The recently enacted Water Resources Reform and Development Act of 2014 established a new mandate to the U.S. EPA: change how EPA enforces the federal Spill Prevention, Control and Countermeasure (SPCC) rule against the nation’s farms. Following several years of conflict between EPA and the agricultural community, Congress intervened with a plan to reduce the SPCC rule’s impact on agriculture. The new law clarifies which farms must have certified SPCC plans that address fuel storage and spill response practices; the law also directs EPA to study and adjust the exemption levels within the next three years.
Which farms must comply with the SPCC rule?
Here is an explanation of how the new law affects SPCC rule requirements for farms. Note that the exemption level could change after EPA conducts its required study, explained below.
- Farms that must have a professionally certified SPCC plan
Farms in this category must have an SPCC plan that is certified by a professional engineer. This category includes farms that have any of the following:
- An individual aboveground tank with storage capacity over 10,000 gallons;
- An aggregate aboveground storage capacity of 20,000 gallons or more;
- A "reportable oil discharge history."
- Farms that can self-certify their SPCC plans
Farms with moderate fuel storage and no history of reportable discharges must have an SPCC plan, but the owner or operator of the farm can self-certify the plan. Farms in this category include those that:
- Have an aggregate aboveground storage capacity of 6,001 to 20,000 gallons
- And do not have a "reportable oil discharge history."
- Farms that are exempt from SPCC compliance
The EPA may not require compliance with the SPCC rule for any farm that:
- Has an aggregate aboveground storage capacity of less than 6,000 gallons.
Changes to aggregate capacity calculations will affect SPCC's reach
The new law also changes which fuel storage containers a farm must include when calculating its aggregate fuel storage capacity. This change could significantly impact whether a farm falls into the exempt, self-certified or professionally certified plan category. Previously, the SPCC rule required a farm to include any storage container of 50 gallons or more in its aggregate capacity calculation. Under the new law, a farm may now exclude these fuel storage containers from its calculation of capacity:
- All containers on separate parcels that have a capacity of 1,000 gallons or less;
- All containers holding animal feed ingredients approved for use in livestock feed by the Commissioner of Food and Drugs.
EPA must study discharge risks
The SPCC compliance requirements could change after the EPA completes the mandated study. The law requires EPA to consult with the Secretary of Agriculture to conduct a study within the next year to determine the amount that is appropriate for an SPCC rule exemption, based on whether there is significant risk of an oil discharge to water. Within 18 months of completing the study, the EPA may adjust the SPCC exemption level to not more than 6,000 gallons and not less than 2,500 gallons. This provision gives EPA an opportunity to lower the exemption beneath the current 6,000 gallon minimum if the agency can prove that there is significant risk of oil discharges on farms with fuel storage capacity between 2,500 and 6,000 aggregate gallons.
What is the SPCC rule compliance date for farms?
Surprisingly, the new law does not remove the uncertainty surrounding the deadline for a farm to comply with the SPCC rule. Maneuverings by Congress prevented EPA from enforcing the original May 13, 2013 compliance deadline until September 24, 2013. After that date, a letter from several members of Congress advised the EPA Administrator not to enforce the rule at all until Congress enacted new legislation that would exempt most farms from the rule. With the new law in place, will the EPA now enforce SPCC plan requirements against a farm? If so, then a farm that is subject to the rule could face penalties for non-compliance if it has an oil discharge and does not have its SPCC plan in place. Given that possibility, farms that fall under the new SPCC requirements should act quickly to develop their SPCC plans.
A few definitions from the SPCC rule, unchanged by the recent legislation, are helpful to understanding the rule’s application.
- Farm means a facility on a tract of land devoted to the production of crops or raising of animals, including fish, which produced and sold or normally would have produced and sold $1,000 or more of agricultural products during a year.
- Oil means oil of any kind or in any form, including, but not limited to: fats, oils, or greases of animal, fish, or marine mammal origin; vegetable oils, including oils from seeds, nuts, fruits, or kernels; and, other oils and greases, including petroleum, fuel oil, sludge, synthetic oils, mineral oils, oil refuse, or oil mixed with wastes other than dredged spoil.
- Reportable oil discharge history means either a single oil discharge over 1,000 gallons or two oil discharges that each exceeded 42 gallons and that occurred within any 12-month period in the 3 years prior to the farm’s required SPCC certification date.
For more on the SPCC rule, see the EPA's SPCC page.
