil/water/solids
separation sludge; and petroleum
refinery secondary (emulsified) oil/
water/solids separation sludge.
The 1998 regulations categorized four
wastes generated during petroleum
refining operations as hazardous wastes
subject to full Subtitle C regulation,
57 Interim status facilities are facilities that were
already in existence at the time of the enactment of
the permitting regulations. Interim status facilities
must comply with the requirements in 40 CFR part
265 until they receive their permit.
58 51 FR 16444 (May 2, 1986).
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while opting not to categorize an
additional ten petroleum refining wastes
as hazardous. The wastes that the 1998
rule classified as hazardous wastes
under RCRA were: Crude oil storage
tank sediment from petroleum refining
operations; clarified slurry oil storage
tank sediment and/or in-line filter/
separation solids from petroleum
refining operations; spent hydrotreating
catalyst from petroleum refining
operations, including guard beds used
to desulfurize feeds to other catalytic
units; and spent hydrorefining catalyst
from petroleum refining operations,
including guard beds used to
desulfurize feeds to other catalytic
units. The rule also changed RCRA
regulations to exclude certain oilbearing residuals from the definition of
solid waste—such as oil and oil-bearing
residuals that petroleum refineries
insert into the refining process and
spent caustic from liquid treating
operations that are used in chemical
production operations—in order to
promote the recycling of those
materials.59
In addition to Subtitle C
requirements, RCRA Subtitle D
established a program for management
and disposal of non-hazardous
industrial and municipal solid waste
through state solid waste management
plans that conform with Federal
guidelines. And RCRA Subtitle I
requires EPA to promulgate technical
standards and corrective action
requirements for owners and operators
of underground storage tanks (USTs),
including underground storage tanks
that contain hazardous substances or
petroleum products. The UST
regulations include requirements for
design, installation, notification,
operational procedures, release
reporting, release response and
corrective action procedures for
underground storage tank systems that
contain petroleum or hazardous
substances. The regulations also include
financial responsibility requirements for
underground storage tank owners and
operators. In addition, EPA has
established guidelines for the approval
of state underground storage tank
programs.60
In addition to the regulatory scheme
that RCRA imposes on the management
of hazardous waste in underground
storage tanks that store petroleum
products and chemicals, petroleum
refineries and coal products
manufacturing facilities are subject to a
number of additional regulatory
provisions that reduce the potential for
59 63
60 53
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FR 37082 and 43322 (Nov. 27, 2018).
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a Federally-financed response action.
Catastrophic releases of hazardous
substances and the use of toxic
chemicals and other hazardous
substances are additional environmental
and safety concerns for petroleum
refineries and coal products
manufacturing facilities. Several
environmental laws authorize
regulations requiring the development
of response plans for various
emergencies in order to reduce the
effects of a release, and to notify local
emergency response personnel and
facilitate cooperation. For example, EPA
implements the Chemical Accident
Prevention Provisions of Section 112(r)
of the Clean Air Act Amendments,
which require certain facilities to
generate Risk Management Plans (RMPs)
to mitigate the effects of a chemical
accident and coordinate with local
response personnel. Emergency Action
Plan (EAP) regulations under the
Occupational Safety and Health Act
(OSHA) require that employers prepare
a written EAP to create practices to
follow during workplace emergencies.
EPA implements regulations under the
EPCRA that impose emergency
planning, reporting, and notification
requirements for hazardous and toxic
chemicals.
Contamination of surface water is
largely addressed by the Clean Water
Act. The CWA established the National
Oil and Hazardous Substances Pollution
Contingency Plan (NCP), which sets a
blueprint for responding to oil spills
and hazardous substance releases. At its
inception in 1968, the NCP provided a
comprehensive Federal system of
accident reporting, spill containment,
and cleanup of oil spills. In 1972, the
CWA expanded it to include hazardous
substance releases.61
The 1990, Oil Pollution Act amended
the CWA and authorized regulations
requiring facility owners or operators to
prepare response plans for worst-case
scenario oil discharges. In addition, the
Oil Pollution Prevention Regulations
require facilities that store or use certain
amounts of oil and oil products to
develop SPCC Plans to prevent the
discharge of oil to navigable waters in
case of a spill. EPA finalized the full
suite of amendments to the Oil
Pollution Prevention Regulation in
2002.62
61 ‘‘National Oil and Hazardous Substances
Pollution Contingency Plan (NCP) Overview,’’ at:
https://www.epa.gov/emergency-response/nationaloil-and-hazardous-substances-pollutioncontingency-plan-ncp-overview.
62 40 CFR 112; ‘‘Overview of the Spill Prevention,
Control, and Countermeasure (SPCC) Regulation,’’
EPA, at: https://www.epa.gov/oil-spills-prevention-
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State Regulatory Programs
Some states impose requirements on
the Petroleum and Coal Products
Manufacturing industry in addition to
requirements related to Federal
programs. These stricter or additional
standards for emissions, spill
prevention, emergency preparedness,
and hazardous substance management
on facilities that handle toxic or
hazardous chemicals can reduce risk at
facilities that manage hazardous
substances. EPA researched state
environmental regulations relevant to
the Petroleum and Coal Products
Manufacturing industry for a
representative sample of states. A
discussion of these state regulations, as
well as the methodology EPA used in
selecting the 11 states that it researched,
is in a background document, which is
available in the docket for this
rulemaking.63
States with significant oil and gas
refining and manufacturing industries
have implemented state regulations
applicable to facilities that store or use
oil and oil-related materials, including
petroleum refineries and petroleum and
coal product manufacturing facilities.
For example, Alaska has established
requirements for owners or operators of
petroleum production facilities to
prevent the discharge of oil; these
regulations include financial
responsibility provisions for oil terminal
facilities. Alaska also established
comprehensive workplace safety
standards for the petroleum refining
industry, including standards for
process equipment maintenance,
equipment leakage, and breakage.
Industry Voluntary Practices
EPA reviewed facility RMPs, industry
materials, governmental literature, and
academic literature to locate voluntary
programs that: (1) Attempt to address
CERCLA hazardous substance
management or disposal, and release
prevention, mitigation, and response; (2)
are relevant to petroleum refineries and
coal products manufacturing facilities;
and (3) in which petroleum refineries
and coal products manufacturing
facilities participate. Industry voluntary
programs fall into three categories:
Those sponsored by Federal, state or
local governmental agencies; those
fostered within industry associations or
non-governmental organizations; and
and-preparedness-regulations/overview-spillprevention-control-and.
63 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Petroleum Refineries and Other
Petroleum and Coal Products Manufacturing
Facilities.
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those implemented by individual firms.
These programs set or publish
environmental management and safety
standards that facilities may follow to
supplement Federal and state
requirements with additional standards
and may come with a certification from
the government agency or industry
group that establishes the standards.
Voluntary programs may also serve as
forums for coordination and
collaboration among companies,
facilities, and government agencies to
develop best practice standards and
improve emergency preparedness.
EPA’s review of available studies found
that the industry voluntary programs
can be effective at reducing both
pollution and the frequency of
government enforcement actions. A
discussion of industry voluntary
practices, as well as the methodology
used by EPA, is in a background
document, which is available in the
docket for this rulemaking.64
C. Existing State and Federal Financial
Responsibility Programs
To help inform the level of risk of a
Fund-financed response action
associated with classes of facilities in
the Petroleum and Coal Products
Manufacturing industry, EPA reviewed
existing state and Federal financial
responsibility programs that may be
applicable to the industry and that cover
a wide range of liabilities, including
liabilities for closure, post-closure care,
corrective action, third-party personal
injury/property damage, and natural
resource damages. EPA focused on these
types of financial responsibility
programs for two reasons. First, these
categories of damages, actions, and costs
are like those that could be covered by
CERCLA Section 108(b) rulemaking, and
thus they help inform the need for
CERCLA Section 108(b) financial
responsibility for this industry.
Secondly, the existence of financial
responsibility requirements can help
create incentives for sound practices,
reducing the risk of releases requiring
CERCLA response action. EPA also
sought to identify state cleanup funds
that are at least partially funded by
industry (e.g., through a tax on
hazardous wastes generated), and that
could cover future CERCLA liabilities
that may arise at petroleum and coal
product manufacturing facilities. EPA’s
report focused on the 25 states reviewed
in EPA’s reports on existing state
regulatory and voluntary programs
(excluding financial responsibility
programs) that may be applicable to
64 Id.
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70481
petroleum and coal product
manufacturing facilities.
Finally, EPA reviewed existing
financial responsibility requirements in
the following Federal programs: (1)
RCRA Subtitle C TSDFs; (2) TSCA
commercial PCB waste facilities; and (3)
EPA Safe Drinking Water Act
Underground Injection Control wells.
The report is available in the docket for
this rulemaking.65
EPA identified a range of existing
financial responsibility programs that
may be applicable to facilities in the
Petroleum and Coal Products
Manufacturing industry. The programs
include the Federal programs
mentioned above, as well as state
programs related to:
• Financial responsibility for used oil
processing and re-refining facilities,
• Financial responsibility for
hazardous waste TSDFs,
• Financial responsibility for
underground injection of hazardous
wastes,
• Financial responsibility for storage
tanks containing hazardous substances,
• Corrective action financial
responsibility to address hazardous
waste or hazardous constituents,
• Facility remediation financial
responsibility associated with transfer
in ownership or facility closure, and
• Other authorities to require
financial responsibility to assure
compliance with orders.
The applicability of these programs
will depend on a variety of facilityspecific factors, for example, use of a
specific piece of equipment (e.g., an
underground storage tank that contains
regulated substances) or engaging in a
specified activity (e.g., a release of a
hazardous substance). Furthermore,
state financial responsibility programs
vary by state and some types of financial
responsibility programs exist only in
limited subsets of the states reviewed.
EPA believes that state and Federal
financial responsibility programs help
reduce risk of a Fund-financed response
action at facilities where they are
applicable. While financial
responsibility programs vary in
structure and function, they may reduce
such risk in a myriad of ways. For
example, they may help ensure
undercapitalized firms do not engage in
environmentally risky enterprises,
reduce the incentive to abandon
properties with extensive
contamination, ensure compliance with
protective requirements, and incentivize
better environmental practices.
65 Review of Existing Financial Responsibility
Laws Potentially Applicable to Classes of Facilities
in the Petroleum and Coal Products Manufacturing
Industry.
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D. Compliance and Enforcement History
To understand the experience of court
settlements and judgments, EPA looked
at compliance and enforcement in the
Petroleum and Coal Products
Manufacturing industry. EPA believes
that compliance assistance, compliance
monitoring, and enforcement are
important components of the regulatory
framework discussed above. Through
inspections, compliance monitoring can
identify noncompliance at regulated
facilities. Enforcement actions may
result in legal instruments that ensure
correction of deficiencies to achieve
compliance with environmental
requirements. Some functions of
compliance and enforcement actions are
particularly pertinent to the risk
determination for rulemaking under
CERCLA Section 108(b). First, if
noncompliance causes release of a
hazardous substances EPA can ensure in
negotiated agreements that the
responsible party carries out or pays for
the cleanup. Second, enforcement
actions can result in orders and
settlements that compel a responsible
party to return to compliance. Third, the
prospect of financial penalties that can
accompany these enforcement
instruments can encourage compliance.
All of these functions support the
regulatory structure in reducing risk of
Fund expenditures.
EPA looked at applicable enforcement
authorities as well as historical
enforcement and compliance data in the
development of this proposal. EPA
obtained data from the EPA
Enforcement and Compliance History
Online (ECHO) system and provides a
review of the Federal environmental
enforcement settlements and judgments
data from FY 1974 through FY 2017.66
Facilities whose primary NAICS codes
indicate Petroleum and Coal Products
Manufacturing (NAICS 324) were
included in EPA’s review. ECHO data
show that targeted initiatives and
routine review or inspection of facilities
resulted in over 2500 enforcement cases
in the Petroleum and Coal Products
Manufacturing industry from FY 1974
through FY 2017. CAA (53%) and CWA
(18%) cases were the most common.
There are a smaller number of cases in
RCRA (9%), CERCLA (8%), EPCRA
(6%), and TSCA (4%). Further
description of this review is in the
background document, which is
66 ECHO does not include all of EPA’s compliance
and enforcement activity because regions are not
required to report ‘‘informal actions,’’ and it does
not consistently capture all state actions.
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available in the docket for this
rulemaking.67
As noted above, the Risk Management
Program under Chemical Accident
Prevention Provisions of Section 112(r)
of the Clean Air Act Amendments
requires certain facilities to generate
Risk Management Plans (RMPs) to
mitigate the effects of a chemical
accident and coordinate with local
response personnel. Assuring
compliance with this program has been
a priority of EPA’s Office of
Enforcement and Compliance Assurance
since 2017.
Enforcement cases can include
instances in which removal action,
release reduction, or return to
compliance include the removal of
contaminated media by the responsible
party. Measures to remove
contamination may be required in
enforcement orders under the range of
environmental statutes and are
negotiated to require activities aligned
with return to compliance.68 In this
situation, enforcement action directly
reduces risks to human health and the
environment. During the period FY
2011 through FY 2016, 14 settled
Petroleum and Coal Products
Manufacturing industry enforcement
cases were flagged in ECHO as involving
removal of contaminated media. They
are primarily CWA (8 of the 14) cases.
One Clean Air Act, two RCRA and three
CERCLA cases are also included.
The substances removed included
metals, hydrocarbons, asbestos, and
hazardous chemicals. These cleanups
resulting from Federal enforcement
actions mitigated risks to human health
and the environment, removing
contaminated soils, groundwater and a
variety of hazardous substances, and
reduced likelihood of impact to the
Fund.
Settlements and judgments in
enforcement cases can result in
financial penalties, supplemental
environmental projects (SEPs), and
activities required to return to
compliance.69 Enforcement settlements
and judgments can ensure that the
responsible party conducts or pays for
67 Enforcement, Court Settlements and Judgments
in the Petroleum and Coal Products Manufacturing
Industry.
68 These ECHO enforcement removals are
separate from the Superfund removals analyzed
elsewhere. ECHO system data includes the
combined value of total enforcement financial
penalties, Supplemental Environmental Projects
(SEPs), and associated compliance activity.
69 Compliance actions ordered can include the
removal of contaminated media, installation of new
equipment, or implementation of compliant
processes.
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cleanup, drive a return to compliance,
and incentivize compliance.
As stated in the cleanup site
evaluations in Section VII.A, particular
consideration was given to CERCLA and
RCRA regulations that had relevant
components which apply to the
Petroleum and Coal Products
Manufacturing industry. There have
been over 400 CERCLA and RCRA
enforcement cases in this industry,
beginning in 1981. For context, there are
approximately 2,167 establishments
currently operating in the industry. The
ten largest CERCLA or RCRA
enforcement settlements and judgments
for the Petroleum and Coal Products
Manufacturing industry each have 2017
inflation-adjusted total values ranging
from over $13 million to $72 million.
Further discussion of the details on the
Federal actions for these and additional
criminal cases can be found in the
background document for this section
and is available in the docket for this
rulemaking.70 This document lists
facilities where noncompliance was
identified and was addressed by means
of formal Federal enforcement. The
background document does not include
facilities where noncompliance was
addressed through informal
enforcement or facilities where
noncompliance was addressed by a
state. In addition, it does not include
facilities where noncompliance was not
identified, either because those facilities
were not inspected or because they were
inspected and found in compliance.
