Rain tank cars DT-111

Regulation Update: Crude Oil Storage in Railcars and Reopening Old Tank Farms

May 11th, 2020

As we discussed in our first post on this topic, companies are finding that the reduction in petroleum consumption by the public and commercial facilities is resulting in a lack of storage capacity for crude oil and other products during the COVID-19 crises. This reduced consumption is likely to continue well into the summer even as some states begin to reopen. Some producers are considering turning to the rail companies that normally transport these products to potentially become storage facilities in their railyards. Antea Group has been supporting shortlines in their planning efforts to bring these facilities online. With the price of refined products being depressed, several Class I railroads are also looking at reopening formerly closed tank farms to stockpile diesel at these lower rates. To accommodate both scenarios, Antea Group has reached out to the US Environmental Protection Agency (EPA) for updated guidance on establishing or reopening facilities regulated under 40 CFR 112.   

Spill Prevention Control and Countermeasure Plans for New Facilities 

In our last blog, we discussed amending existing spill prevention, control, and countermeasure (SPCC) plans to allow for the additional storage of railcars containing crude or other oils by implementing alternative secondary containment, such as active monitoring.   

However, in our discussions with the EPA, they want to once again emphasize the importance of having an SPCC plan in place before creating any “new” facilities, for example, storing oils at a railyard that does not currently have an SPCC plan. The EPA had been reviewing if the memorandum from March 26 by Susan Bodine, Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance (OECA), allows the EPA to extend the time-period for SPCC plan development during this time of crises. The agency has not yet provided guidance allowing any leeway in this requirement. At this time, there is no expectation that new facilities will be allowed to be created without having an SPCC plan in place prior to storage. 

Facility Response Plans for Railcar Storage – 60-Day Time Frame 

It does not take many railcars to trigger a facility response plan (FRP). About 30 railcars will likely take a facility over the 1-million-gallon threshold, even without any additional storage on-site. For facilities that already have an FRP, their existing plan can be supplemented to address the new storage capacity. For facilities that do not currently have an FRP but do have an SPCC plan, the EPA had been considering allowing 40 CFR 112.20(a)(2)(iv) to be invoked, thus providing the facility with up to six months to prepare an FRP in a time of crisis. At this time, the EPA no longer considers COVID-19 to be a crisis situation as companies have now had time to initiate planning efforts. Unless the company can make a very strong case that their scenario is a unique situation above and beyond the storage limitations triggered by COVID-19, they should not expect to benefit from the six-month timeframe allowed in this section. 

The EPA does understand the current pressures and has suggested reviewing 40 CFR 112.20, which allows up to 60 days to modify an existing plan due to changed conditions. If the railroad can provide the FRP coversheet as a notice to the local EPA Regional Office and demonstrate they have a contractor or other means in place to respond to a release should one occur, the EPA may allow up to 60 days to either modify an existing FRP or upgrade an SPCC plan to an FRP. 

For a new facility, please plan enough time to get an SPCC plan in place prior to any storage, provide the regional office with the coversheet and proof of contract/plan for responders. Then allow up to 60-days to develop your FRP. Any extensions beyond that time frame are likely to result in enforcement. 

Reopening Old Tank Farms – Don’t Forget the Inspections! 

Since the price of diesel has been dropping, Antea Group has received calls from facilities that had formerly closed out enough tankage to discontinue compliance with their FRP requirements. Now, these facilities are considering reopening these old tanks to stockpile fuel while they can. Should your company be considering this, you can use 40 CFR 112.20 to allow for up to 60 days to modify the FRP while you purchase fuel and begin loading it. Do not forget to update your SPCC plan within six months as well! 

Prior to filling older tanks, do not forget to have them inspected and certified either under Steel Tank Institute (STI) or American Petroleum Institute (API) standards. EPA staff are very concerned that in a rush to fill tanks at a discount, this essential step might be missed. Please remember to ensure tanks are safe before they are filled and thus avoid any expensive spillage and cleanups. 

How Antea Group Can Help 

Antea Group is helping our clients cope with this crisis by providing new FRPs and SPCC plans or plan amendments when needed.  We can also support your STI and API inspection needs. Our experts have years of experience inspecting tanks and developing these types of plans for the railroad and oil industry and would be happy to help. 

We can also provide active monitoring in lieu of secondary containment to help meet the requirements of the SPCC plans. Our Incident Management program helps our clients prevent spills from rail storage facilities and respond to them when they occur, protecting both yard staff and the public with air monitoring and product containment. 

Antea Group will continue to stay in touch with the EPA and the FRA to monitor these developments during these rapidly changing times we find ourselves in. If at any time you have questions, please reach out and ask.   

FOR ALL OF THESE SERVICES, ANTEA GROUP IS READY TO HELP. CONTACT US.

 

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