Confusion at Federal Level Leaves Farmers Unsure of SPCC Rule Compliance
Peggy Hall, Asst. Professor, OSU Extension Agricultural and Resource Law Program
A common joke among attorneys is that the answer to every legal question is "maybe," and that answer is appropriate when asking whether farms will be exempted from complying with the Oil Spill Prevention, Containment and Countermeasure (SPCC) rule.
May 10, 2013 was the compliance deadline for the EPA rule requiring SPCC plans for farms storing above a threshold amount of oil. But several legislators have spoken out against the regulation and intend to exempt most farms from its requirements. As we reported in an earlier post, legislators successfully delayed EPA's ability to enforce the SPCC rule against farms until September 23, 2013, and also drafted the legislation to exempt many farms from the SPCC rule. But while the Senate and House have each passed proposals with SPCC exemption language, they've used two different bills to do so--the Senate's Water Resources Development Act and the House's Farm Bill. Neither bill has passed both chambers and the SPCC exemption remains in limbo today, the date after which the EPA may begin enforcing the rule.
In mid-August, two sponsors of the exemption, Senators Inhofe (R-OK) and Pryor (R-AR), sent a letter to EPA Administrator Gina McCarthy regarding SPCC enforcement. The letter clarified that Congress plans to exempt most farms from the rule and suggested that the EPA should not attempt to retroactively enforce the rule back to the original compliance date of May 10, 2013. Time will tell whether the senators' letter will prevent EPA from penalizing farms that did not have an SPCC plan by May 10 but had an oil spill anytime after the May 10 compliance deadline.
What Should Farmers do about SPCC Plans now?
Farmers who have been waiting to see if Congress would exempt them from the SPCC rule have to make a decision: comply now or risk penalties for non-compliance. A few considerations may help the decision-making process:
- Operating without an SPCC plan carries financial risk. If a farm that is subject to the SPCC rule does not have a plan but does have an oil spill that discharges into a waterway, the farm will incur additional penalties for failing to have and implement an SPCC plan. These penalties vary depending upon the size of the facility and the severity of the spill; our research revealed recent fines ranging from $1,500 to over $55,000. Our research also shows the cost of an SPCC plan from a certified engineer or consulting firm to begin at around $1,000, with higher costs for larger farms.
- Only certain farms must comply with SPCC. Farms that store less than 1,320 gallons of diesel, gasoline, hydraulic oil, lube oil, crop oil or vegetable oil aboveground or less than 42,000 gallons below ground do not need an SPCC plan. All other farms might need an SPCC plan if it's possible that spilled oil could discharge into a waterway. To learn more about whether a farm is subject to the SPCC plan rule, visit here.
- Smaller, lower-risk farms can "self-certify" their SPCC plan. The SPCC rule allows farms with smaller oil storage and no history of significant oil spills ("Tier I farms") to create and implement an SPCC plan; other farms require certification by an engineer. The EPA provides a model template for Tier I farms on their website. Be aware, however, that preparing the plan requires some work: a thorough assessment of the farm's oil storage, selection and installation of appropriate containment measures and proper training and response practices. For those who don't want to prepare their own plan, consider a consultant. Consulting companies offer services such as assessment, consultation, plan development, certification and future inspections.
- A farm may be able to seek a compliance deadline extension. The SPCC rule allows a farm that couldn't meet the compliance deadline to submit a written request for an extension to the EPA regional administrator for the state where the farm is located. There are several reasons EPA may grant an extension: because a Professional Engineer (PE) isn’t available to create and certify a plan, if the farm is located in an area impacted by floods, or because facility modifications could not be completed before the deadline. For more on seeking an extension, visit this link.
- Insurance coverage may be at risk. Non-compliance with the law can negate insurance coverage; most insurers would likely deem the failure to have an SPCC plan after September 23, 2013 as "non-compliant."
- Oil storage containment is good risk management. Even without the SPCC rule, assessing and managing oil storage and handling practices on the farm can pay off. Consider the recent case of an Ohio farm with a leaking oil tank that polluted a nearby waterway; the farm paid over $15,000 in fines and cleanup costs.
While "maybe" is a good answer to whether Congress will exempt many farms from the SPCC rule, it isn't a good answer to whether farmers should ignore the SPCC regulation because of the confusion in Congress. For more on SPCC and agriculture, visit the EPA's web page.
Catharine Daniels, Attorney, OSUE Agricultural & Resource Law Program.