The compliance and enforcement
actions documented here and in the
background document show that where
noncompliance is identified, the
preponderance of industry responsible
parties are conducting or paying for
cleanups, returning to compliance, and
improving public health and the
environment. Although enforcement
actions alone do not completely
supplant the need for Fund-financed
response actions in the Petroleum and
Coal Products Manufacturing industry
(as discussed in section VIII, below),
effective criminal, civil and judicial
enforcement demonstrates proper
functioning of this component of the
modern regulatory framework.
Enforcement thus serves as a
complementary element supporting the
overall conclusion that CERCLA Section
108(b) financial assurance is not
necessary.
70 Enforcement, Court Settlements and Judgments
in the Petroleum and Coal Products Manufacturing
Industry.
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VIII. Decision to Not Propose
Requirements
Based on consideration of the
analyses described in the previous
sections, EPA has reached a conclusion
that the degree and duration of risk
posed by the Petroleum and Coal
Products Manufacturing industry does
not warrant financial responsibility
requirements under CERCLA Section
108(b) and thus is proposing to not issue
such requirements. The analysis and
proposed finding in this proposal are
not applicable to and do not affect,
limit, or restrict EPA’s authority (1) to
take a response action or enforcement
action under CERCLA at any facility in
the Petroleum and Coal Products
Manufacturing industry, including any
currently operating facilities or those
described in this proposal and in the
background documents for this
proposal, and (2) to include
requirements for financial responsibility
as part of such response action. The set
of facts in the rulemaking record related
to the individual facilities discussed in
this proposed rulemaking supports the
Agency’s proposal not to issue financial
responsibility requirements under
Section 108(b) for this class, but a
different set of facts could demonstrate
a need for a CERCLA response action at
an individual site. This proposed
rulemaking also does not affect the
Agency’s authority under other
authorities that may apply to individual
facilities, such as the CAA, CWA,
RCRA, and TSCA.
EPA believes the evaluation of the
Petroleum and Coal Products
Manufacturing industry demonstrates
significantly reduced risk of a Fundfinanced response action at current
operations. The reduction in risks due
to the requirements of existing
regulatory programs and voluntary
practices, combined with reduced costs
to the taxpayer—demonstrated by EPA’s
cleanup case analysis, existing financial
responsibility requirements, and
enforcement actions—has reduced the
need for Federally-financed response
action at facilities in the Petroleum and
Coal Products Manufacturing industry.
EPA looked at current industry
practices, market structure and
economic performance of the industry;
analyzed cleanup cases for facilities in
the industry; and evaluated the extent to
which the industry and sources of
releases are covered by the modern
regulatory framework, the degree to
which taxpayers have been called upon
to pay for cleanup, and EPA
enforcement history in the industry.
As discussed in section VII.A, EPA
identified only one cleanup case that
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occurred under the modern regulatory
framework and also entailed some Fund
expenditure. Overwhelmingly, however,
the industry was found to be practicing
responsibly within the current
regulatory framework, with just one site
indicating a significant impact to the
Fund while operating under the modern
regulatory framework. For context, there
are approximately 2,167 establishments
currently operating in the industry. The
language in Section 108(b) on
determining the degree and duration of
risk and on setting the level of financial
responsibility confers a significant
amount of discretion on EPA. In the
past, some of the risks associated with
spills resulted from, or were exacerbated
by, cleanups not being undertaken in a
timely fashion. However, under the
modern regulatory framework,
requirements such as the Risk
Management Plan under the CAA, the
Emergency Action Plan under OSHA,
and as RCRA requirements for TSDFs to
detect, contain, and clean up any leaks,
including facility-wide corrective
action, all help to ensure timely
responses to releases. In addition to the
requirements for facilities to respond to
spills in a timely fashion, the public can
alert the Federal government to releases
by calling the National Response Center
(NRC), which is a part of the Federally
established National Response System
and staffed 24 hours a day by the U.S.
Coast Guard. The NRC is the designated
Federal point of contact for reporting all
oil, chemical, radiological, biological
and etiological discharges into the
environment, anywhere in the United
States and its territories.
Only one site (discussed in detail in
Section VII.A) had significant releases
or threatened releases of hazardous
substances under the modern regulatory
framework and required more than
minimal taxpayer-funded cleanups.
Additionally, none of the at least 20
refineries that have closed since 2000,
under the modern regulatory
framework, had releases that resulted in
a more than minimal burden to the
Fund. It is EPA’s assessment that the
small set of Federally-funded cleanup
cases due to recent contamination does
not warrant the imposition of costly
financial responsibility requirements on
the entire Petroleum and Coal Products
Manufacturing industry under CERCLA
Section 108(b).
EPA acknowledges that regulations do
not always prevent releases, and the risk
of a release is lessened but never
eliminated by existing Federal and state
environmental regulations. However,
EPA believes that the network of
Federal and state regulations creates a
comprehensive framework that applies
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to prevent releases that could result in
a need for a Fund-financed response
action. Numerous Federal programs
have been established under several
environmental statutes since CERCLA
was enacted on December 11, 1980.
These include programs under RCRA,
which requires proper management and
disposal of hazardous waste; under
TSCA, which regulates the manufacture
and sale of chemicals; and under both
the CWA and the CAA, which address
releases to water and air. In addition to
these Federal programs, some states
have stricter or additional standards
beyond Federal requirements. These
Federal and state programs are
discussed in detail in Section VII. B and
in the background document, which is
available in the docket for this
rulemaking.71
In addition, enforcement settlements
and judgments that force return to
compliance are important components
of the applicable regulatory structure.
EPA’s analysis of enforcement history
shows that enforcement of the
applicable regulations provides a lever
to monitor compliance, obtain
responsible party cleanups, and recover
financial penalties. Federal and state
regulatory programs, backed up by
enforcement and complemented by
industry voluntary practices, have
improved public health and the
environment significantly since
CERCLA’s initial adoption nearly 40
years ago. EPA believes that within the
Petroleum and Coal Products
Manufacturing industry, this framework
provides effective controls that protect
human health and the environment.
Examination of market structures for
the Petroleum and Coal Products
Manufacturing industry further
indicates comparatively low likelihood
of default on environmental obligations
at the expense of taxpayers and the
government by companies in this
industry. This economic performance,
combined with the low impact to the
Fund by facilities with releases that
happened under the modern regulatory
framework, suggests that the degree of
risk to the Fund by this industry does
not rise to a level that warrants
imposing CERCLA Section 108(b)
financial responsibility requirements.
For these reasons, EPA is proposing
today to not issue financial
responsibility requirements under
CERCLA Section 108(b) for this
industry.
71 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Petroleum and Coal Products
Manufacturing Facilities.
E:\FR\FM\23DEP1.SGM
23DEP1
70484
Federal Register / Vol. 84, No. 246 / Monday, December 23, 2019 / Proposed Rules
A. Solicitation of Public Comment on
This Proposal
EPA solicits comments on all aspects
of today’s proposal. EPA is specifically
interested in receiving comments on
several issues and requests the
following information:
• Examples of Petroleum and Coal
Products Manufacturing industry
related response actions for releases
which took place under the modern
regulatory framework where potentially
responsible parties (PRPs) did not lead
the response at the facility.
• Examples of Petroleum and Coal
Products Manufacturing industry
related response actions for releases
which took place under the modern
regulatory framework where PRPs have
not taken financial responsibility for
their environmental liabilities.
• Information on state-lead or other
Federal agency cleanups or instances of
natural resource damages associated
with this industry that may supplement
the information on cleanups gathered
and analyzed for this proposal.
• Information about existing Federal,
state, tribal, and local environmental
requirements applicable to the
Petroleum and Coal Products
Manufacturing industry relevant to the
prevention of releases of hazardous
substances that were not evaluated as
part of this proposal.
• Information about financial
responsibility requirements applicable
to the Petroleum and Coal Products
Manufacturing industry that were not
evaluated as part of this proposal.
IX. Statutory and Executive Order
Reviews
lotter on DSKBCFDHB2PROD with PROPOSALS
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
This action is a significant regulatory
action that was submitted to the Office
of Management and Budget (OMB) for
review, because it may raise novel legal
or policy issues [3(f)(4)]. Any changes
made in response to OMB
recommendations have been
documented in the docket for this
rulemaking. EPA did not prepare an
economic analysis for the proposed rule,
since this action proposes no regulatory
requirements.
B. Executive Order 13771: Reducing
Regulation and Controlling Regulatory
Costs
This proposed rule is not subject to
the requirements of Executive Order
13771 (82 FR 9339, February 3, 2017)
because this proposed rule would not
result in additional cost.
VerDate Sep<11>2014
16:30 Dec 20, 2019
Jkt 250001
C. Paperwork Reduction Act (PRA)
This action does not propose an
information collection burden under the
PRA, because this action does not
propose any regulatory requirements.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have
a significant economic impact on a
substantial number of small entities
under the RFA. This action does not
propose any new requirements for small
entities.
E. Unfunded Mandates Reform Act
(UMRA)
J. National Technology Transfer and
Advancement Act
This rulemaking does not involve
technical standards.
K. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
EPA believes that this action is not
subject to Executive Order 12898
because it does not establish an
environmental health or safety standard,
since this action proposes no regulatory
requirements.
List of Subjects in 40 CFR Part 320
This action does not contain any
unfunded mandate as described in
UMRA, 2 U.S.C. 1531–1538, and does
not significantly or uniquely affect small
governments, because this action does
not propose any regulatory
requirements.
Dated: December 4, 2019.
Andrew R. Wheeler,
Administrator.
F. Executive Order 13132: Federalism
[FR Doc. 2019–27066 Filed 12–20–19; 8:45 am]
This action does not have federalism
implications. It will not have substantial
direct effects on the states, on the
relationship between the Federal
Government and the states, or on the
distribution of power and
responsibilities among the various
levels of government, since this action
proposes no new regulatory
requirements.
BILLING CODE 6560–50–P
G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
This action does not have tribal
implications as specified in Executive
Order 13175, because this action
proposes no regulatory requirements.
Thus, Executive Order 13175 does not
apply to this action.
H. Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
This action is not subject to Executive
Order 13045 because it is not
economically significant as defined in
Executive Order 12866, and because
EPA does not believe the environmental
health or safety risks addressed by this
action present a disproportionate risk to
children, since this action proposes no
regulatory requirements.
I. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
This action is not a ‘‘significant
energy action’’ because it is not likely to
have a significant adverse effect on the
supply, distribution or use of energy,
since this action proposes no regulatory
requirements.
PO 00000
Frm 00046
Fmt 4702
Sfmt 4702
Environmental protection, Financial
responsibility, Hazardous substances,
Petroleum.
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Parts 51, 61, and 69
[WC Docket No. 18–155; Report No. 3137;
FRS 16323]
Petition for Reconsideration of Action
in Proceeding
Federal Communications
Commission.
ACTION: Petition for reconsideration.
AGENCY:
A Petition for Reconsideration
(Petition) has been filed in the
Commission’s proceeding listed below
by James U. Troup, on behalf of Iowa
Network Services, Inc. d/b/a Aureon
Network Services.
DATES: Oppositions to the Petition must
be filed on or before January 7, 2020.
Replies to an opposition must be filed
on or before January 17, 2020.
ADDRESSES: Federal Communications
Commission, 445 12th Street SW,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT:
Lynne Engledow, Pricing Policy
Division, Wireline Competition Bureau,
at (202) 418–1540, email:
Lynne.Engledow@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s
document, Report No. 3137, released
December 10, 2019. The full text of the
Petition is available for viewing and
copying at the FCC Reference
Information Center, 445 12th Street SW,
Room CY–A257, Washington, DC 20554.
SUMMARY:
E:\FR\FM\23DEP1.SGM
23DEP1
]]>Agencies
[Federal Register Volume 84, Number 246 (Monday, December 23, 2019)]
[Proposed Rules]
[Pages 70467-70484]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27066]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 320
[EPA-HQ-OLEM-2019-0087; FRL-10003-10-OLEM]
RIN 2050-AH06
Financial Responsibility Requirements Under CERCLA Section 108(b)
for Facilities in the Petroleum and Coal Products Manufacturing
Industry
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA (or the Agency) is proposing to not impose financial
responsibility requirements for facilities in the Petroleum and Coal
Products Manufacturing industry under Section 108(b) of the
Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA). Section 108(b) addresses the promulgation of regulations that
require classes of facilities to establish and maintain evidence of
financial responsibility consistent with the degree and duration of
risk associated with the production, transportation, treatment,
storage, or disposal of hazardous substances.
DATES: Comments must be received on or before February 21, 2020.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OLEM-2019-0087, at https://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. EPA may publish any comment
received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written
[[Page 70468]]
comment. The written comment is considered the official comment and
should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e. on the Web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: For more information on this document,
contact Charlotte Mooney, U.S. Environmental Protection Agency, Office
of Resource Conservation and Recovery, Mail Code 5303P, 1200
Pennsylvania Ave. NW, Washington, DC 20460; telephone (703) 308-7025 or
(email) [email protected].
SUPPLEMENTARY INFORMATION:
How can I get copies of this document and other related information?
This Federal Register proposed rule and supporting documentation
are available in a docket EPA has established for this action under
Docket ID No. EPA-HQ-OLEM-2019-0087. All documents in the docket are
listed in the https://www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, will be publicly available only in hard copy. Publicly
available docket materials are available either electronically at
https://www.regulations.gov or in hard copy at EPA/DC, WJC West, Room
3334, 1301 Constitution Ave. NW, Washington, DC 20460. This Docket
Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The Docket Facility telephone number is (202)
566-0276. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m.,
Monday through Friday, excluding legal holidays. The telephone number
for the Public Reading Room is (202) 566-1744.
Table of Contents
I. Executive Summary
A. Overview
B. Purpose of This Action
C. Summary of the Major Provisions of the Regulatory Action
D. Costs and Benefits of the Regulatory Action
II. Authority
III. Background Information
A. Overview of Section 108(b) and Other CERCLA Provisions
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of Facilities for
Development of CERCLA Section 108(b) Financial Responsibility
Requirements
2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
3. 2014 Petition for Writ of Mandamus
4. Additional Classes 2017 Notice of Intent To Proceed With
Rulemakings
IV. Statutory Interpretation
V. Approach To Developing This Proposed Rule
VI. Petroleum and Coal Products Manufacturing Industry Overview
A. Identification of Petroleum and Coal Products Manufacturing
Industry
B. Current Industry Practices
C. Industry Economic Profile
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
B. Role of Federal and State Programs and Voluntary Protective
Industry Practices at Facilities in the Petroleum and Coal Products
Manufacturing Industry
C. Existing State and Federal Financial Responsibility Programs
D. Compliance and Enforcement History
VIII. Decision to Not Propose Requirements
A. Solicitation of Public Comment on This Proposal
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act (UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
H. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
I. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
J. National Technology Transfer and Advancement Act
K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
I. Executive Summary
A. Overview
Section 108(b) of the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) directs EPA to develop
regulations that require classes of facilities to establish and
maintain evidence of financial responsibility consistent with the
degree and duration of risk associated with the production,
transportation, treatment, storage, or disposal of hazardous
substances. The statute further requires that the level of financial
responsibility be established to protect against the level of risk the
President, in his discretion, believes is appropriate, based on factors
including the payment experience of the Hazardous Substance Superfund
(Fund). The President's authority under this section for non-
transportation-related facilities has been delegated to the EPA
Administrator.
This proposal is based on EPA's interpretation of the statute and
analysis of its record developed for this rulemaking.\1\ EPA has
analyzed the need for financial responsibility based on risk of
taxpayer funded cleanups at facilities in the Petroleum and Coal
Products Manufacturing Industry operating under modern management
practices and modern environmental regulations, i.e., the type of
facilities to which financial responsibility regulations would apply.
---------------------------------------------------------------------------
\1\ EPA's interpretation of the statute was upheld by the D.C.
