VOLUME 20, ISSUE 3

MAY | JUNE 2014

A S S E T I N T E G R I T Y I N T E L L I G E N C E

HOW FACILITIES CAN BETTER ENSURE SPCC COMPLIANCE

Fe atured Article

By Kelly L ag ana , BLR

20 Inspectioneering Journal MAY | JUNE 2014

HOW FACILITIES CAN BETTER ENSURE SPCC COMPLIANCEBY: KELLY LAGANA Product Manager, BLR

Several catastrophic spills over the past few years have sparked significant interest in oil spill prevention across the industry. Not only do facilities with large amounts of oil want to pre-vent environmental damage, loss of product, and civil lawsuits, but, assuming their operations are based in the United States, they must also comply with the U.S. Environmental Protection Agency’s (EPA) Spill Prevention, Control, and Countermeasure (SPCC) regulations.

SPCC regulations require certain facilities with large amounts of oil to perform specific tasks in order to show the EPA that they are actively working to prevent leakage into U.S. navigable waters. SPCC is atypical of most environmental compliance rules because it focuses on prevention. This means that, unlike many other environmental regulations, a facility can be found in viola-tion without ever having a pollution mishap (in this case, an oil spill). It used to be (unofficially) that the EPA would inspect facil-ities for SPCC only if they had a spill, but the big spills of the past few years, such as the Deepwater Horizon, have put pressure on the EPA to audit any regulated facility in addition to those that have experienced a spill event. This increased chance of facing a random compliance inspection by the Agency has heightened industry awareness, and many owner-operators are currently evaluating the status of their SPCC compliance.

The good news is there are many benefits for companies who adopt a corporate policy to reduce preventable oil spills and invest in a well-written SPCC plan, a compliant tank inspection program, and comprehensive SPCC training for oil-handling per-sonnel. Not only does a complete program reduce your chances of an EPA enforcement action, but it significantly decreases your risk of actually having an oil spill. Keeping your oil contained in your tanks provides a good public relations opportunity by pro-moting a safer workplace and community—things customers are starting to really care about. It also reduces costs involved with loss of product.

This growing interest in compliance and available technology has prompted the development of new software tools to take the pain out of SPCC compliance and help facilities reduce regulatory risk. These new platforms can offer plan writing tools, inspection checklists, reference materials, and training from secure, cloud-based servers.

WHO IS SPCC-REGULATED?Under the Clean Water Act, approximately 650,000 facilities are required to comply with SPCC regulations found at 40 CFR 112. These are non-transportation-related facilities with a total abo-veground oil storage capacity of greater than 1,320 gallons (gal) or buried oil storage capacity greater than 42,000 gal. Because of their locations, many of these facilities are potential risks for dis-charging oil into navigable waters of the United States or adjoin-ing shorelines.

According to an EPA estimate in the Revision of Information Collection Request (ICR) for the Oil Pollution Prevention Regulation for Certain Facilities to Prepare and Maintain an Oil Spill Prevention, Control, and Countermeasure (SPCC) Plan (Final Rule) (EPA No. 0328.15, OMB No. 2050-0021), the SPCC-regulated community is mostly made up of oil production facilities (34%), farms (23%), and electric utilities (10%). The other one-third of regulated facilities is made up of about 25 different industries, including chemical and metal manufacturers, mining, and trans-portation equipment and maintenance facilities.

BIGGEST SPCC COMPLIANCE CHALLENGES AND SOLUTIONSTo meet the needs of our customers, we spent well over a year researching the market and how facilities comply with EPA’s SPCC regulations. This research included surveys of environmen-tal professionals, interviews with facility operators and environ-mental consultants, on-site facility visits, and analyses of SPCC enforcement actions and expedited settlements. From these and other efforts, we have identified what we believe are the five most challenging components of SPCC compliance that facilities often encounter. They are: 1. Writing the SPCC plan, 2. Inspecting tanks, 3. Training, 4. Staying current with the regulations and enforcement

trends, and 5. Properly reporting oil spills.

The SPCC PlanThe EPA requires a very specific format for SPCC plans. The gen-eral format they want is spelled out in the SPCC regulations at 40 CFR 112 along with some agency guidance (EPA’s SPCC Guidance for Regional Inspectors), however many regulated facilities still struggle with writing a compliant plan. The EPA strongly

Figure 1. Example: TRAC360 flowchart.Note: Approximately one-third of SPCC regulated facilities are required to

have their plans certified by a licensed professional engineer (PE) who is familiar with the facility and the plan. As per the regulations at 40 CFR 112, software alone cannot provide PE certification of plans.