Back in April, we alerted readers to Congress delaying the requirement for farm oil spill prevention plans (find post here). The US EPA had set a deadline of May 10, 2013 for all farms to have their Oil Spill Prevention, Control, and Countermeasure (SPCC) Plans in place. However, Congress delayed EPA’s ability to enforce the regulation until September 26, 2013, under an amendment to H.R. 933. While this delay in enforcement may cause some farmers to think twice about preparing or amending an SPCC plan, a recent Ohio Court of Appeals decision shows how costly fuel spills can be and highlights the importance of good fuel management practices on the farm.
In Ohio Environmental Protection Agency v. Lowry, a 250-gallon fuel tank in Jefferson Township had rusted through and completely drained 250 gallons of fuel oil that had been filled just a few days before. The Jefferson Township Fire Department received a call about a fuel odor coming from the property where the fuel tank was located and a “visible sheen” was evident on a local waterway. The fire department contacted the Ohio Environmental Protection Agency (OEPA) because the spill was over 50 gallons. OEPA sent a response team to assess the damage and work with the property owner to remedy the situation. OEPA informed the property owner that he should obtain a contractor to clean up the fuel and that if he failed to do so, OEPA would secure a contractor and bill the property owner for the costs as authorized by Ohio law in Ohio Revised Code Section 3745.12.
The property owner failed to obtain a contractor for the clean up. OEPA hired Environmental Enterprises, Inc. to perform the work and presented the property owner with the bill for $15, 855.92. The matter proceeded to court, where the property owner argued that because petroleum spills are exempt from chargeable cleanup costs under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), the court should interpret Ohio's law similarly and exempt him from cleanup liability. The trial court did not agree.
The Court of Appeals also disagreed with the property owner, stating that even if fuel oil is considered a hazardous substance for purposes of the federal CERCLA, the federal law “does not control the determination" of whether a spill posed a risk to the environment requiring emergency action under Ohio law. According to Ohio Revised Code Section 3745.12, any person responsible for the unauthorized spill, release, or discharge of material into or upon the environment “that requires emergency action to protect the public health or safety or the environment,” is liable to OEPA for costs incurred in the cleanup. Ohio law focuses on when emergency action is required as opposed to CERCLA's approach of defining types of hazardous waste cleanups allowed as chargeable cleanup costs.
The lesson from the Lowry case is that even though the US EPA cannot currently enforce the requirement for SPCC plans, farmers should take fuel management seriously. OEPA has the authority to respond to a fuel spill and require a property owner to pay for the cleanup, which can be costly. Though not now required by federal law, farmers should take all precautions when managing fuel and minimize the risks of a fuel spill.
Read full case here.
SPCC Rule will not be enforced against farms until September of 2013
Peggy Kirk Hall, Asst. Professor, OSU Extension Agricultural & Resource Law Program
Many farms are scrambling to meet the upcoming May 10, 2013, deadline for having an oil spill containment plan (SPCC plan) as required by EPA regulations, but Congress has quietly delayed the U.S. EPA's ability to enforce the regulation. Amendment 29 to the recently enacted funding bill, H.R. 933, states that the U.S. EPA may not use any of its funds to enforce the SPCC rule against farms for a period of 180 days, until after September 26, 2013.
The purpose of the U.S. EPA's Spill Prevention Control and Countermeasures (SPCC) program is to help facilities and farms prevent a discharge of oil into navigable waterways. Program regulations affect farms that store more than 1,320 gallons of oil or oil products in aboveground containers or more than 42,000 gallons in completely buried containers--those farms are required to develop, maintain and implement an oil spill prevention plan by May 10, 2013.
The recent action by Congress, however, prevents the EPA from enforcing the plan until late September. In the meantime, congressional efforts will focus on revising the SPCC rule as it applies to farm SPCC plans. Senator Inhofe (OK), who sponsored the amendment to delay enforcement, has already co-sponsored a bill (S. 496) with Senators Pryor (AR) and Boozman (AR) to provide more exemptions for small farms and help farms reduce compliance costs.
What should farmers do now about SPCC plans? The future of the SPCC rule is uncertain, but we do know that the current deadline of May 10 can't be enforced by the EPA. Farmers who are currently subject to the regulation must decide whether to proceed with compliance and be prepared for a possible September deadline, or wait and see if Congress changes SPCC requirements before the end of September. If a farmer is subject to an attempted enforcement action after the May 10 deadline, contact legal counsel right away. For those who have already developed SPCC plans, be assured that the plan may still be required in the future and could also be a useful tool for reacting to an oil spill that could contaminate a waterway and reducing your environmental liability risk. For more information about the SPCC rule, visit here.