Circuit in Idaho Conservation League v. Wheeler, No. 18-1141, slip
op. at 9-12 (D.C. Cir. July 19, 2019).
---------------------------------------------------------------------------
That risk is identified by examining the management of hazardous
substances at such facilities, as well as by examining Federal and
state regulatory controls on that management and Federal and state
financial responsibility requirements.
Based on that examination, EPA is proposing that, in the context of
CERCLA Section 108(b), the degree and duration of risk associated with
the modern production, transportation, treatment, storage or disposal
of hazardous substances by the Petroleum and Coal Products
Manufacturing Industry does not present a level of risk of taxpayer
funded response actions that warrant imposition of financial
responsibility requirements for this sector.
In August 2014, the Idaho Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a
Better Environment filed a lawsuit in the U.S. Court of Appeals for the
District of Columbia Circuit, seeking a writ of mandamus requiring
issuance of CERCLA Section 108(b) financial responsibility rules for
the hardrock mining industry, and for the three additional industries
identified by EPA in the 2010 Advance Notice of Proposed Rulemaking
(ANPRM),\2\ that is, Chemical Manufacturing; Petroleum and Coal
Products Manufacturing; and Electric Power Generation, Transmission,
and Distribution. Following oral arguments, EPA and the
[[Page 70469]]
petitioners submitted a Joint Motion for an Order on Consent, filed on
August 31, 2015, which included a schedule for further administrative
proceedings under CERCLA Section 108(b). The court order granting the
motion was issued on January 29, 2016. A copy of the order can be found
in the docket for this rulemaking.
---------------------------------------------------------------------------
\2\ 75 FR 816 (Jan. 6, 2010).
---------------------------------------------------------------------------
In addition to requiring EPA to publish a proposed rule on hardrock
mining financial requirements by December 1, 2016, the January 2016
Order required EPA to sign for publication in the Federal Register a
determination whether EPA will issue a notice of proposed rulemaking on
financial assurance requirements under Section 108(b) in the (a)
chemical manufacturing industry; (b) petroleum and coal products
manufacturing industry; and (c) electric power generation,
transmission, and distribution industry by December 1, 2016. EPA signed
the required determination on December 1, 2016; the notice was
published on January 11, 2017,\3\ and announced EPA's intent to proceed
with rulemakings for all three of the classes.
---------------------------------------------------------------------------
\3\ 82 FR 3512 (Jan. 11, 2017).
---------------------------------------------------------------------------
B. Purpose of This Action
The purpose of today's action is to propose that financial
responsibility requirements under CERCLA Section 108(b) at facilities
in the Petroleum and Coal Products Manufacturing industry are not
necessary, and to solicit comments on this proposal. EPA has reached
this conclusion based on the analyses described in Parts VI and VII of
this proposal. The evidence provided in these analyses contributed to
EPA's proposed finding that the degree and duration of risk posed by
the Petroleum and Coal Products Manufacturing industry does not warrant
financial responsibility requirements under CERCLA Section 108(b).
The analysis and proposed finding in this proposal are not
applicable to and do not affect, limit, or restrict EPA's authority (1)
to take a response action or enforcement action under CERCLA with
respect to any facility in the Petroleum and Coal Products
Manufacturing industry, including any currently operating facilities or
those described in this proposal and in the background documents for
this proposal, and (2) to include requirements for financial
responsibility as part of such response action. The set of facts in the
rulemaking record related to the individual facilities discussed in
this proposed rulemaking support the Agency's proposal not to issue
financial responsibility requirements under Section 108(b) for this
class. At the same time, a different set of facts could demonstrate a
need for a CERCLA response action at an individual site. This proposed
rulemaking also does not affect the Agency's authority under other
authorities that may apply to individual facilities, such as the Clean
Air Act (CAA), the Clean Water Act (CWA), the Resource Conservation and
Recovery Act (RCRA), and the Toxic Substances Control Act (TSCA).
C. Summary of the Major Provisions of the Regulatory Action
EPA is proposing to not require evidence of financial
responsibility under CERCLA Section 108(b) at facilities in the
Petroleum and Coal Products Manufacturing industry. Thus, there are no
proposed regulatory provisions associated with this action.
D. Costs and Benefits of the Regulatory Action
EPA is proposing to not require evidence of financial
responsibility under CERCLA Section 108(b) at facilities in the
Petroleum and Coal Products Manufacturing industry. EPA, therefore, has
not conducted a Regulatory Impact Analysis for this action.
II. Authority
This proposed rule is issued under the authority of Sections 101,
104, 108 and 115 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. 9601,
9604, 9608 and 9615, and Executive Order 12580 (52 FR 2923, January 29,
1987).
III. Background Information
A. Overview of Section 108(b) and Other CERCLA Provisions
CERCLA, as amended by the Superfund Amendments and Reauthorization
Act of 1986 (SARA), establishes a comprehensive environmental response
and cleanup program. Generally, CERCLA authorizes EPA \4\ to undertake
removal or remedial actions in response to any release or threatened
release into the environment of ``hazardous substances'' or, in some
circumstances, any other ``pollutant or contaminant.'' As defined in
CERCLA Section 101, removal actions include actions to ``prevent,
minimize, or mitigate damage to the public health or welfare or to the
environment,'' and remedial actions are ``actions consistent with [a]
permanent remedy[.]'' Remedial and removal actions are jointly referred
to as ``response actions.'' CERCLA Section 111 authorizes the use of
the Hazardous Substance Superfund established under title 26, United
States Code, to finance response actions undertaken by EPA. In
addition, CERCLA Section 106 gives EPA \5\ authority to compel action
by liable parties in response to a release or threatened release of a
hazardous substance that may pose an ``imminent and substantial
endangerment'' to public health or welfare or the environment.
---------------------------------------------------------------------------
\4\ Although Congress conferred the authority for administering
CERCLA on the President, most of that authority has since been
delegated to EPA. See Exec. Order No. 12580, 52 FR 2923 (Jan. 23,
1987). The executive order also delegates to other Federal agencies
specified CERCLA response authorities at certain facilities under
those agencies' ``jurisdiction, custody or control.''
\5\ CERCLA Sections 106 authority is also delegated to other
Federal agencies in certain circumstances. See Exec. Order No.
13016, 61 FR 45871 (Aug. 28, 1996).
---------------------------------------------------------------------------
CERCLA Section 107 imposes liability for response costs on a
variety of parties, including certain past owners and operators,
current owners and operators, and certain generators, arrangers, and
transporters of hazardous substances. Such parties are liable for
certain costs and damages, including all costs of removal or remedial
action incurred by the Federal Government, so long as the costs
incurred are ``not inconsistent with the national contingency plan''
(the National Oil and Hazardous Substances Pollution Contingency Plan
or NCP).\6\ Section 107 also imposes liability for natural resource
damages and health assessment costs.\7\
---------------------------------------------------------------------------
\6\ CERCLA Section 107(a)(4)(A).
\7\ CERCLA Section 107(a)(4)(C)-(D).
---------------------------------------------------------------------------
Section 108(b) establishes authority to require owners and
operators of classes of facilities to establish and maintain evidence
of financial responsibility. Section 108(b)(1) directs EPA to develop
regulations requiring owners and operators of facilities to establish
evidence of financial responsibility ``consistent with the degree and
duration of risk associated with the production, transportation,
treatment, storage, or disposal of hazardous substances.'' In turn,
Section 108(b)(2) directs that the level of financial responsibility
shall be initially established, and, when necessary, adjusted, to
protect against the level of risk that EPA in its discretion believes
is appropriate based on the payment experience of the Fund, commercial
insurers, court settlements and judgments, and voluntary claims
satisfaction. Section 108(b)(2) does not, however, preclude EPA from
considering other factors in addition to those specifically listed. The
statute
[[Page 70470]]
prohibited promulgation of such regulations before December 1985.
In addition, Section 108(b)(1) provides for publication within
three years of the date of enactment of CERCLA of a ``priority notice''
identifying the classes of facilities for which EPA would first develop
financial responsibility requirements. It also directs that priority in
the development of requirements shall be accorded to those classes of
facilities, owners, and operators that present the highest level of
risk of injury.
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of Facilities for
Development of CERCLA Section 108(b) Financial Responsibility
Requirements
On March 11, 2008, Sierra Club, Great Basin Resource Watch, Amigos
Bravos, and Idaho Conservation League filed suit in the U.S. District
Court for the Northern District of California against then EPA
Administrator Stephen Johnson and then Secretary of the U.S. Department
of Transportation Mary E. Peters. Sierra Club, et al. v. Johnson, No.
08-01409 (N. D. Cal.). On February 25, 2009, that court ordered EPA to
publish the Priority Notice required by CERCLA Section 108(b)(1) later
that year. The 2009 Priority Notice and supporting documentation
presented the Agency's conclusion that hardrock mining facilities would
be the first class of facilities for which EPA would issue CERCLA
Section 108(b) requirements.\8\ Additionally, the 2009 Priority Notice
stated EPA's view that classes of facilities outside of the hardrock
mining industry may warrant the development of financial responsibility
requirements.\9\ The Agency committed to gather and analyze data on
additional classes of facilities and to consider them for possible
regulation. The court later dismissed the remaining claims.
---------------------------------------------------------------------------
\8\ 74 FR 37214 (July 28, 2009).
\9\ Id. at 37218.
---------------------------------------------------------------------------
2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
On January 6, 2010, EPA published an Advance Notice of Proposed
Rulemaking (ANPRM) \10\ in which the Agency identified three additional
industrial sectors for the development, as necessary, of proposed
Section 108(b) regulation. To develop the list of additional classes
for the 2010 ANPRM, EPA used information from the CERCLA National
Priorities List (NPL) and analyzed data from the RCRA Biennial Report
(BR) and the Toxics Release Inventory (TRI).
---------------------------------------------------------------------------
\10\ 75 FR 816 (Jan. 6, 2010).
---------------------------------------------------------------------------
EPA specifically requested public comment in the 2010 ANPRM on
whether to propose a regulation under CERCLA Section 108(b) for each of
the three industries, or any class or classes within those industries,
including information demonstrating why such financial responsibility
requirements would or would not be appropriate for those particular
classes. In addition, the Agency requested information related to the
industry categories discussed in the ANPRM, including data on facility
operations, information on past and expected future environmental
response actions, use of financial responsibility mechanisms by the
industry categories, existing financial responsibility requirements,
and other information the Agency might consider in setting financial
responsibility levels. Finally, EPA requested information from the
insurance and financial sectors related to instrument availability and
implementation and to potential instrument conditions.\11\ Comments
received on the ANPRM are summarized in the Additional Classes 2017
Notice of Intent to Proceed with Rulemakings, section III.B.4 below.
---------------------------------------------------------------------------
\11\ 75 FR 816, 830-831 (Jan. 6, 2010).
---------------------------------------------------------------------------
3. 2014 Petition for Writ of Mandamus
In August 2014, the Idaho Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a
Better Environment filed a new lawsuit in the U.S. Court of Appeals for
the District of Columbia Circuit, seeking a writ of mandamus requiring
issuance of CERCLA Section 108(b) financial assurance rules for the
hardrock mining industry and for three other industries: Chemical
manufacturing; petroleum and coal products manufacturing; and electric
power generation, transmission, and distribution. Thirteen companies
and organizations representing business interests in the hardrock
mining and other sectors sought to intervene in the case.
Following oral argument, the court issued an Order in May 2015
requiring the parties to submit, among other things, supplemental
submissions addressing a schedule for further administrative
proceedings under CERCLA Section 108(b). Petitioners and EPA requested
an Order from the court with a schedule calling for the Agency to sign
a proposed rule for the hardrock mining industry by December 1, 2016,
and a final rule by December 1, 2017. The joint motion also included a
requested schedule for the additional industry classes, which called
for EPA to sign by December 1, 2016, a determination on whether EPA
would issue a notice of proposed rulemaking for classes of facilities
in any or all of the other industries, and a schedule for proposed and
final rules for the additional industry classes as follows:
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the first additional industry by July 2,
2019, and sign for publication in the Federal Register a notice of
its final action by December 2, 2020.
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the second additional industry by December
4, 2019, and sign for publication in the Federal Register a notice
of its final action by December 1, 2021.
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the third additional industry by December
1, 2022, and sign for publication in the Federal Register a notice
of its final action by December 4, 2024.\12\
---------------------------------------------------------------------------
\12\ In Re: Idaho Conservation League, No. 14-1149 (D.C. Cir.
Jan. 29, 2016) (order granting joint motion).
While the joint motion identified the three additional industries
as the Chemical Manufacturing industry, the Petroleum and Coal Products
Manufacturing industry, and the Electric Power Generation, Transmission
and Distribution industry, and set a rulemaking schedule, the motion
did not indicate which industry would be the first, second or third.
The Joint Motion specified that it did not alter the Agency's
discretion as provided by CERCLA and administrative law.\13\
---------------------------------------------------------------------------
\13\ See Joint Motion at 6 (``Nothing in this Joint Motion
should be construed to limit or modify the discretion accorded EPA
by CERCLA or the general principles of administrative law'').
---------------------------------------------------------------------------
On January 29, 2016, the court granted the joint motion and issued
an order that mirrored the submitted schedule in substance. The order
did not mandate any specific outcome of the rulemakings.\14\ The order
can be found in the docket for this rulemaking. The signing of this
proposed rule by December 4, 2019, will satisfy one component of the
order.
---------------------------------------------------------------------------
\14\ In granting the Joint Motion, the court expressly stated
that its Order ``merely requires that EPA conduct a rulemaking and
then decide whether to promulgate a new rule--the content of which
is not in any way dictated by the [Order].'' In re Idaho
Conservation League, at 17 (quoting Defenders of Wildlife v.
Perciasepe, 714 F.3d 1317, 1324 (D.C. Cir. 2013).
---------------------------------------------------------------------------
4. Additional Classes 2017 Notice of Intent To Proceed With Rulemakings
Consistent with the January 2016 court order, EPA signed on
December 1, 2016, a determination regarding
[[Page 70471]]
rulemakings for the additional classes--a Notice of Intent to Proceed
with Rulemakings for all three of the classes. The notice was published
in the Federal Register on January 11, 2017.\15\
---------------------------------------------------------------------------
\15\ 82 FR 3512 (Jan. 11, 2017).
---------------------------------------------------------------------------
The notice formally announced EPA's intention to move forward with
the regulatory process and to publish a notice of proposed rulemaking
for classes of facilities within the three industries identified in the
2010 ANPRM. The announcement in the notice was not a determination that
requirements were necessary for any or all of the classes of facilities
within the three industries, or that EPA would propose such
requirements. In addition, the notice gave an overview of some of the
comments received on the 2010 ANPRM and initial responses to those
comments. The comments on the ANPRM which specifically addressed the
need for CERCLA Section 108(b) regulation for the three additional
classes fell into four categories: (1) Other laws with which the
industry complies that obviate the need for CERCLA Section 108(b)
regulation; (2) the sources of data that EPA used to select the
industries; (3) past versus current practices within each industry; and
(4) the overall need for financial responsibility for each industry. In
discussing the ANPRM comments in the 2017 notice, the Agency stated its
intent to use other, more industry-specific and more current sources of
data to identify risk; to consider site factors that reduce risks,
including those that result from compliance with other regulatory
requirements; and to develop a regulatory proposal for each rulemaking.
At the time of the 2017 notice, EPA had not identified sufficient
evidence to determine that the rulemaking process was not warranted,
nor had EPA identified sufficient evidence to establish CERCLA Section
108(b) requirements. The notice described a process to gather and
analyze additional information to support the Agency's ultimate
decision, including further evaluation of the classes of facilities
within the three industry sectors. The notice stated that EPA would
decide whether proposing requirements was necessary and, accordingly,
that EPA would propose appropriate requirements or would propose not to
impose requirements.