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emphasizes the importance of documenting everything in your plan. For example, even if something in the regulations does not apply to your facility, it is not acceptable to just leave it out of the plan. It must clearly be stated in the plan that that section does not apply.

In an effort to reduce the burden on the lowest-risk regulated facilities, the EPA’s 2008 amendments to the SPCC regulations introduced a tiered approach to SPCC plans. No doubt the major-ity of regulated facilities benefited from less burdensome plan requirements, but the new choice of being able to write one of three different plan types (e.g., PE-certified, Tier I, or Tier II) cre-ated some confusion in the market. Facilities are now tasked with figuring out which plan type applies to them, which is a major pain point. Many facilities, particularly those from the manu-facturing industry, have opted to draft the most comprehensive version, the PE-certified plan. This way they do not run the risk of non-compliance and are guaranteed to have covered all of the required information for the EPA. For some, this negates EPA’s good intentions of reducing the burden on certain facilities.

In addition to plan type specificity, SPCC plans should be facili-ty-type specific as well. SPCC regulations spell out requirements for up to four types of facilities: offshore oil production, drilling, and workover facilities (PE-certified plans only); onshore oil drill-ing and workover facilities; onshore oil production facilities; and onshore oil storage facilities.

Buried even further in the regulations is the requirement for some SPCC-regulated facilities to have an additional Oil Spill Contingency Plan and Written Commitment of Manpower. These extra plan requirements apply only to those facilities that are not required to have a Facility Response Plan and that have determined that secondary containment is impracticable at their facility. Our analysis of recent SPCC enforcement data found missing Oil Spill Contingency Plans and Written Commitments of Manpower to be among the most common SPCC plan viola-tions, right behind not having an SPCC plan at all.

So, taking into account the possibility of three plan types, three to four facility types, and the Oil Spill Contingency Plan and Written Commitment of Manpower, a regulated facility may be required to write and maintain 1 of 24 “flavors” of SPCC plans! This break-down makes it easy to understand the challenge of properly pre-paring a SPCC plan.

Once the work process is automated into a comprehensive soft-ware platform, users can be certain that their time is optimized when writing their SPCC plan. The first step in plan writing is to answer a few short questions about the facility, as shown in Figure 2. After the interview, the application immediately presents the user with the appropriate SPCC plan for their facility. A user can then build a fully compliant SPCC plan by answering a series of straightforward questions about the facility’s layout, tanks, and planned response in the event of a spill. This information can be saved in “the cloud” and can be updated and retrieved at any time from any location. When the plan is complete, the software application should provide a paginated document with a table of contents—a highly-recommended EPA best practice—and create the required table of cross references to regulatory requirements.

Figure 2. Sample plan writer.

INSPECTING TANKSAnother significant component of SPCC compliance involves tank inspections. The EPA requires facilities to implement a via-ble tank inspection program and keep records of inspections for 3 years. The EPA does not spell out inspection requirements in their regulations; they simply require facilities to make sure their tanks are not leaking. The EPA defaults to industry standards, such as American Petroleum Institute’s (API) 653 and the Steel Tank Institute’s (STI) SP001, for guidance. The challenge for the SPCC-regulated facilities was finding inspection checklists that could be used for their tanks. Due to the variety of tanks used by facilities and the lack of guidance provided by the EPA, facilities often have a hard time compiling the correct information for their inspection checklists.

In addition, facilities can often struggle with conducting these inspections. In fact, an analysis of SPCC enforcement data found that the two most common violations of tank inspection records for onshore production facilities included: • Aboveground valves and pipelines are not examined on a

periodic basis for general condition (includes items such as flange joints, valve glands and bodies, drip pans, pipeline supports, bleeder and gauge valves, polish rods/stuffing box); and

• Visual inspections of containers, foundations, and supports are not conducted periodically for deterioration and mainte-nance needs.

We received numerous requests from regulated facilities that clearly stated, “I want to tell you what type of tank I have and I want you to tell me what my checklist should look like.” They also wanted to customize those documents to their facility specifica-tions. That is why our system includes a checklist builder appli-cation that offers PE-written and reviewed inspection checklists by tank type. No matter the industry or facility type, the appli-cation should provide a checklist that any facility can use. Tank types include: • 55-gal drums • Field-erected aboveground storage tanks (ASTs) • Loading and unloading areas • Portable ASTs • Shop-fabricated ASTs • Underground storage tank areas

TRAININGSPCC regulations require that all oil-handling personnel at a facil-ity be trained at least annually or any time the plan changes. A key component of this requirement is that the training must be facil-ity-specific. During the course of our research, we encountered

Figure 4. Example: State-Specific Spill Reporting Information Figure 3. Example: Regional Enforcement Database

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many facilities that had been cited for not meeting the facili-ty-specific requirements.

