**HOLLIDAY ENVIRONMENTAL SERVICES, INC.**

**ENVIRONMENTAL ENGINEERS & REGULATORY CONSULTANTS**

P.O. BOX 2508 BELLAIRE, TEXAS 77402-2508 (713) 668-7640 FAX (713)
668-5184 E-MAIL ghh@houston.rr.com

22 June 2004

U.S. Environmental Protection Agency

EPA Docket Center

1301 Constitutional Ave., N.W.

EPA West

Suite B-102

Washington, D.C 20460

Gentlemen:

# RE: DOCKET NO. OPA-2004-0003

The following comments pertain to the Proposed Spill Prevention, Control
and Countermeasure (SPCC) Plan rule published in the Federal Register
dated 17 June 2004 at 69 FR 34013-34017.

We have read the proposed rule (69 FR 34013), previously proposed rules
(56 FR 54612, 58 FR 8874 and 62 FR 63812), and the final rule (67 FR
47042) promulgated 17 July 2002. In addition, we commented on all of the
SPCC proposals published during the decade (1991-2002) of disconnected
rule development. Further, we worked on the API Committee assisting EPA
in developing the 1973 rule, which has been one of the most successful
rules promulgated by EPA.

# Recommendation

**Careful study of the above documents, first hand knowledge of SPCC
application and considering the adverse impact the proposed rule will
have, lead us to conclude that: EPA should not promulgate the instant
proposed rule (69FR 34013-34017) as a final rule. Instead, EPA should
withdraw the final SPCC Plan rule (67 FR 47042) and rely on the 1973
SPCC rule, until EPA re-proposes the SPCC rule employing full notice and
comment rulemaking procedures.**

# Reasons Supporting the Recommendation

Our recommendation is supported by discussion of three issues directly
involved in promulgation of the instant proposed rule (69 FR 34013):

1.  The instant proposed rule results from the lack of use by EPA of a
    single notice and single comment rulemaking procedure, e.g.,
    multiple notices from 1991 to 2002

2.  The instant proposed rule is necessitated by an incorrect economic
    analysis of the impact of the revised SPCC Plan rule (67 FR 47042);
    and

3.  The proposed rule (69 FR 34013) is flawed by lack of closure
    regarding the definition of Navigable Waters.

## 1. Lack of Employing Full Notice and Comment Rulemaking Procedures

EPA caught stakeholder and other agencies by surprise by promulgating
revised 40 CFR Part 112 (67 FR 47042) after a five-year hiatus in
proposing revisions, e.g., EPA proposed revisions in 1991 (56FR 54612),
1993 (58 FR 8824) and 1998 (62 FR 63812). The final rule was promulgated
17 July 2002, without notice or announcement. Even the Small Business
Administration expressed surprise by the lack of concern exhibited by
the EPA's caviler action (See docket letter dated 10 June 2004 from
Thomas M. Sullivan and Kevin Bromberb to Thomas P. Dunne). Had the final
rule been offered for comment before being published as a final rule the
instant propose rule would not be necessary.

## 2. Incorrect Economic Analysis

These comments are made necessary because the instant proposed rule (69
FR 34013) is necessitated by the false assumption by EPA that existing
SPCC Plans are in compliance with the 1991 (56FR 54612), 1993 (58 FR
8824) and 1998 (62 FR 63812) proposed rules. The existing SPCC rule did
not require compliance with the above-proposed provisions. In addition,
the Administrative Procedures Act does not require affected persons to
comply with proposed rules until promulgation.

The assumption of compliance with the proposed rules led to an incorrect
economic analysis used in the final rule promulgated 17 July 2002 at 67
FR 47042. The basis for the economic assumption was not made public
until Hugo Paul Fleischman responded to the Holliday Environmental
Services, Inc.'s Freedom of Information (FOI) Act request dated 17
September 2002 submitted after promulgation of the 17 July 2002 final
rule. Submitting the FOI request before promulgation was rendered
impossible by lack of any formal notice to the public regarding
impending promulgation of a revised final rule (67 FR 47042).

There is neither description of the assumption used in the economic
analysis nor supported reason given by EPA in the revised final rule
preamble (67 FR 47042) for assuming any person subject to 40 CFR Part
112 would comply with the proposed rules. The only plausible reason for
making the false assumption of un-mandated compliance with the proposed
rules was to circumvent the "Un-funded Mandate Reform Act" (69 FR 34016)
requirement.

If the correct assumption had been utilized, *i.e.* that industry
complied with the then existing final SPCC rule (40 CFR Part 112), the
\$100 million limit imposed by the Act would have been exceeded and a
cost-benefit analysis would have revealed the then existing SPCC Plan
rule was satisfactory and sufficient and the 2002 final rule (67 FR
47042) was not economically justified. Refer to the 14 January 2003
analysis provided to EPA by Holliday Environmental Services, Inc. and
the 10 June 2004 Small Business Administration letter for the support of
the extremely high cost of the final rule and the magnitude of error
caused by the false assumption made by EPA in developing the economic
analysis.

## 3. No Definition of Navigable Waters

The instant proposed rule (69 FR 34016) does not provide individuals
subject to 40 CFR Part 112 the opportunity to prepare SPCC Plans for the
majority of the controlled facilities, because the definition of
Navigable Waters is in litigation. Individuals subject to the revised 40
CFR Part 112 must know what constitutes Navigable Waters to prepare SPCC
Plans for affected facilities. The instant rule (69 FR 34013) is silent
regarding the final definition of Navigable Waters. Language from at
least one United States Circuit Court (Fifth Circuit) clearly states
that the definition contained in revised 40 CFR Part 112 does not apply
in Texas, Louisiana or Mississippi (United States v Needham, No.
02-30217, 5^th^ Circuit, Dec. 16, 2003). Other circuits may adopt this
interpretation. Accordingly, the instant proposed rule places the
regulated community in the impossible position of not knowing whether
the rule applies to their facilities. Further, since the issue is in
litigation, the extent of the applicability is not known. Promulgating
the instant proposed rule (69 FR 34013) would provide no tangible relief
for the regulated community. Adopting the proposed rule would relieve
pressure from EPA, but since they are not subject to provisions of the
rule, this promulgation provides no real relief. A better solution
consists of withdrawing the revised final rule (67 FR 47042), relying on
the 1973 rule and providing the regulated community an opportunity to be
involved in rulemaking after compliance with full notice and comment
rulemaking procedures.

# Concussions

We are pleased to offer these specific recommendations and support to
EPA on this important and costly issue. EPA has the opportunity to
reduce the cost of the SPCC rule by seeking input from the regulated
community based on honest evaluation and facts. We look forward to
working with EPA on returning to the 1973 rule and submitting a
supported revised rule, which will protect the environment without
adversely impacting important and necessary economic considerations.

Very truly yours,

s/ G.H. Holliday

G.H. Holliday, Ph.D., P.E., DEE

President