5. CERCLA Section 108(b) Proposal for Facilities in the Electric Power
Generation, Transmission, and Distribution Industry
On July 29, 2019, EPA published a notice of proposed rulemaking on
the first of the three additional industries. In that notice, the
Agency proposed to not impose financial responsibility requirements for
the Electric Power Generation, Transmission, and Distribution industry
and described the analyses and results that were used to reach that
decision. The court's January 2016 order requires that a final action
on the first additional industry be signed by December 2, 2020.\16\
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\16\ 84 FR 36535 (Jul. 29, 2019).
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IV. Statutory Interpretation
CERCLA Section 108(b) provides general instructions on how to
determine what financial responsibility requirements to impose for a
particular class of facility. Section 108(b)(1) directs EPA to develop
regulations requiring owners and operators of facilities to establish
evidence of financial responsibility ``consistent with the degree and
duration of risk associated with the production, transportation,
treatment, storage, or disposal of hazardous substances.'' Section
108(b)(2) directs that the ``level of financial responsibility shall be
initially established and, when necessary, adjusted to protect against
the level of risk'' that EPA ``believes is appropriate based on the
payment experience of the Fund, commercial insurers, court settlements
and judgments, and voluntary claims satisfaction.'' EPA interprets the
risk to be addressed by financial assurance under Section 108(b) to be
the risk of the need for taxpayer financed response actions. Read
together, the statutory language on determining the degree and duration
of risk and on setting the level of financial responsibility confers a
significant amount of discretion on EPA.
Section 108(b)(1) directs EPA to evaluate risk from a selected
class of facilities, but it does not suggest that a precise calculation
of risk is either necessary or feasible. Although the cost of response
associated with a particular site can be ascertained only once a
response action is required, any financial responsibility requirements
imposed under Section 108(b) would be imposed before any such response
action was identified. The statute thus necessarily confers on EPA wide
latitude to determine, in a Section 108(b) rulemaking proceeding, what
degree and duration of risk are presented by the identified class.
Section 108(b)(2) in turn directs that EPA establish the level of
financial responsibility that EPA in its discretion believes is
appropriate to protect against the risk. This statutory direction does
not specify a methodology for the evaluation. Rather, this decision is
committed to the discretion of the EPA Administrator. While the statute
provides a list of information sources on which EPA is to base its
decision--the payment experience of the Superfund, commercial insurers,
court settlements and judgments, and voluntary claims satisfaction--the
statute does not indicate that this list of factors is exclusive, nor
does it specify how the information from these sources is to be used,
such as by indicating how these categories are to be weighted relative
to one another.
EPA believes that Sections 108(b)(1) and (b)(2) are sufficiently
interrelated that it is appropriate to evaluate the degree and duration
of risk under paragraph (b)(1) by considering the factors enumerated in
paragraph (b)(2). EPA therefore concludes that Congress intended the
risk associated with a particular class of facilities to mean the risk
of future Fund-financed cleanup actions in that industry. This reading
is supported by the structure of the statute, as Section 108(b) appears
between two provisions related to cost recovery. Section 108(a),
concerning financial assurance requirements for certain vessels, refers
specifically to cleanup costs. And Section 108(c), concerning recovery
of costs from guarantors who provide the financial responsibility
instruments, refers specifically to liability for cleanup costs. EPA
thus reads ``risk'' in Section 108(b) consistent with its meaning in
Sections 108(a) and (c); that is, the risk of Fund-financed cleanup.
EPA adopted this interpretation in assessing the need for financial
responsibility requirements under CERCLA Section 108(b) for facilities
in the first class of facilities it evaluated: The hardrock mining
industry.\17\ In its opinion deciding the challenge to EPA's Final
Action for the hardrock mining industry, the U.S. Court of Appeals for
the District of Columbia Circuit held that EPA's interpretation--that
the provisions of Section 108(b) ``relate only to ensuring against
financial risks associated with cleanup costs''--is reasonable and
entitled to deference.\18\
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\17\ 83 FR 7556, 7561-62 (Feb. 21, 2018).
\18\ Idaho Conservation League v. Wheeler, No. 18-1141, slip op.
at 12 (DC Cir. July 19, 2019).
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For the Petroleum and Coal Products Manufacturing industry, EPA has
investigated the payment history of the Fund, and enforcement
settlements and judgments, to evaluate, in the context of this CERCLA
Section 108(b) rulemaking, the risk of a Fund-financed response action
at facilities that would be subject to CERCLA financial responsibility
[[Page 70472]]
requirements. The statute also authorizes EPA to consider the existence
of Federal and state regulatory requirements, including any financial
responsibility requirements. Section 108(b)(1) directs EPA to
promulgate financial responsibility requirements ``in addition to those
under subtitle C of the Solid Waste Disposal Act and other Federal
law.'' According to the 1980 Senate Report on legislation that was
later enacted as CERCLA, Congress considered it appropriate for EPA to
examine those additional requirements when evaluating the degree and
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duration of risk under what was later enacted as CERCLA Section 108(b):
``The bill requires also that facilities maintain evidence of
financial responsibility consistent with the degree and duration of
risks associated with the production, transportation, treatment,
storage, and disposal of hazardous substances. These requirements
are in addition to the financial responsibility requirements
promulgated under the authority of Section 3004(6) of the Solid
Waste Disposal Act. It is not the intention of the Committee that
operators of facilities covered by Section 3004(6) of that Act be
subject to two financial responsibility requirements for the same
dangers.\19\
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\19\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.
While the Senate Report mentions RCRA Section 3004(6) specifically,
it is consistent with congressional intent for EPA to consider other
potentially duplicative Federal financial responsibility requirements
when examining the ``degree and duration of risk'' in the context of
CERCLA Section 108(b) to determine whether and what financial
responsibility requirements are appropriate. It is also consistent with
congressional intent for EPA to consider state laws before imposing
additional Federal financial responsibility requirements.
Consideration of state laws before developing financial
responsibility regulations is consistent with CERCLA Section 114(d),
which prevents states from imposing financial responsibility
requirements for liability for releases of the same hazardous
substances after a facility is regulated under Section 108 of CERCLA.
Just as Congress intended to prevent states from imposing duplicative
financial assurance requirements after EPA had acted to impose such
requirements under Section 108, it is reasonable to also conclude that
Congress did not mean for EPA to disrupt existing state programs that
are successfully regulating industrial operations to minimize risk,
including the risk of taxpayer liability for response actions under
CERCLA, and that specifically include appropriate financial assurance
requirements under state law. Reviews of both state programs and other
Federal programs help to identify whether and at what level there is
current risk that is appropriate to address under CERCLA Section 108.
EPA also believes that, when evaluating whether and at what level
it is appropriate to require evidence of financial responsibility, EPA
should examine information on Petroleum and Coal Products Manufacturing
facilities operating under modern conditions. In other words, EPA
should assess the types of facilities to which any new financial
responsibility regulations would apply. Financial responsibility
requirements under Section 108(b) would not apply to legacy operations
that are no longer operating. Rather, any requirements would apply to
facilities that follow current industry practices and are subject to
the modern regulatory framework (i.e., the regulations currently in
place that apply to this industry). These modern conditions include
state and Federal regulatory requirements and financial responsibility
requirements that currently apply to operating facilities. This reading
of Section 108(b) is consistent with statements in the legislative
history of the statute. The 1980 Senate Report states that the
legislative language that became Section 108(b) ``requires those
engaged in businesses involving hazardous substances to maintain
evidence of financial responsibility commensurate with the risk which
they present.'' \20\ This approach is also consistent with the analysis
that EPA undertook in developing its Final Action on Financial
Responsibility Requirements Under CERCLA Section 108(b) for Classes of
Facilities in the Hardrock Mining Industry.\21\ EPA's approach was
recently upheld by the U.S. Court of Appeals for the District of
Columbia Circuit.\22\
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\20\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.
\21\ 83 FR 7556 (Feb. 21, 2018).
\22\ Idaho Conservation League v. Wheeler, No. 18-1141 (D.C.
Cir. July 19, 2019).
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This statutory interpretation is reflected in today's proposal. Any
financial responsibility requirements imposed under Section 108(b)
would apply to currently operating facilities. EPA thus sought to
examine the extent to which hazardous substance management at currently
operating Petroleum and Coal Products Manufacturing facilities as a
class continues to present risk. Moreover, the statutory direction to
identify requirements consistent with identified risks guides EPA's
interpretation that imposition of financial responsibility requirements
under Section 108(b) would not be necessary for currently operating
facilities that present minimal current risk of a Fund-financed
response action. The interpretation in this proposal does not extend to
any site-specific determinations of risk made in the context of
individual CERCLA site responses. Those decisions will continue to be
made in accordance with preexisting procedures.
EPA thus examined records of releases of hazardous substances from
facilities operating under a current regulatory framework and data on
the actions taken and expenditures incurred in response to such
releases. The data collected do not reflect historical practices, many
of which would be illegal under current environmental laws and
regulations. Instead, EPA has considered current Federal and state
regulation of hazardous substance production, transportation,
treatment, storage, or disposal applicable to facilities in the
Petroleum and Coal Products Manufacturing industry.
V. Approach To Developing This Proposed Rule
Based on the statutory interpretation described above, EPA
developed an analytical approach to determine whether the current risk
under the modern regulatory framework within the Petroleum and Coal
Products Manufacturing industry rises to the level that warrants
imposition of financial responsibility requirements under CERCLA
Section 108(b). Specifically, EPA designed the analytical approach to
determine the need for financial responsibility for this industry based
on the degree and duration of risk of a Fund-financed response action
associated with the industry's production, transportation, treatment,
storage, or disposal of hazardous substances.
The approach, described in detail below, looks at risks by
examining records of releases of hazardous substances from facilities
in the industry in combination with the payment history of the Fund and
enforcement settlements and judgments. To enable EPA to base its
decision on risk posed by facilities operating under modern conditions,
i.e., the types of facilities to which financial responsibility
requirements would apply, EPA developed an approach to identify and
consider relevant state and Federal regulatory requirements and
financial responsibility requirements that currently apply to operating
facilities, as well as voluntary protective practices.
[[Page 70473]]
EPA sought to determine the level of risk of a Fund-financed
response action at current Petroleum and Coal Products Manufacturing
operations. Relevant to this decision are requirements of existing
regulatory programs and voluntary practices, including existing
financial responsibility requirements, which can reduce costs to the
taxpayer; EPA's experience with clean-ups in the Petroleum and Coal
Products Manufacturing industry; and enforcement actions, which may
reduce the need for Federally-financed response action at facilities in
the Petroleum and Coal Products Manufacturing industry.
As part of scoping the Petroleum and Coal Products Manufacturing
industry for this proposal, EPA sought to understand general
characteristics of the industry that may be relevant to financial
responsibility under Section 108(b). To do this, EPA compiled industry
features, including the types of activities undertaken and wastes
handled or produced. Additionally, EPA looked at the financial
condition of the industry to assess the ability of facilities in this
class to pay for any environmental obligations they may incur.
Discussion of these aspects of the industry is included in section VI
of this proposal.
Section VII.A describes EPA's evaluation of cleanup cases at
facilities in the Petroleum and Coal Products Manufacturing industry.
So-called ``cleanup cases'' are sites in the Petroleum and Coal
Products Manufacturing industry where releases and cleanup actions
occurred. To perform this evaluation, EPA developed an analytic
approach that considered cleanup cases to identify risk at currently
operating facilities and where taxpayer funds were expended for
response action. EPA first examined each site to determine the nature
and timing of release. EPA used this information to determine if
releases occurred under current regulations. As an initial screen,
releases that occurred prior to 1980 were deemed to be legacy releases
that occurred before the advent of the modern environmental regulatory
framework and were therefore screened out of our analysis. Once EPA
identified those sites with more recent releases occurring under a
modern regulatory framework, EPA then focused on those response actions
that were paid for by the taxpayer by looking at those sites with Fund-
financed cleanup activity.
As described in section VII.B, to understand the modern regulatory
framework applicable to currently operating facilities within the
Petroleum and Coal Products Manufacturing industry, EPA compiled
applicable Federal and state regulations. Specifically, EPA looked to
regulations that address the types of releases identified in the
cleanup cases. This review also considered industry voluntary programs
that could reduce risk of releases. EPA also identified financial
responsibility regulations that apply to facilities in the Petroleum
and Coal Products Manufacturing industry in section VII.C, and
compliance and enforcement history for the relevant regulations in
section VII.D.
EPA considered payments from commercial insurers as well, but
determined that it was not necessary to conduct a detailed analysis of
this potential information source in light of the analyses of cleanup
cases and enforcement data. The cleanup cases and enforcement data, in
addition to addressing the payment experience of the Fund, court
settlements and judgments, and voluntary claims satisfaction, also
encompass amounts from commercial insurance payments. For example, at
one of the Petroleum and Coal Products Manufacturing sites identified
and reviewed, EPA recovered funds from the potentially responsible
party's (PRP's) commercial insurers in two separate settlements.
Furthermore, payments from commercial insurers may have helped finance
the work conducted by PRPs in the cleanup cases identified or may have
been included in settlements, judgments, or enforcement cases
identified by EPA. However, in the event there were significant
payments from commercial insurers associated with facilities in the
Petroleum and Coal Products Manufacturing industry that were not
already indirectly captured, this information would neither indicate
greater risk to the Fund nor suggest a need for financial
responsibility requirements under CERCLA Section 108(b).
In considering how to structure its analysis and what data sources
to examine, EPA reviewed prior analysis done for selection of industry
classes in the 2010 ANPRM and public comments responding to EPA's
approach. In the public comment period for the ANPRM, EPA received a
total of 67 comments from 30 commenters on the Chemical Manufacturing
industry, Petroleum and Coal Products Manufacturing industry, and the
Electric Power Generation, Transmission, and Distribution industry. In
addition, EPA received five comments to the hardrock mining proposed
rule that were related to the additional classes of facilities.
EPA received comments from the American Petroleum Institute, the
National Petrochemical & Refiners Association, and the American Coke
and Coal Chemicals Institute, as well as individual refineries.
Commenters indicated that EPA should concentrate on current practices
and not legacy contamination. Commenters also said that EPA should not
impose financial responsibility requirements on facilities that are
already subject to other Federal laws. One commenter stated that EPA
should not include waste oil recycling sites, and that oil refineries
and coke production facilities should be analyzed independently from
each other. Lastly, many commenters believe that EPA placed too much
emphasis on TRI data and RCRA BR data and expressed their opinions that
these data sources are not designed or intended to provide risk-based
information.
In its 2017 Notice of Intent to Proceed with Rulemakings,\23\ EPA
acknowledged limitations on information that can be gained from TRI and
BR data and announced its intention to use industry-specific and
current sources of data to identify risk for the purposes of the
rulemakings. EPA also analyzed those limitations in the Final Action
for the hardrock mining industry.\24\ Accordingly, in the analysis
conducted to assess risk in the Petroleum and Coal Products
Manufacturing industry for this action, EPA chose not to rely on TRI
and BR data. While, at the time of the 2010 ANPRM, the Agency found
those data sources appropriate for identifying classes of facilities to
examine further, the Agency does not find the data sources valuable for
assessing current risk of a Fund-financed response action in the
industry.
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\23\ 82 FR 3512 (Jan. 11, 2017).
\24\ 83 FR 7570 (Feb. 21, 2018).