Eighty percent of regulated facilities surveyed conduct their SPCC training in-house, either by the HSE department or a train-ing department. Respondents were pretty evenly split between classroom and online training. To fulfill the facility-specific requirement with a truly effective and compliant online training course, facility walkthroughs with oil-handling personnel using the SPCC plan as a guide is needed.

Surprisingly, our research uncovered significant interest in best practice training for SPCC. For example, facility operators sug-gested that training in-house tank inspectors on how to properly inspect a tank, although not required by the regulations, was worth the investment. As one facility operator stated, “Inspecting a tank is not just filling out a form, it’s about looking at the tank!”

Facility operators also recognize the potential return on invest-ment for employee training when the EPA comes knocking to inspect their facility for SPCC compliance. During EPA inspec-tions, facilities have rights. Preparing employees properly for an EPA inspection increases the odds of a smooth inspection. In addition to the required SPCC training course, we recommend considering additional courses for best practice training covering topics such as: How to Properly Inspect Oil Tanks for SPCC and What to Expect from an EPA Inspection.

EPA IN THE NEIGHBORHOODIn 2012, the EPA conducted approximately 800 SPCC inspec-tions—shifting its SPCC program from outreach-based to inspection-based with an active enforcement presence primar-ily in EPA Regions 1, 6, and 8. Inspectors are typically based out of one of the 10 EPA regional offices. SPCC is a federal pro-gram and although the intent of the program is to enforce reg-ulations consistently among all regions, the enforcement data shows some regional trends. This is because geography and industry sectors specific to a particular region may require facil-ities to manage compliance differently. For example, Region 6 (Arkansas, Louisiana, New Mexico, Oklahoma, and Texas)

has a high concentration of oil production facilities and inspectors in that region have been finding that many plans do not address appropriate containment/diversionary structures/equipment.

As shown in Figure 3, it is very helpful that the software tool tracks EPA inspections and provides details on the enforcement actions and expedited settlements. This makes it easy for facilities to study the enforcement trends in their area and prepare accord-ingly in the event they are on the receiving end of an inspection.

REPORTING SPILLSThe EPA requires owner/operators of facilities that are responsible for oil discharges to immediately report the spill to the National Response Center (NRC) when there is a spill of a harmful quan-tity of oil. The EPA defines a “harmful quantity” as any one of the following: • The amount of oil that violates applicable water

quality standards; • Any amount of oil that causes discoloration of, or a film

or “sheen” on, the surface of the water or adjoining shore-lines; and

• Any amount of oil that causes a sludge or emulsion to be deposited beneath the surface of the water or on adjoining shorelines.

It may be difficult to determine if a spill has caused any of the circumstances described above. However, because the spills are often easily traced back to their source, if there are any doubts, facilities are strongly encouraged to report the spill according to appropriate local, state, and federal procedures.

Furthermore, the NRC may not be the only agency a facility has to notify in the event of a spill. In some instances, spills need to be reported to the state environmental agency. Every state has a different contact, reporting threshold, and timetable, and penal-ties for failure to report spills to the state can be quite high. For example, in California, failure to report an oil spill occurring in state waters (other than marine waters) can result in a criminal fine up to $50,000.

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CONCLUSIONNavigating and complying with the EPA’s SPCC regulations can be a difficult task for “any owner or operator of a non-transporta-tion-related onshore or offshore facility engaged in drilling, producing, gathering, storing, processing, refining, transferring, distribut-ing, using, or consuming oil and oil products, which due to its location, could reasonably be expected to discharge oil in quantities that may be harmful, … into or upon the navigable waters of the United States or adjoining shorelines...” A well thought out and designed software tool for SPCC can help regulated facilities overcome the most common compliance challenges by: 1. Providing the materials necessary to conduct SPCC mandated training; 2. Providing guidance on meeting state-specific reporting rules and avoiding the stiff penalties associated with delayed spill

reports; 3. Providing tank inspection checklists for any kind of storage tank in every kind of facility; 4. Asking key questions and applying the answers to an EPA-compliant, PE-approved SPCC plan template; and 5. Scanning the Federal Register daily to alert facilities of any significant changes, when they become effective, and how to update

their SPCC plan to remain in compliance. n

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