February 10, 2006
The Honorable Susan Parker Bodine
Assistant Administrator for the Office
     of Solid Waste and Emergency Response
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, D.C.  20460
Re: Spill Prevention, Control and Countermeasure (SPCC) Rule; 70
Fed. Reg..75324 (December 12, 2005); Proposed Amendments;
Qualified Facility, Oil-Filled Equipment and Other Revisions;
Docket ID No. EPA-HQ-OPA-2005-0001
Dear Ms. Bodine:
 We are submitting these comments on the proposed amendments to
the Spill Prevention, Control and Countermeasure (SPCC) rule (70
Fed. Reg. 73524, December 12, 2005).   The Office of Advocacy
supports this proposal to help alleviate substantial small
business burdens, while providing improved environmental
protection, and offers some specific suggestions for improvement.
As you know, we have worked with EPA and the affected industries
over the last several years, and look forward to providing relief
for hundreds of thousands of small entities by fall 2006.
     I. Advocacy Background
Congress established the Office of Advocacy (Advocacy) under Pub.
L. 94-305 to represent the views of small business before federal
agencies and Congress.  Advocacy is an independent office within
the Small Business Administration (SBA), so the views expressed
by Advocacy do not necessarily reflect the views of the SBA or
the Administration.  Section 612 of the Regulatory Flexibility
Act (RFA) requires Advocacy to monitor agency compliance with the
RFA, as amended by the Small Business Regulatory Enforcement
Fairness Act.1  The RFA requires federal agencies to consider the
impacts of their regulatory proposals on small entities, and
determine whether there are effective alternatives that would
reduce the regulatory burden on small entities.
On August 13, 2002, President George W. Bush signed Executive
Order 13272 that requires federal agencies to implement policies
protecting small entities when writing new rules and regulations.2
This Executive Order highlights the President's goal of giving
"small business owners a voice in the complex and confusing
federal regulatory process"3 by directing agencies to work
closely with the Office of Advocacy and properly consider the
impact of their regulations on small entities.  In addition,
Executive Order 13272 authorizes Advocacy to provide comment on
draft rules to the agency that has proposed the rule, as well as
to the Office of Information and Regulatory Affairs (OIRA) of the
Office of Management and Budget.4  Executive Order 13272 also
requires agencies to give every appropriate consideration to any
comments provided by Advocacy.  Under the Executive Order, the
agency must include, in any explanation or discussion
accompanying the final rule's publication in the Federal
Register, the agency's response to any written comments submitted
by Advocacy on the proposed rule, unless the agency certifies
that the public interest is not served by doing so.5
     II. SPCC Background
The SPCC rule is designed to prevent discharge of oil into
navigable waters of the United States, and to contain those
spills after they occur.  Facilities subject to this rule must
prepare and implement plans that prevent such discharges and
respond to spills.  The rule applies to all non-transportation
related facilities with aboveground storage capacity greater than
1,320 gallons.  This includes hundreds of thousands of small
businesses, farmers, manufacturers and electrical facilities.6
We have worked with EPA and the regulated community to identify
small business concerns and appropriate regulatory approaches.
During this period, EPA has extended the compliance date for the
July 2002 amendments in order to allow facilities to come into
compliance and to permit EPA to develop and improve the
regulations.  Advocacy issued its recommendations in June 2004
for a streamlined approach for small facilities with storage of
up to 10,000 gallons and oil-filled equipment.  This was followed
by the two Notices of Data Availability (NODA) on these topics in
September 2004.7  Commenters responded almost unanimously and
positively to the small facility and oil-filled equipment
approaches, which were intended to address these small business
problems, without diminution of the environmental benefits.  EPA
followed this with the December 2005 proposals that are the
subject of these comments.
As related in the June 2004 letter, our concerns center on the
professional engineering certification requirements, plan
requirements, integrity testing of the bulk containers, oil-
filled equipment, and asphalt.  This comment letter also
addresses three new issues: farms, airports, and oil and gas
production facilities.