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VI. Petroleum and Coal Products Manufacturing Industry Overview
A. Identification of Petroleum and Coal Products Manufacturing Industry
For this proposal and the associated analyses, EPA reviewed
facilities classified under the North American Industry Classification
System (NAICS) code 324. The most recent available census data lists
the size of the industry at 2,167 establishments nationally.\25\ The
Petroleum and Coal Products Manufacturing industry is based on the
transformation of crude petroleum and coal into usable products. The
dominant process, as measured by the value of shipments, is petroleum
refining, which involves the separation of crude petroleum into
component products through such techniques as cracking
[[Page 70474]]
and distillation. As of 2018, there were 135 operating petroleum
refineries in the U.S. In 2000, there were 155, indicating that at
least 20 refineries have closed since the year 2000.\26\ In addition,
this industry includes establishments that primarily further process
refined petroleum and coal products to produce products, such as
asphalt, asphalt roofing materials, coke from coal, and petroleum
lubricating oils.
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\25\ 2016 Economic Census of the United States, NAICS 324.
\26\ CERCLA 108(b) Economic Sector Profile: Petroleum and Coal
Products Manufacturing Industry.
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B. Current Industry Practices
Operational and decommissioning practices in industrial sectors and
their associated firms can ultimately affect the ability of individual
firms to responsibly minimize their impact on human health and the
environment. To consider the potential for releases as part of its
decision making, EPA prepared a high-level review of industry practices
and the environmental profile of the Petroleum and Coal Product
Manufacturing industry, which includes a summary of relevant
operational and decommissioning materials and wastes in a background
document, which is available in the docket for this rulemaking.\27\
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\27\ Petroleum and Coal Products Manufacturing Industry
Practices and Environmental Characterization.
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Potentially hazardous materials are frequently used in this
industry. These materials can include sandblast media, fuels, paints,
spent vehicle and equipment fluids (e.g., lubricating oils, hydraulic
fluids, battery electrolytes, glycol coolants), among others. Known
hazardous materials may include, but are not limited to, asbestos or
mercury containing materials, compressed gases, dielectric fluids,
boiler bottom ash, and oils. Process fluids can be either hazardous or
non-hazardous, and can include oily water, spent solvents, chemical
cleaning rinses, cooling water, wash and makeup water, sump and floor
discharges, oily water separator fluids, boiler blowdown, and
acids.\28\ Other materials beyond those listed here may be used in the
operation of Petroleum and Coal Product Manufacturing facilities.
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\28\ EPA 310-R-95-013 Refinery Sector notebook.
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Facilities in this industry generate significant amounts of
hazardous waste,\29\ including but not limited to, primary and
secondary sludges, spent catalysts, filter clays and cakes, sour water,
heavy ends (distillation bottoms), dissolved air/nitrogen flotation,
flotation debris, waste soils, oily sludge, tank bottom sludge,
clarified slurry oil, slop oil emulsion solids, spent lime, storm water
silt, catalyst and coke fines, and tank bottoms. Additionally,
insulating materials (such as asbestos) that are hazardous substances
must also be managed properly.
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\29\ According to the 2017 Hazardous Waste Report, facilities in
this sector reported the generation of 5.6 million tons of hazardous
waste. https://rcrapublic.epa.gov/rcrainfoweb/action/modules/br/naics.
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Industry practices in certain subsectors, the Petroleum Refineries
(324110), and Other Petroleum and Coal Products Manufacturing (32419),
of the Petroleum and Coal Products Manufacturing industry use more
hazardous substances and/or generate larger volumes of hazardous waste
than the Asphalt Paving, Roofing and Saturated Material Manufacturing
(32412), which uses and generates smaller amounts of hazardous
substances or wastes. Further information on industry practices is
provided in the background document for this section, which is
available in the docket for this rulemaking.\30\
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\30\ Petroleum and Coal Products Manufacturing Industry
Practices and Environmental Characterization.
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Sites contaminated by the industry typically contain a wide variety
of contaminants, including but not limited to toxic organics, such as
benzene, polychlorinated biphenyls (PCBs), phenol, and volatile organic
hydrocarbons (VOCs); and heavy metals, such as barium, cadmium,
chromium, copper, lead, selenium, and zinc. Other substances beyond
those listed here may also have been released. In terms of sources of
contamination, improper landfill/land disposal issues, as well as
contaminated soils resulting from process activities, have been the
most common sources at contaminated sites. Other examples of sources of
contamination included abandoned units/materials and improper
wastewater management.
As outlined in the ANPRM, because refineries tend to be operated
for decades, there is a long timeframe for potential releases and
exposure of hazardous substances to occur. In addition, because of
their need for large amounts of cooling water for operations,
refineries tend to be located near navigable waterways or on the
seashore, which likely increases the potential to impact groundwater,
surface water, aquatic biota, and aquatic vegetation. Other impacts to
terrestrial vegetation, wetlands, wildlife, soils, air, cultural
resources, and humans that use these resources recreationally or for
subsistence also are likely.\31\
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\31\ 75 FR 826 (Jan. 6, 2010).
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Contamination of soils from the petroleum refining processes is
generally less significant relative to the contamination of water
resources.\32\ While soil contamination can occur from leaks or spills
of spent catalysts or coke dust, tank bottoms, or sludges from the
treatment processes, many of the residuals produced during the refining
processes are typically recycled through other stages in the process,
or collected and disposed of in landfills. Or they may be recovered by
other facilities.
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\32\ https://cfpub.epa.gov/ncer_abstracts/index.cfm/fuseaction/display.files/fileID/14522.
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Potential impacts to human health and the environment may include
large spills that not only contaminate soil and water but may also
cause devastating explosions and fires. The consequences and associated
releases from refinery accidents can be significant. To ensure
immediate responses and to prevent or reduce the likelihood of such
incidents, the industry is subject to several Federal regulations and
enforcement oversight under various statutes, as discussed in Sections
VII.B. and VII.D. below.
C. Industry Economic Profile
Economic trends and financial health in industrial sectors and
their associated firms can ultimately affect the ability of individual
firms to responsibly address their environmental liabilities.
Circumstances in which firms face financial stress can potentially
contribute to the abandonment of facilities and the creation of orphan
waste sites requiring cleanup. To consider the potential for firms to
default on their financial obligations, EPA prepared a high-level
economic profile of the Petroleum and Coal Products Manufacturing
industry, which includes a summary of relevant financial metrics,
industry default statistics and trends, and a broad discussion
outlining environmental liabilities under Chapter 11 of the Bankruptcy
Code. This analysis, summarized in this section, looked at the industry
as a whole and additionally focused on two subsectors individually,
providing an industry profile, evaluation of the potential universe of
regulated entities, and discussion of the subsector's financial health
and relative volatility. The full analysis is found in the background
document for this section and is available in the docket for this
rulemaking.\33\
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\33\ CERCLA 108(b) Economic Sector Profile: Petroleum and Coal
Products Manufacturing Industry.
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Generally, this analysis found the sector to be in a relatively
stable financial position with low default risk. Firms in the industry
maintain healthy
[[Page 70475]]
credit scores and reasonable levels of debt relative to assets. The
report did note that despite a generally healthy financial outlook,
intrinsic market volatility due to exogenous factors (e.g.,
geopolitical unrest) and supply and demand shocks poses an ongoing
threat to stability. The report also notes that firms generally remain
liable for environmental compliance obligations under Chapter 11 debt
restructuring. Sections 101(5) and 1141(d) of the Bankruptcy Code only
provide for a discharge of monetary rights to payment and not for
compliance obligations where the Federal government has not sought the
payment of money. This may serve to temper the impact to the Fund of
potential future volatility.
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
As described in the Approach to Developing the Proposed Rule,
Section V above, to evaluate the need for financial responsibility
regulations in the Petroleum and Coal Products Manufacturing industry,
EPA sought examples of pollution that occurred under a modern
regulatory framework and that required a taxpayer-funded CERCLA
cleanup. In its evaluation, EPA focused first on identifying response
actions at Superfund National Priorities List (NPL) sites and sites
using the Superfund Alternative Approach (SAA),\34\ as those are
generally larger cleanups both in terms of amounts of contaminants
removed and in terms of costs to carry out these cleanups. EPA also
looked at Superfund removals at non-NPL sites.
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\34\ The Superfund Alternative Approach (SAA) uses the same
CERCLA authority and investigation and cleanup process and standards
that are used for NPL sites. The threshold criteria for using the
SAA are: (1) The site must have contamination significant enough to
make it eligible for listing on the NPL; (2) the site is anticipated
to need remedial action; and, (3) there must be a cooperative,
viable, capable PRP that will sign a CERCLA agreement with EPA to
perform the necessary cleanup.
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To identify the relevant cleanup cases in the Petroleum and Coal
Products Manufacturing industry, EPA included the NPL sites already
identified in the 2010 ANPRM,\35\ and supplemented the dataset with
additional NPL sites that had been identified since the ANPRM, sites
using the SAA, and non-NPL removal sites identified in EPA's Superfund
Enterprise Management System (SEMS) database. EPA collected information
on the timing and nature of releases or threatened releases at these
sites. Specifically, EPA sought to identify, as applicable, facility
operation end dates, release dates, sources of contamination, NPL
proposal dates, contaminated media, type of contaminant, cleanup lead,
and information on Superfund expenditures at the site, as well as other
information. For this collection, EPA relied on information previously
collected as part of the ANPRM, information available in Superfund site
documents (e.g. NPL listing narratives, Records of Decision, Action
Memos, Five-Year Reviews) and information in EPA's SEMS, as of March
2018. The cleanup case identification and site information collection
processes are described in greater detail in the relevant background
documents, which are available in the docket for this rulemaking.\36\
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\35\ 75 FR 816 (Jan.6, 2010).
\36\ Identification and Evaluation of CERCLA 108(b) National
Priorities List (NPL) and Superfund Alternative Approach (SAA)
Cleanup Case Sites Associated with the Petroleum and Coal Products
Manufacturing Industry and Identification and Evaluation of CERCLA
108(b) Petroleum and Coal Products Manufacturing Industry non-
National Priorities List (NPL) Removal Sites.
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After compiling information about the risks and history of each
site, EPA sought to identify instances in which releases occurred under
the modern regulatory framework that resulted in Fund-financed response
actions. To do so, EPA's methodology applied sequenced screens to the
identified sites. EPA first screened out any NPL sites or sites using
the SAA where the contaminant release or cleanup activity occurred
before 1980. EPA chose 1980 as the cutoff point to initially screen out
legacy contamination because it was the year when CERCLA was enacted,
as well as the date of the initial regulations under RCRA Subtitle C
governing the generation, treatment, storage, and disposal of hazardous
waste. EPA chose to give these significant RCRA and CERCLA milestones
the greatest consideration due to the large number of issues of waste
management, land disposal and soil contamination identified in the
review of the NPL and SAA cases. EPA believes the 1980 cutoff date is a
conservative screen (i.e., retains more sites in the analysis) in that
only the initial RCRA regulations were in place in 1980 and they were
refined, expanded and enhanced several times over the next decades.
Moreover, the Agency's enforcement authorities expanded in the 1980s as
the RCRA program matured. Notably, the passage of the Hazardous and
Solid Waste Amendments (HSWA) in 1984 resulted in many regulatory
changes and enhanced enforcement mechanisms. More specifically, HSWA
created the Land Disposal Restrictions (LDR) program, codified in 40
CFR part 268, which prohibits the land disposal of untreated hazardous
wastes. HSWA also substantially expanded corrective action authorities
for both permitted RCRA treatment, storage and disposal (TSD)
facilities and facilities operating under interim status,\37\ requiring
facilities to address the release of hazardous wastes and demonstrate
financial responsibility for completing the required corrective
actions, further reducing the risks that sites would have to be
addressed under CERCLA. For further detail on these requirements, see
section VII. B below.
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\37\ Interim status facilities are facilities that were in
existence on the effective date of the regulations and subject to
the requirement to have a RCRA permit. The standards for interim
status facilities are not as stringent as those for permitted
facilities.
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Next, EPA sought to remove from the analysis sites where
significant Fund expenditures had not occurred, because response
actions that were paid for by private parties do not support the need
for CERCLA Section 108(b) financial responsibility regulations. Using
the ``Action Lead'' field in SEMS associated with each site, EPA
screened out the potentially responsible party (PRP) lead sites. This
left only the Mixed Lead Construction or Government Performed
Construction sites in the analysis, under the assumption that PRP
Performed Construction \38\ sites did not present significant expenses
to the Fund.
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\38\ These terms are used in the SEMS database to identify the
party that had primary responsibility for construction at the sites.
---------------------------------------------------------------------------
EPA then reviewed the remaining sites (i.e., those with both
pollution dates of 1980 or later and Mixed Lead Construction or
Government Performed Construction designation in SEMS) individually in
greater detail. Specifically, EPA considered the site history and each
of the contamination sources at the site in the context of the
regulations that would be applicable to that facility today. More
information on the regulations EPA considered is available in Section
VII.B.
Findings from EPA's analysis of the cleanup cases are discussed
below, with more detailed information in background documents, which
are available in the docket for this rulemaking.\39\ These background
documents provide the list of sites identified and remaining at each
stage of the analysis, as well as the information considered in the
screening and review process.
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\39\ Identification and Evaluation of National Priorities List
(NPL) Sites and sites using the Superfund Alternative Approach (SAA)
Cleanup Cases in the Petroleum and Coal Products Manufacturing
Industry and Identification and Evaluation of CERCLA 108(b)
Petroleum and Coal Products Manufacturing non-National Priorities
List (NPL) Removal Sites.
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[[Page 70476]]
Using the data sources described above for the Petroleum and Coal
Products Manufacturing industry, EPA identified 34 NPL or SAA sites, as
well as 51 non-NPL CERCLA removal action sites \40\ to evaluate
according to the methodology described above. As described further
below, none of the contamination at NPL sites or sites using the SAA
were ultimately considered incidents that occurred under the modern
regulatory framework where significant taxpayer funds were relied upon.
For the removal sites, one of the 51 cases showed releases of hazardous
substances under a modern regulatory framework and required taxpayer
expenditures, as described below.
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\40\ None of the 51 removal sites are associated with an NPL
site. Removal actions that have taken place at NPL sites or sites
using the SAA, either before or after listing or designation, are
tracked in SEMS as NPL or SAA level actions and not as separate
removal records.
---------------------------------------------------------------------------
The 34 NPL and SAA sites evaluated include 23 petroleum refineries,
nine coke production facilities, and two sites with oil re-refining
and/or fuel blending operations. At these 34 sites, improper land
disposal was the most prevalent issue.
EPA applied the screens described above to remove any PRP-Performed
Construction sites, as well as any sites where the pollution occurred
pre-1980, to the 34 NPL and SAA sites. Eight sites remained after those
screens that were either Government Performed Construction or Mixed
Lead Construction (i.e., a combination of Government and PRP) sites and
had at least one source of pollution that arose in 1980 or later. To
assess those eight sites, EPA conducted a more detailed review to
compare the environmental issues (e.g., contamination) at the sites
against the regulations applicable today. Based on the detailed review,
EPA concluded that the pollution at six of the eight Petroleum and Coal
Products Manufacturing NPL sites reflect legacy practices. That is to
say that while the sites had at least one source of pollution that
arose in 1980 or later, the detailed review of the sites' histories
concluded that, for six of the eight sites, the pollution arose before
the RCRA Subtitle C program was fully in place.
Several of the sites had long operational histories pre-1980 that
contributed to a portion, if not all, of the pollution. Additionally,
at most of the sites it was evident that pollution arose prior to
HSWA's implementation. This is relevant because four of these sites had
land disposal issues, five of these sites had soil contamination
resulting from process activities, and four of these sites had
abandoned hazardous substances at their sites. These sites pre-dated
the enactment of expanded generator regulations, enhanced land disposal
unit technical standards, enhanced enforcement provisions (including
facility-wide corrective action), Land Disposal Restrictions, and the
Loss of Interim Status deadlines for compliance with groundwater
monitoring and financial assurance requirements at land disposal
facilities, and other protections afforded by HSWA that would have
mitigated these issues. Please see Appendix 4 of the background
document for an explanation of how the contamination at these six sites
would now be addressed by regulations in place today.\41\
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\41\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach (SAA)
in the Petroleum and Coal Products Manufacturing Industry.
---------------------------------------------------------------------------
Regarding the other two of the eight NPL sites that remained after
the screens, EPA's detailed review indicated that these sites may have
had releases under the modern regulatory framework. Both sites had
legacy land disposal issues, due primarily to improper disposal of
hazardous waste, which contributed significantly to the site's
requiring a CERCLA action. However, as detailed below, notwithstanding
a designation of mixed or government lead in SEMS, neither of these two
sites required a level of taxpayer expenditures high enough to warrant
imposing financial responsibility on the whole industry.
The sites, Indian Refinery--Texaco Lawrenceville in Illinois and
Koch Refining Co. in Minnesota, had Superfund expenditures to date of
$720,511 and $26,659 (2017 USD), respectively. At the Indian Refinery--
Texaco Lawrenceville site, which operated from 1907 to 1995, various
owners or operators performed cleanup work at the site starting as
early as 1983. EPA's primary involvement at the site was oversight of
two short-term cleanups, or removal actions, prior to the site's
listing on the NPL in 2000. Issues at the site primarily stemmed from a
waste disposal area where highly acidic refinery wastes (e.g., lube oil
filter clay sludge; acid sludge; and spent filter clays) were
improperly disposed. Waste at the site also migrated offsite, requiring
cleanup.
At the Koch Refining Co. site, Koch Refining, a Potentially
Responsible Party, signed a consent agreement with the State of
Minnesota for cleanup of the facility under RCRA authority in 1985.
Issues at the site included persistent seepages from ponds, lagoons,
and waste piles identified in 1972 as well as leaks, spills, and
discharges from active and inactive wastewater lagoons, process areas,
internal pipelines, and waste treatment areas identified in
investigations conducted between 1986 and 1988. In 1995, EPA deleted
the site from the National Priorities List, and determined that no
further action under the Superfund law was needed. The refinery at the
site is still in operation. The results of the NPL and SAA sites
analysis is presented in Table 1, below.
Table 1--Evaluation Results for NPL and SAA Sites in the Petroleum and Coal Products Manufacturing Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
Detailed review identified a Cases with release(s) under
Total NAICS 324 NPL & SAA Number of NAICS 324 NPL & SAA Detailed review concluded possible modern regulation modern regulation that
sites evaluated sites screened out based on release occurred prior to the release but no significant required taxpayer funded
pre-1980, or PRP lead status modern regulatory framework taxpayer expenditures response
--------------------------------------------------------------------------------------------------------------------------------------------------------
34 26 6 2 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additionally, EPA looked at the removal cases found in the SEMS
database to supplement this analysis. For this sector, EPA identified
51 non-NPL removal sites. Applying the same methodology as above, EPA
screened out 30 sites because the environmental releases occurred
before 1980 or PRPs led the response action. EPA also excluded an
additional 12 sites that were deemed outside the scope of this
rulemaking because the industrial
[[Page 70477]]
activities that resulted in release of hazardous substances were
neither petroleum refining nor coal products manufacturing. Four other
sites were left out of the analysis because of insufficient
documentation to fully conduct the evaluation (i.e., not enough to
verify whether the sites included pollution attributable to a NAICS 324
facility, or the nature/date of the releases at the site).
To assess the five sites that remained after those screens, EPA
first conducted a detailed review of case files to compare the
environmental issues at the sites to the regulations applicable today.
At two of the five removal sites (United Energy in Evanston, Indiana,
and Browns Island Emergency Response in Weirton, West Virginia), while
the environmental releases had occurred recently, EPA concluded that
they had resulted from legacy waste management practices. For instance,
at the United Energy site, the refinery operations ceased during the
1970s and the site was abandoned. Though long abandoned, the presence
of former tars pits and waste oil lagoons, PCB stained soil, and PCB
oils tanks at the site posed threats to public health and the
environment, resulting in EPA's removal response in 2012; total Fund
expenditure reported at this site was $583,000.\42\ Similarly, at the
Browns Island site, although operations at the former coke by-product
plant ceased in 1982, a release occurred in March 2008 when 300 gallons
of liquid organic chemicals (primarily naphthalene) that had been
stored in an abandoned tank leaked during demolition work. The current
owner reported the spill to the National Response Center (NRC) and
subsequently conducted the cleanup activity with EPA's oversight; total
Fund expenditure reported at this site was $6,700.
---------------------------------------------------------------------------
\42\ 2012 Action Memorandum--Request for Approval and Funding
for Removal Action at the United Energy Site, Spencer County,
Evanston, Indiana.
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At two other sites (St. Rose Air Assessment Site in St. Charles
Parish, Louisiana, and Benicia Valero Refinery in Benicia, California),
EPA concluded that the releases were caused by a one-time incident
(malfunctioning of sulfur removal equipment at the former and power
outage at the latter) which resulted in release of air pollutants
(e.g., sulfur dioxide, other organic vapors).43 44 Although
not designated as PRP-lead actions in the SEMS database, according to
EPA's review of site documents, the PRPs largely financed and performed
the response actions with oversight of EPA and state agencies. SEMS
expenditure data show EPA incurred $75,000 in Fund expenditures to
conduct an air quality monitoring and assessment at the St. Rose site,
after the state requested assistance from EPA. No Fund expenditures
were reported at the Benicia site.
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\43\ 2017 Pollution Report for Benicia Valero Refinery Site.
\44\ 2014 and 2015 Pollution Reports for St. Rosa Air
Assessment.
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The remaining removal site was Lake Charles NRG, located in Lake
Charles, Louisiana. Petroleum refinery operations occurred at this site
from 1983 to 1999. The refinery operations consisted of processing
petroleum feedstocks into naphtha, fuel oil, and residual fuel oil.
Rebel Energy, Inc. constructed the site and began intermittent
operation in 1983. Following several ownership changes and
bankruptcies, the site was transferred to NRG in 1998. NRG operated the
facility for a short time during 1999 and subsequently abandoned it.
Site assessment beginning in 2000 identified hundreds of storage
systems (including above-ground tanks, sludge boxes, vessels, and
drums) and process equipment containing over 200,000 gallons of
hazardous liquids, solid sludge, and liquid acid.\45\ A subsequent
visit by EPA also revealed a tank that had failed, and oil was leaking
from the secondary containment structures.
---------------------------------------------------------------------------
\45\ 2012 Pollution Report for Lake Charles NRG site.
---------------------------------------------------------------------------
EPA concludes this site represents a case in which a release or
threatened release of hazardous substances took place under the modern
regulatory framework and required taxpayer-funded cleanup. As described
in more detail in the Role of Federal and State Programs section below,
the primary regulations governing Above Ground Storage Tanks (ASTs)
used for storing oil and petroleum products are the Spill Prevention,
Control, and Countermeasure (SPCC) regulations, 40 CFR 112. These
regulations have been in place since 1990. Tank systems used to store
hazardous waste have also been regulated under RCRA (40 CFR parts 264
and 265) since 1986.\46\ Moreover, according to EPA's records, no
financially viable PRPs were identified for this site, and SEMS
expenditure data show that EPA incurred an estimated cost of $2.3
million for response and enforcement activities.
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\46\ 51 FR 25472 (Jul. 14, 1986).
---------------------------------------------------------------------------
More detailed information can be found in the background document
\47\ and supporting spreadsheets, which are available in the docket for
this rulemaking. The background document includes the list of sites
identified for analysis, as well as the data and information considered
in the screening and review process. Table 2 presents the summarized
results of the analysis.
---------------------------------------------------------------------------
\47\ Identification and Evaluation of CERCLA 108(b) Petroleum
and Coal Products Manufacturing non-National Priorities List (NPL)
Removal Sites.
Table 2--Evaluation Results for Superfund Removal Sites in the Petroleum Refinery and Coke Products Manufacturing Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of NAICS 324 superfund Detailed review identified a Cases with release(s) under
Total NAICS 324 superfund removal cases screened out Detailed review concluded possible modern regulation modern regulation that
removal cases evaluated based on pre-1980, or PRP release occurred prior to the release but no significant required taxpayer funded
lead status modern regulatory framework taxpayer expenditures response
--------------------------------------------------------------------------------------------------------------------------------------------------------
51 30(16) \48\ 2 2 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Petroleum Exclusion
---------------------------------------------------------------------------
\48\ The number in parentheses indicates the sites that were
also removed at this stage in the analysis: 12 sites for which EPA
determined the industrial activities did not involve either
petroleum refining or coal products manufacturing, and four sites
for which there was not enough documentation to be included in the
analysis.
---------------------------------------------------------------------------
In identifying and reviewing cleanup cases in the Petroleum and
Coal Products Manufacturing industry, EPA was mindful of the CERCLA
petroleum exclusion. CERCLA Section 101 excludes petroleum, or any
fraction thereof, from the statutory definition of a hazardous
substance unless it is listed
[[Page 70478]]
or designated as a hazardous substance under certain other
environmental laws, including RCRA. As a result, some releases of
``petroleum'' are not subject to CERCLA liability or response
authority.
Notwithstanding the exclusion, EPA's review of the cleanup sites
that had petroleum or coal product manufacturing operations identified
numerous instances in which CERCLA responses were taken. Many of these
instances pertained to sites where RCRA hazardous wastes had been
mishandled; these releases were not excluded by the petroleum
exclusion. In reviewing releases at Petroleum and Coal Products
Manufacturing sites, EPA was careful to exclude from its analysis
petroleum releases at sites where CERCLA authority was used to address
other releases. EPA encountered only one release at an NPL site where
the petroleum exclusion brought the release's relevance to our analysis
in question. At this site, the Falcon Refinery site, the release
occurred from a crude oil storage facility that had been operating over
a decade after the refinery closed. As such, the release was determined
to have occurred at a facility which is outside the scope of NAICS 324
and would better be classified as NAICS 424710--Petroleum Bulk Stations
and Terminals. Thus, that specific release was excluded from the
analysis on those grounds.
Prevalent Sources of Releases
EPA's analysis of cleanup cases compiled information, where
discernable, on the root cause of releases. Across the industry
overall, the most prevalent issues were soil and surface water and
groundwater contamination from unlined or leaking storage tanks, drums,
surface impoundments, and surface water lagoons, and uncontrolled
polluted stormwater runoff. Additionally, at NPL sites using the SAA,
and non-NPL removal sites, abandoned units (e.g., tank farms, drums)
containing hazardous substances and soil contamination resulting from
process activities were prevalent sources of contamination. As
discussed in the next section, there are regulations in place that
address these types of releases.
B. Role of Federal and State Programs and Voluntary Protective Industry
Practices at Facilities in the Petroleum and Coal Products
Manufacturing Industry
In the 2010 ANPRM, EPA recognized that the NPL data reflects
releases arising from activity that, in some cases, predates CERCLA,
RCRA, and other modern environmental requirements. The Agency welcomed
information about current releases of hazardous substances to the
environment to help inform EPA's future actions. As discussed in the
Approach section of this proposal, to enable EPA to base its decision
on risk posed by facilities operating under modern conditions, i.e.,
the types of facilities to which financial responsibility requirements
would apply, EPA developed an approach to identify and consider
relevant state and Federal regulatory requirements and financial
responsibility requirements that currently apply to operating
facilities, as well as voluntary protective practices. EPA thus
undertook an effort to gather information about Federal and state
environmental programs and industry voluntary programs that have been
implemented and are applicable to currently operating facilities within
the Petroleum and Coal Products Manufacturing industry today. EPA
evaluated the extent to which activities that contributed to the risk
associated with the production, transportation, treatment, storage, or
disposal of hazardous substances are now regulated. EPA recognizes that
substantial advances have been made in the development of
manufacturing, pollution control, and waste management practices, as
well as the implementation of Federal and state regulatory programs to
prevent and address releases at these facilities. In part, EPA's
proposed decision to not issue financial responsibility requirements
for this industry is based on EPA's review and analysis of Federal
regulations and complemented by state program regulations. EPA's
proposed findings and conclusions about the impact of Federal and state
environmental programs, along with industry voluntary programs, are
discussed in the following section.
Overview of Federal and State Regulatory Programs and Industry
Voluntary Practices Applicable to Facilities in the Petroleum and Coal
Products Manufacturing Industry
EPA evaluated Federal and state regulations that address the
potential for release of hazardous substances to the range of
environmental media that may be affected by a release from a facility
in the Petroleum and Coal Products Manufacturing industry. EPA found
that a comprehensive regulatory framework has developed since the
enactment of CERCLA. Federal statutes such as the CAA, CWA, TSCA, RCRA,
and the Emergency Planning and Community Right-to-Know Act (EPCRA) are
applicable across the entire industry and lay the foundation for this
regulatory framework. Specific regulations are discussed in the
background document according to the affected media that the
regulations address: Air pollution, water pollution, emergency planning
and response, hazardous substances management, and hazardous and non-
hazardous waste management and disposal. This background document is
located in the docket for this rulemaking.\49\
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\49\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Petroleum Refineries and Other Petroleum and Coal
Products Manufacturing Facilities.
---------------------------------------------------------------------------
Regulations Addressing Prevalent Sources of Releases Identified in
Analysis of Cleanup Cases
EPA's analysis of the cleanup cases found that the most prevalent
releases involved:
Surface and ground water contamination from unlined or
leaking storage tanks, drums, surface impoundments, and surface water
lagoons, and uncontrolled polluted stormwater runoff;
Abandonment and disposal of contaminated soil and debris;
Improper storage of hazardous waste; and
Soil and water contamination from spills and hazardous
substance management practices.
The comprehensive regulations for the management and disposal of
hazardous waste, promulgated under the authority of RCRA, were designed
to prevent these types of releases and assure that past spills are
cleaned up by facility owners and operators. Specifically, Subtitle C
of RCRA required EPA to establish a hazardous waste management program,
and EPA developed a ``cradle to grave'' approach to control the
generation, transportation, treatment, storage, and disposal of
hazardous waste.\50\ EPA's regulatory approach under RCRA includes
standards specific to types of hazardous wastes, types of hazardous
waste disposal facilities, and types of hazardous waste disposal
activities; EPA enforces these standards through permitting, reporting
and inspection programs.\51\
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\50\ ``EPA History: Resource Conservation and Recovery Act,''
EPA, at: https://www.epa.gov/history/epa-history-resource-conservation-and-recovery-act.
\51\ ``EPA History: Resource Conservation and Recovery Act,''
EPA, at: https://www.epa.gov/history/epa-history-resource-conservation-and-recovery-act; ``Summary of the Resource
Conservation and Recovery Act,'' EPA, at: https://www.epa.gov/laws-regulations/summary-resource-conservation-and-recovery-act.
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[[Page 70479]]
In 1980, under the authority of RCRA Subtitle C, EPA promulgated
the initial hazardous waste management and permitting regulations.