     III. EPA Should Adopt the Three-Tier Small Facility Approach
from the September 2004 Notice of Data Availability
Under the proposed SPCC rule, EPA is allowing small facilities
that meet the new "qualified facility" criteria to opt out of the
requirement that their SPCC plans be certified by a professional
engineer (PE).  EPA defines a "qualified facility" as a facility
that has a total oil storage capacity of 10,000 gallons or less
and a facility that has not had a spill in the last ten years
according to the definition found in 40 CFR 112.1(b).8  The EPA
proposal is a commendable step forward in balancing environmental
protections with regulatory burdens on industry.  However, the
Office of Advocacy recommends that EPA amend the proposed SPCC
requirements for small facilities to provide additional
regulatory relief, as initially advanced by a coalition of small
business trade associations and the Office of Advocacy in 2004.9
As described in  our recommendations below, substantial
additional relief can be achieved while, at the same time,
decreasing oil spill risks through increased regulatory
compliance.
Under the Advocacy approach, currently regulated SPCC facilities
would be required to meet all substantive SPCC requirements
(e.g., secondary containment), but the formal written SPCC plan
requirement would be eliminated or revised for facilities with
smaller oil storage capacities.  The Advocacy approach divides
the regulatory community into three categories  or tiers based on
each facility's oil storage capacity.  For facilities with
capacities between 1,321 and 5,000 gallons (Tier I), EPA would no
longer require an SPCC plan.  All other facilities (Tier II
representing facilities with 5,001 to 10,000 gallons capacity,
and Tier III representing facilities with greater than 10,000
gallons capacity) would be required to prepare an SPCC plan.
However, Tier II facilities would no longer be required to have
their plans certified by a professional engineer (PE).
Advocacy's three-tier proposal was the subject of EPA's September
2004 Notice of Data Availability.10  Although some commenters
wanted to revise the Tier thresholds to encompass additional
facilities, the three-tier approach received almost universal
approval from commenters on the Notice of Data Availability
(NODA).  In the December 2005 proposed rule streamlining SPCC
requirements, however, EPA proposed the two-tier approach that is
discussed below.
1. EPA Should Replace the Two-Tier Approach with the Three-Tier
Approach and Improve Environmental Protection
EPA's proposal, like Advocacy's proposal, would also require that
all currently regulated SPCC facilities continue to be subject to
all substantive SPCC requirements.  However, this proposal sets
up two tiers for purposes of determining SPCC plan requirements.
Unlike Advocacy's proposal, EPA's proposal would not exempt any
facilities from the SPCC plan requirement.  Instead, facilities
with storage capacities of 10,000 gallons or less would no longer
be required to have their plans certified by a PE.  Under both
EPA's and Advocacy's proposals, the requirement for PE-
certification of SPCC plans would continue for all facilities
with storage capacities greater than 10,000 gallons.
In its final rule, EPA should replace the proposed two-tiered
regulatory approach with a three-tiered approach.  This
recommendation more effectively addresses the relative risks
associated with smaller storage capacity facilities.  Our
recommendation is to adopt Advocacy's June 2004 approach, which
sets-up a tiered structure based on a facility's total regulated
storage capacity as follows:
      Tier I:  1,321 to 5,000 gallon facilities - No written spill
     prevention plan required, but must implement compliance with all
     applicable substantive provisions of the rule.
      Tier II: 5,001 to 10,000 gallon facilities - Written plans
     required, but no PE-certification requirement.  Collaborative
     EPA/industry "best practices" model plans tailored to sectors
     having a significant number of similar small facilities.
      Tier III: 10,001 gallon and above facilities - Written PE-
     certified plans.
Advocacy urges the Agency to exempt one tier of small facilities
from the SPCC plan requirement, and to allow larger small
facilities the option of using a standardized SPCC plan, designed
for their industry.  The three-tier scheme produces substantial
cost savings, and could improve environmental effectiveness.