These regulations included the identification of hazardous wastes that
would be regulated under RCRA Subtitle C. Under Subtitle C, generators
of hazardous waste are required to ensure and fully document that the
hazardous waste they produce is properly identified, managed, tracked,
and treated prior to recycling or disposal. The degree of regulation to
which each generator is subject depends to a large extent on how much
waste each generator produces every calendar month. Early in the
development of the RCRA program, EPA recognized that a relatively small
number of industrial facilities generated the majority of the nation's
hazardous waste. EPA initially focused on these large quantity
generators, i.e., those that generate 1,000 kilograms or more of non-
acute hazardous waste per month (or more than 1 kilogram of acute
hazardous waste per month). These facilities must obtain an EPA
identification number and report the quantities and types of hazardous
waste they generate, as well as the intended receiving facility for
treatment and disposal, unless the waste will be managed onsite. Large
quantity generators who send their waste offsite are responsible for
the proper packaging and labeling of the waste before transport and the
tracking of the waste to the destination facility using the uniform
hazardous waste manifest. Large quantity generators may store their
waste on site for less than 90 days before transport to a treatment and
disposal facility; that storage is subject to the same unit-specific
standards (described below) applicable to treatment, storage, and
disposal facilities.
RCRA Subtitle C also established standards for hazardous waste
treatment, storage, and disposal facilities (TSDFs). Operators that
handle or manifest hazardous waste at any point in its lifecycle,
including generators and transporters, are required to notify EPA of
these activities. To keep track, TSDF owners and operators must keep
records and make reports to EPA. TSDFs are required to track hazardous
waste they receive through EPA's hazardous waste manifest system, among
other recordkeeping and reporting standards.
RCRA Subtitle C regulations created a permitting program for
hazardous waste TSDFs. The TSDF permitting regulations include
application procedures, permit approval conditions, and monitoring and
reporting requirements. TSDFs must have permits for the entirety of the
active life of the permitted units, including during closure of waste
management units. New and existing hazardous waste TSDFs must submit a
RCRA permit application at least 180 days before the commencement of
construction and/or hazardous waste management activities.\52\ Both
permitted and interim status TSDFs must comply with general facility
operating standards, preparedness and prevention, contingency plans and
emergency procedures, as well as specific technical standards designed
to insure that hazardous waste management units such as storage tanks
and containers, landfill, surface impoundments, waste piles, land
treatment of hazardous waste, and solid waste management units are
operated in a manner that prevents releases. To minimize the potential
for leachate to threaten human health and the environment, EPA
developed design and operating standards that use a combination of
different technologies and good operating practices to detect, contain,
and clean up any leaks that might occur. To prevent releases of
hazardous waste into the environment, containers holding liquid
hazardous wastes at a permitted TSDF must have a secondary containment
system. Secondary containment is emergency short-term storage designed
to hold leaks from hazardous waste management units.
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\52\ 45 FR 33063 (May 19, 1980).
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Slightly later in the 1980s, EPA promulgated regulations that set
financial assurance requirements for TSDFs.\53\ The TSDF standards
eventually included air emission standards for process vents, equipment
leaks, tank systems, surface impoundments, and containers. The
regulations covering proper management of surface impoundments, found
in 40 CFR parts 264 and 265, Subpart K, require facilities that store
hazardous waste in surface impoundments to meet specific design
requirements, which include a double liner system, leachate collection
and removal systems, and a leak detection system. The regulations for
containers, found in 40 CFR parts 264 and 265, Subpart I, include
provisions regarding design and operating requirements, and
inspections. Certain 40 CFR part 265 standards also apply to hazardous
waste containers at generator sites.
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\53\ 45 FR 33063 (May 19, 1980); 47 FR 15047 (Apr. 7, 1982).
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HSWA was enacted in 1984, largely in response to citizen concerns
that existing methods of hazardous waste disposal, particularly land
disposal, were not safe. With HSWA, Congress sought to minimize waste
generation and phase out land disposal of hazardous waste. Accordingly,
in 1986, EPA promulgated a suite of regulations that established
standards and restrictions for land disposal of hazardous waste. While
the regulations set stringent guidelines for the land disposal of
hazardous waste, some hazardous wastes and some types of land disposal
are prohibited altogether. Although there are exceptions, operators are
generally prohibited from diluting hazardous waste as a substitute for
treatment. In addition, operators can land dispose hazardous waste only
following treatment and only in appropriate land treatment units,
landfills and surface impoundments. Further, operators must meet
testing, removal, recordkeeping, and design requirements. Additional
standards, restrictions, and prohibitions are in place for hazardous
waste that exhibited ignitability, corrosivity, reactivity, or
toxicity.\54\
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\54\ 51 FR 40572 (Nov. 7, 1986).
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HSWA required that all landfills and surface impoundments install
groundwater monitoring, comply with technical requirements, such as
double liners and leachate collection, and obtain financial assurance.
The HSWA amendments also added to RCRA's regulations for small quantity
generators, facilities that generated between 100 to 1,000 kilograms
per month of hazardous waste, which were previously exempt from RCRA
rules. These small quantity generator rules took effect in 1986.
Generators of less than 100 kilograms per month of hazardous waste
(i.e., conditionally-exempt small quantity generators) remained subject
to significantly reduced requirements.\55\ EPA amended the hazardous
waste generator provisions in 2016, largely to clarify the
requirements.\56\
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\55\ Id.
\56\ 81 FR 85732 (Nov. 28, 2016).
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HSWA also established closure and post-closure requirements for
hazardous waste TSDF facilities. The regulations require facilities to
develop closure plans for all hazardous waste management units. All
TSDFs are required to prepare and submit written closure plans. A
permitted facility submits this plan as part of its permit application.
Once the plan is approved by the permitting agency, it becomes part of
the facility's operating permit.
[[Page 70480]]
Interim status facilities \57\ must have written closure plans within
six months of becoming subject to the closure regulations. Upon the
completion of closure of a hazardous waste disposal unit, owners and
operators must submit a certification of closure to the relevant state
or EPA regional office. Following closure, facilities must implement a
post-closure plan that abides by post-closure property use and care
guidelines. The standard post-closure care period is 30 years, but this
can be shortened or extended on a case-by-case basis by the permitting
authority (i.e., the EPA Region or the authorized state regulatory
agency). Post-closure notification and security requirements remain in
place so long as hazardous waste is present at the facility, even after
the 30-year post-closure period.\58\
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\57\ Interim status facilities are facilities that were already
in existence at the time of the enactment of the permitting
regulations. Interim status facilities must comply with the
requirements in 40 CFR part 265 until they receive their permit.
\58\ 51 FR 16444 (May 2, 1986).
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HSWA provided EPA with authority to develop a broader corrective
action program. Under this program, EPA requires owners and operators
of facilities that treat, store or dispose of hazardous waste to
investigate and clean up hazardous releases into soil, groundwater,
surface water and air, thus reducing the likelihood that these
facilities would require cleanup under Superfund. RCRA permits issued
to TSDFs must include provisions for both corrective action and
financial assurance to cover the costs of implementing those cleanup
measures. EPA also possesses additional authorities to order corrective
action through enforcement orders, which are not contingent upon a
facility's permit. In addition, facilities may voluntarily choose to
clean up their contamination.
EPA issued regulations under RCRA Subtitle C that were specific to
the Petroleum and Coal Products Manufacturing industry in 1980, 1990,
and 1998. In 1980, EPA classified the following waste from the
petroleum refining industry as RCRA hazardous waste: Dissolved air
flotation float; slop oil emulsion solids; heat exchanger bundle
cleaning sludge; separator sludge; and leaded tank bottoms. In 1990,
EPA classified the following as RCRA hazardous waste: Petroleum
refinery primary oil/water/solids separation sludge; and petroleum
refinery secondary (emulsified) oil/water/solids separation sludge.
The 1998 regulations categorized four wastes generated during
petroleum refining operations as hazardous wastes subject to full
Subtitle C regulation, while opting not to categorize an additional ten
petroleum refining wastes as hazardous. The wastes that the 1998 rule
classified as hazardous wastes under RCRA were: Crude oil storage tank
sediment from petroleum refining operations; clarified slurry oil
storage tank sediment and/or in-line filter/separation solids from
petroleum refining operations; spent hydrotreating catalyst from
petroleum refining operations, including guard beds used to desulfurize
feeds to other catalytic units; and spent hydrorefining catalyst from
petroleum refining operations, including guard beds used to desulfurize
feeds to other catalytic units. The rule also changed RCRA regulations
to exclude certain oil-bearing residuals from the definition of solid
waste--such as oil and oil-bearing residuals that petroleum refineries
insert into the refining process and spent caustic from liquid treating
operations that are used in chemical production operations--in order to
promote the recycling of those materials.\59\
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\59\ 63 FR 42110 (Aug. 6, 1998).
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In addition to Subtitle C requirements, RCRA Subtitle D established
a program for management and disposal of non-hazardous industrial and
municipal solid waste through state solid waste management plans that
conform with Federal guidelines. And RCRA Subtitle I requires EPA to
promulgate technical standards and corrective action requirements for
owners and operators of underground storage tanks (USTs), including
underground storage tanks that contain hazardous substances or
petroleum products. The UST regulations include requirements for
design, installation, notification, operational procedures, release
reporting, release response and corrective action procedures for
underground storage tank systems that contain petroleum or hazardous
substances. The regulations also include financial responsibility
requirements for underground storage tank owners and operators. In
addition, EPA has established guidelines for the approval of state
underground storage tank programs.\60\
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\60\ 53 FR 37082 and 43322 (Nov. 27, 2018).
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In addition to the regulatory scheme that RCRA imposes on the
management of hazardous waste in underground storage tanks that store
petroleum products and chemicals, petroleum refineries and coal
products manufacturing facilities are subject to a number of additional
regulatory provisions that reduce the potential for a Federally-
financed response action. Catastrophic releases of hazardous substances
and the use of toxic chemicals and other hazardous substances are
additional environmental and safety concerns for petroleum refineries
and coal products manufacturing facilities. Several environmental laws
authorize regulations requiring the development of response plans for
various emergencies in order to reduce the effects of a release, and to
notify local emergency response personnel and facilitate cooperation.
For example, EPA implements the Chemical Accident Prevention Provisions
of Section 112(r) of the Clean Air Act Amendments, which require
certain facilities to generate Risk Management Plans (RMPs) to mitigate
the effects of a chemical accident and coordinate with local response
personnel. Emergency Action Plan (EAP) regulations under the
Occupational Safety and Health Act (OSHA) require that employers
prepare a written EAP to create practices to follow during workplace
emergencies. EPA implements regulations under the EPCRA that impose
emergency planning, reporting, and notification requirements for
hazardous and toxic chemicals.
Contamination of surface water is largely addressed by the Clean
Water Act. The CWA established the National Oil and Hazardous
Substances Pollution Contingency Plan (NCP), which sets a blueprint for
responding to oil spills and hazardous substance releases. At its
inception in 1968, the NCP provided a comprehensive Federal system of
accident reporting, spill containment, and cleanup of oil spills. In
1972, the CWA expanded it to include hazardous substance releases.\61\
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\61\ ``National Oil and Hazardous Substances Pollution
Contingency Plan (NCP) Overview,'' at: https://www.epa.gov/emergency-response/national-oil-and-hazardous-substances-pollution-contingency-plan-ncp-overview.
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The 1990, Oil Pollution Act amended the CWA and authorized
regulations requiring facility owners or operators to prepare response
plans for worst-case scenario oil discharges. In addition, the Oil
Pollution Prevention Regulations require facilities that store or use
certain amounts of oil and oil products to develop SPCC Plans to
prevent the discharge of oil to navigable waters in case of a spill.
EPA finalized the full suite of amendments to the Oil Pollution
Prevention Regulation in 2002.\62\
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\62\ 40 CFR 112; ``Overview of the Spill Prevention, Control,
and Countermeasure (SPCC) Regulation,'' EPA, at: https://www.epa.gov/oil-spills-prevention-and-preparedness-regulations/overview-spill-prevention-control-and.
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[[Page 70481]]
State Regulatory Programs
Some states impose requirements on the Petroleum and Coal Products
Manufacturing industry in addition to requirements related to Federal
programs. These stricter or additional standards for emissions, spill
prevention, emergency preparedness, and hazardous substance management
on facilities that handle toxic or hazardous chemicals can reduce risk
at facilities that manage hazardous substances. EPA researched state
environmental regulations relevant to the Petroleum and Coal Products
Manufacturing industry for a representative sample of states. A
discussion of these state regulations, as well as the methodology EPA
used in selecting the 11 states that it researched, is in a background
document, which is available in the docket for this rulemaking.\63\
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\63\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Petroleum Refineries and Other Petroleum and Coal
Products Manufacturing Facilities.
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States with significant oil and gas refining and manufacturing
industries have implemented state regulations applicable to facilities
that store or use oil and oil-related materials, including petroleum
refineries and petroleum and coal product manufacturing facilities. For
example, Alaska has established requirements for owners or operators of
petroleum production facilities to prevent the discharge of oil; these
regulations include financial responsibility provisions for oil
terminal facilities. Alaska also established comprehensive workplace
safety standards for the petroleum refining industry, including
standards for process equipment maintenance, equipment leakage, and
breakage.
Industry Voluntary Practices
EPA reviewed facility RMPs, industry materials, governmental
literature, and academic literature to locate voluntary programs that:
(1) Attempt to address CERCLA hazardous substance management or
disposal, and release prevention, mitigation, and response; (2) are
relevant to petroleum refineries and coal products manufacturing
facilities; and (3) in which petroleum refineries and coal products
manufacturing facilities participate. Industry voluntary programs fall
into three categories: Those sponsored by Federal, state or local
governmental agencies; those fostered within industry associations or
non-governmental organizations; and those implemented by individual
firms. These programs set or publish environmental management and
safety standards that facilities may follow to supplement Federal and
state requirements with additional standards and may come with a
certification from the government agency or industry group that
establishes the standards. Voluntary programs may also serve as forums
for coordination and collaboration among companies, facilities, and
government agencies to develop best practice standards and improve
emergency preparedness. EPA's review of available studies found that
the industry voluntary programs can be effective at reducing both
pollution and the frequency of government enforcement actions. A
discussion of industry voluntary practices, as well as the methodology
used by EPA, is in a background document, which is available in the
docket for this rulemaking.\64\
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\64\ Id.
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C. Existing State and Federal Financial Responsibility Programs
To help inform the level of risk of a Fund-financed response action
associated with classes of facilities in the Petroleum and Coal
Products Manufacturing industry, EPA reviewed existing state and
Federal financial responsibility programs that may be applicable to the
industry and that cover a wide range of liabilities, including
liabilities for closure, post-closure care, corrective action, third-
party personal injury/property damage, and natural resource damages.
EPA focused on these types of financial responsibility programs for two
reasons. First, these categories of damages, actions, and costs are
like those that could be covered by CERCLA Section 108(b) rulemaking,
and thus they help inform the need for CERCLA Section 108(b) financial
responsibility for this industry. Secondly, the existence of financial
responsibility requirements can help create incentives for sound
practices, reducing the risk of releases requiring CERCLA response
action. EPA also sought to identify state cleanup funds that are at
least partially funded by industry (e.g., through a tax on hazardous
wastes generated), and that could cover future CERCLA liabilities that
may arise at petroleum and coal product manufacturing facilities. EPA's
report focused on the 25 states reviewed in EPA's reports on existing
state regulatory and voluntary programs (excluding financial
responsibility programs) that may be applicable to petroleum and coal
product manufacturing facilities.
Finally, EPA reviewed existing financial responsibility
requirements in the following Federal programs: (1) RCRA Subtitle C
TSDFs; (2) TSCA commercial PCB waste facilities; and (3) EPA Safe
Drinking Water Act Underground Injection Control wells. The report is
available in the docket for this rulemaking.\65\
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\65\ Review of Existing Financial Responsibility Laws
Potentially Applicable to Classes of Facilities in the Petroleum and
Coal Products Manufacturing Industry.
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EPA identified a range of existing financial responsibility
programs that may be applicable to facilities in the Petroleum and Coal
Products Manufacturing industry. The programs include the Federal
programs mentioned above, as well as state programs related to:
Financial responsibility for used oil processing and re-
refining facilities,
Financial responsibility for hazardous waste TSDFs,
Financial responsibility for underground injection of
hazardous wastes,
Financial responsibility for storage tanks containing
hazardous substances,
Corrective action financial responsibility to address
hazardous waste or hazardous constituents,
Facility remediation financial responsibility associated
with transfer in ownership or facility closure, and
Other authorities to require financial responsibility to
assure compliance with orders.
The applicability of these programs will depend on a variety of
facility-specific factors, for example, use of a specific piece of
equipment (e.g., an underground storage tank that contains regulated
substances) or engaging in a specified activity (e.g., a release of a
hazardous substance). Furthermore, state financial responsibility
programs vary by state and some types of financial responsibility
programs exist only in limited subsets of the states reviewed. EPA
believes that state and Federal financial responsibility programs help
reduce risk of a Fund-financed response action at facilities where they
are applicable. While financial responsibility programs vary in
structure and function, they may reduce such risk in a myriad of ways.
For example, they may help ensure undercapitalized firms do not engage
in environmentally risky enterprises, reduce the incentive to abandon
properties with extensive contamination, ensure compliance with
protective requirements, and incentivize better environmental
practices.
[[Page 70482]]
D. Compliance and Enforcement History
To understand the experience of court settlements and judgments,
EPA looked at compliance and enforcement in the Petroleum and Coal
Products Manufacturing industry. EPA believes that compliance
assistance, compliance monitoring, and enforcement are important
components of the regulatory framework discussed above. Through
inspections, compliance monitoring can identify noncompliance at
regulated facilities. Enforcement actions may result in legal
instruments that ensure correction of deficiencies to achieve
compliance with environmental requirements. Some functions of
compliance and enforcement actions are particularly pertinent to the
risk determination for rulemaking under CERCLA Section 108(b). First,
if noncompliance causes release of a hazardous substances EPA can
ensure in negotiated agreements that the responsible party carries out
or pays for the cleanup. Second, enforcement actions can result in
orders and settlements that compel a responsible party to return to
compliance. Third, the prospect of financial penalties that can
accompany these enforcement instruments can encourage compliance. All
of these functions support the regulatory structure in reducing risk of
Fund expenditures.
EPA looked at applicable enforcement authorities as well as
historical enforcement and compliance data in the development of this
proposal. EPA obtained data from the EPA Enforcement and Compliance
History Online (ECHO) system and provides a review of the Federal
environmental enforcement settlements and judgments data from FY 1974
through FY 2017.\66\ Facilities whose primary NAICS codes indicate
Petroleum and Coal Products Manufacturing (NAICS 324) were included in
EPA's review. ECHO data show that targeted initiatives and routine
review or inspection of facilities resulted in over 2500 enforcement
cases in the Petroleum and Coal Products Manufacturing industry from FY
1974 through FY 2017. CAA (53%) and CWA (18%) cases were the most
common. There are a smaller number of cases in RCRA (9%), CERCLA (8%),
EPCRA (6%), and TSCA (4%). Further description of this review is in the
background document, which is available in the docket for this
rulemaking.\67\
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\66\ ECHO does not include all of EPA's compliance and
enforcement activity because regions are not required to report
``informal actions,'' and it does not consistently capture all state
actions.
\67\ Enforcement, Court Settlements and Judgments in the
Petroleum and Coal Products Manufacturing Industry.
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As noted above, the Risk Management Program under Chemical Accident
Prevention Provisions of Section 112(r) of the Clean Air Act Amendments
requires certain facilities to generate Risk Management Plans (RMPs) to
mitigate the effects of a chemical accident and coordinate with local
response personnel. Assuring compliance with this program has been a
priority of EPA's Office of Enforcement and Compliance Assurance since
2017.
Enforcement cases can include instances in which removal action,
release reduction, or return to compliance include the removal of
contaminated media by the responsible party. Measures to remove
contamination may be required in enforcement orders under the range of
environmental statutes and are negotiated to require activities aligned
with return to compliance.\68\ In this situation, enforcement action
directly reduces risks to human health and the environment. During the
period FY 2011 through FY 2016, 14 settled Petroleum and Coal Products
Manufacturing industry enforcement cases were flagged in ECHO as
involving removal of contaminated media. They are primarily CWA (8 of
the 14) cases. One Clean Air Act, two RCRA and three CERCLA cases are
also included.
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\68\ These ECHO enforcement removals are separate from the
Superfund removals analyzed elsewhere. ECHO system data includes the
combined value of total enforcement financial penalties,
Supplemental Environmental Projects (SEPs), and associated
compliance activity.
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The substances removed included metals, hydrocarbons, asbestos, and
hazardous chemicals. These cleanups resulting from Federal enforcement
actions mitigated risks to human health and the environment, removing
contaminated soils, groundwater and a variety of hazardous substances,
and reduced likelihood of impact to the Fund.
Settlements and judgments in enforcement cases can result in
financial penalties, supplemental environmental projects (SEPs), and
activities required to return to compliance.\69\ Enforcement
settlements and judgments can ensure that the responsible party
conducts or pays for cleanup, drive a return to compliance, and
incentivize compliance.
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\69\ Compliance actions ordered can include the removal of
contaminated media, installation of new equipment, or implementation
of compliant processes.
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As stated in the cleanup site evaluations in Section VII.A,
particular consideration was given to CERCLA and RCRA regulations that
had relevant components which apply to the Petroleum and Coal Products
Manufacturing industry. There have been over 400 CERCLA and RCRA
enforcement cases in this industry, beginning in 1981. For context,
there are approximately 2,167 establishments currently operating in the
industry. The ten largest CERCLA or RCRA enforcement settlements and
judgments for the Petroleum and Coal Products Manufacturing industry
each have 2017 inflation-adjusted total values ranging from over $13
million to $72 million. Further discussion of the details on the
Federal actions for these and additional criminal cases can be found in
the background document for this section and is available in the docket
for this rulemaking.\70\ This document lists facilities where
noncompliance was identified and was addressed by means of formal
Federal enforcement. The background document does not include
facilities where noncompliance was addressed through informal
enforcement or facilities where noncompliance was addressed by a state.
In addition, it does not include facilities where noncompliance was not
identified, either because those facilities were not inspected or
because they were inspected and found in compliance.
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\70\ Enforcement, Court Settlements and Judgments in the
Petroleum and Coal Products Manufacturing Industry.
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The compliance and enforcement actions documented here and in the
background document show that where noncompliance is identified, the
preponderance of industry responsible parties are conducting or paying
for cleanups, returning to compliance, and improving public health and
the environment. Although enforcement actions alone do not completely
supplant the need for Fund-financed response actions in the Petroleum
and Coal Products Manufacturing industry (as discussed in section VIII,
below), effective criminal, civil and judicial enforcement demonstrates
proper functioning of this component of the modern regulatory
framework. Enforcement thus serves as a complementary element
supporting the overall conclusion that CERCLA Section 108(b) financial
assurance is not necessary.
[[Page 70483]]
VIII. Decision to Not Propose Requirements
Based on consideration of the analyses described in the previous
sections, EPA has reached a conclusion that the degree and duration of
risk posed by the Petroleum and Coal Products Manufacturing industry
does not warrant financial responsibility requirements under CERCLA
Section 108(b) and thus is proposing to not issue such requirements.
The analysis and proposed finding in this proposal are not applicable
to and do not affect, limit, or restrict EPA's authority (1) to take a
response action or enforcement action under CERCLA at any facility in
the Petroleum and Coal Products Manufacturing industry, including any
currently operating facilities or those described in this proposal and
in the background documents for this proposal, and (2) to include
requirements for financial responsibility as part of such response
action. The set of facts in the rulemaking record related to the
individual facilities discussed in this proposed rulemaking supports
the Agency's proposal not to issue financial responsibility
requirements under Section 108(b) for this class, but a different set
of facts could demonstrate a need for a CERCLA response action at an
individual site. This proposed rulemaking also does not affect the
Agency's authority under other authorities that may apply to individual
facilities, such as the CAA, CWA, RCRA, and TSCA.
EPA believes the evaluation of the Petroleum and Coal Products
Manufacturing industry demonstrates significantly reduced risk of a
Fund-financed response action at current operations. The reduction in
risks due to the requirements of existing regulatory programs and
voluntary practices, combined with reduced costs to the taxpayer--
demonstrated by EPA's cleanup case analysis, existing financial
responsibility requirements, and enforcement actions--has reduced the
need for Federally-financed response action at facilities in the
Petroleum and Coal Products Manufacturing industry. EPA looked at
current industry practices, market structure and economic performance
of the industry; analyzed cleanup cases for facilities in the industry;
and evaluated the extent to which the industry and sources of releases
are covered by the modern regulatory framework, the degree to which
taxpayers have been called upon to pay for cleanup, and EPA enforcement
history in the industry.
As discussed in section VII.A, EPA identified only one cleanup case
that occurred under the modern regulatory framework and also entailed
some Fund expenditure. Overwhelmingly, however, the industry was found
to be practicing responsibly within the current regulatory framework,
with just one site indicating a significant impact to the Fund while
operating under the modern regulatory framework. For context, there are
approximately 2,167 establishments currently operating in the industry.
The language in Section 108(b) on determining the degree and duration
of risk and on setting the level of financial responsibility confers a
significant amount of discretion on EPA. In the past, some of the risks
associated with spills resulted from, or were exacerbated by, cleanups
not being undertaken in a timely fashion. However, under the modern
regulatory framework, requirements such as the Risk Management Plan
under the CAA, the Emergency Action Plan under OSHA, and as RCRA
requirements for TSDFs to detect, contain, and clean up any leaks,
including facility-wide corrective action, all help to ensure timely
responses to releases. In addition to the requirements for facilities
to respond to spills in a timely fashion, the public can alert the
Federal government to releases by calling the National Response Center
(NRC), which is a part of the Federally established National Response
System and staffed 24 hours a day by the U.S. Coast Guard. The NRC is
the designated Federal point of contact for reporting all oil,
chemical, radiological, biological and etiological discharges into the
environment, anywhere in the United States and its territories.
Only one site (discussed in detail in Section VII.A) had
significant releases or threatened releases of hazardous substances
under the modern regulatory framework and required more than minimal
taxpayer-funded cleanups. Additionally, none of the at least 20
refineries that have closed since 2000, under the modern regulatory
framework, had releases that resulted in a more than minimal burden to
the Fund. It is EPA's assessment that the small set of Federally-funded
cleanup cases due to recent contamination does not warrant the
imposition of costly financial responsibility requirements on the
entire Petroleum and Coal Products Manufacturing industry under CERCLA
Section 108(b).
EPA acknowledges that regulations do not always prevent releases,
and the risk of a release is lessened but never eliminated by existing
Federal and state environmental regulations. However, EPA believes that
the network of Federal and state regulations creates a comprehensive
framework that applies to prevent releases that could result in a need
for a Fund-financed response action. Numerous Federal programs have
been established under several environmental statutes since CERCLA was
enacted on December 11, 1980. These include programs under RCRA, which
requires proper management and disposal of hazardous waste; under TSCA,
which regulates the manufacture and sale of chemicals; and under both
the CWA and the CAA, which address releases to water and air. In
addition to these Federal programs, some states have stricter or
additional standards beyond Federal requirements. These Federal and
state programs are discussed in detail in Section VII. B and in the
background document, which is available in the docket for this
rulemaking.\71\
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\71\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Petroleum and Coal Products Manufacturing Facilities.
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In addition, enforcement settlements and judgments that force
return to compliance are important components of the applicable
regulatory structure. EPA's analysis of enforcement history shows that
enforcement of the applicable regulations provides a lever to monitor
compliance, obtain responsible party cleanups, and recover financial
penalties. Federal and state regulatory programs, backed up by
enforcement and complemented by industry voluntary practices, have
improved public health and the environment significantly since CERCLA's
initial adoption nearly 40 years ago. EPA believes that within the
Petroleum and Coal Products Manufacturing industry, this framework
provides effective controls that protect human health and the
environment.
Examination of market structures for the Petroleum and Coal
Products Manufacturing industry further indicates comparatively low
likelihood of default on environmental obligations at the expense of
taxpayers and the government by companies in this industry. This
economic performance, combined with the low impact to the Fund by
facilities with releases that happened under the modern regulatory
framework, suggests that the degree of risk to the Fund by this
industry does not rise to a level that warrants imposing CERCLA Section
108(b) financial responsibility requirements.
For these reasons, EPA is proposing today to not issue financial
responsibility requirements under CERCLA Section 108(b) for this
industry.
[[Page 70484]]
A. Solicitation of Public Comment on This Proposal
EPA solicits comments on all aspects of today's proposal. EPA is
specifically interested in receiving comments on several issues and
requests the following information:
Examples of Petroleum and Coal Products Manufacturing
industry related response actions for releases which took place under
the modern regulatory framework where potentially responsible parties
(PRPs) did not lead the response at the facility.
Examples of Petroleum and Coal Products Manufacturing
industry related response actions for releases which took place under
the modern regulatory framework where PRPs have not taken financial
responsibility for their environmental liabilities.
Information on state-lead or other Federal agency cleanups
or instances of natural resource damages associated with this industry
that may supplement the information on cleanups gathered and analyzed
for this proposal.
Information about existing Federal, state, tribal, and
local environmental requirements applicable to the Petroleum and Coal
Products Manufacturing industry relevant to the prevention of releases
of hazardous substances that were not evaluated as part of this
proposal.
Information about financial responsibility requirements
applicable to the Petroleum and Coal Products Manufacturing industry
that were not evaluated as part of this proposal.
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review, because it may
raise novel legal or policy issues [3(f)(4)]. Any changes made in
response to OMB recommendations have been documented in the docket for
this rulemaking. EPA did not prepare an economic analysis for the
proposed rule, since this action proposes no regulatory requirements.
B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
This proposed rule is not subject to the requirements of Executive
Order 13771 (82 FR 9339, February 3, 2017) because this proposed rule
would not result in additional cost.
C. Paperwork Reduction Act (PRA)
This action does not propose an information collection burden under
the PRA, because this action does not propose any regulatory
requirements.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action does not propose any new requirements for small entities.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments, because this action does not propose any regulatory
requirements.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the Federal Government and the states, or on the distribution of power
and responsibilities among the various levels of government, since this
action proposes no new regulatory requirements.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175, because this action proposes no regulatory
requirements. Thus, Executive Order 13175 does not apply to this
action.
H. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
This action is not subject to Executive Order 13045 because it is
not economically significant as defined in Executive Order 12866, and
because EPA does not believe the environmental health or safety risks
addressed by this action present a disproportionate risk to children,
since this action proposes no regulatory requirements.
I. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution or use of energy, since this action proposes no regulatory
requirements.
J. National Technology Transfer and Advancement Act
This rulemaking does not involve technical standards.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
EPA believes that this action is not subject to Executive Order
12898 because it does not establish an environmental health or safety
standard, since this action proposes no regulatory requirements.
List of Subjects in 40 CFR Part 320
Environmental protection, Financial responsibility, Hazardous
substances, Petroleum.
Dated: December 4, 2019.
Andrew R. Wheeler,
Administrator.
[FR Doc. 2019-27066 Filed 12-20-19; 8:45 am]
BILLING CODE 6560-50-P