Furthermore, there are several additional reasons favoring the
three-tier approach addressed below.11
 Table 1.  Comparison of Advocacy and EPA SPCC Plan Requirement
                            Proposals
 Storage Capacity         Advocacy                 EPA
     (gallons)
  1,321 to 5,000        No SPCC plan       SPCC plan without PE
                                              certification
  5,001 to 10,000   SPCC plan without PE
                        certification
Greater than 10,000       SPCC plan with PE certification
As identified in Table 1 above, the difference between the two
approaches is that no plan is required for small facilities under
5,001 gallons in the Advocacy plan.  Although the Advocacy
proposal received almost universal approval from NODA commenters,12
EPA rejected this approach in the preamble with a very brief
statement that commenters did not explain how compliance could be
ensured without a plan:  "the Agency believes that without the
owner/operator developing a Plan or documentation on how the
facility will comply with the SPCC requirements, it will be
challenging for the facility to both meet the substantive
requirements., as well as provide documentation to the regulators
that the facility is in compliance" (70 Fed. Reg. 73524, 73533,
December 12, 2005).  However, EPA's rationale for rejecting
Advocacy's proposal is unconvincing.  Facilities that comply with
EPA's underground storage tank and hazardous waste rules do so
without formal plans.  Further, the addition of a compliance
checklist suggested recently by some small business groups, could
adequately address EPA's concerns.
Based on an analysis of the Advocacy approach performed by E. H.
Pechan & Associates (Pechan), estimated total cost savings from
Tier I facilities is $390 million and estimated total cost
savings from Tier II facilities is $83 million (Pechan, 2006).
This approach would save $473 million over the current
requirements (Pechan, 2006).  Further, the Advocacy approach
saves an additional $130 million over the EPA proposal, not an
insignificant expenditure.  These estimates reflect assumptions
that 60 percent of Tier I and II farm facilities do not comply
with current SPCC plan requirement and that 30 percent of such
nonfarm facilities are noncompliant.13  The farm noncompliance
rate reflects the fact that 61 percent of 858 farmers surveyed by
the U.S. Department of Agriculture were not aware of SPCC
requirements (USDA, 2005).  As such, this is a conservative
estimate as there is surely an additional percentage that is
aware of SPCC requirements, but does not have an SPCC plan.  In
lieu of information on the noncompliance percentage for nonfarm
facilities, Pechan assumed noncompliance at half the rate
estimated for the farm sector.  At the same time, Advocacy agrees
with EPA that "to the extent that the rule increases the
compliance rate by lowering compliance costs, the proposal will
have a positive impact on environmental quality" (EPA, 2005 at
6).
a. Analysis of the Oil Spill Data Supports the Adoption of the
Three-Tier Scheme
In its own analysis of a 1995 survey of oil storage facilities,
EPA noted that "facilities with larger storage capacity are
likely to have a greater number of oil spills, larger volumes of
oil spilled, and greater cleanup costs" (EPA, 1996).  Facilities
with smaller storage capacity tend to have smaller tanks or
pieces of equipment in relatively simple configurations compared
to large oil storage facilities with a network of tanks,
equipment, and transmission pipes.14  Smaller spills are also more
likely to be absorbed in place and removed than larger spills.
Because the risk of reaching navigable waters is lower for small
facilities, and because SPCC plans alone have not been
demonstrated to reduce the oil spill risk to the environment, a
cost-effective approach to reducing risk should address ways to
reduce the cost of SPCC plan development for facilities with
smaller storage capacities.
Based on an analysis of EPA survey data (Pechan, 2006),
facilities with between 1,321 and 5,000 gallons of storage
capacity represent 0.3 percent of the total volume of oil spilled
(see  Table 2).  As indicated by the EPA data, the average per
facility spill volume for these facilities is approximately 1.6
gallons.  EPA's SPCC regulatory analysis estimates that there are
more than 235,000 Tier I facilities (EPA, 2005).  Given the
average facility spill volume and the fact that EPA has been
unable to conclude that spill prevention plans lead to spill
reductions,15 it is difficult to assert that the theoretical spill
reduction benefits of SPCC plan development will outweigh the
substantial cost of plan development for such a large number of
very small facilities.  Assuming an average small facility plan
cost of $3,000,16 the total cost of the SPCC plan requirement is
estimated at $705 million.  Spreading this cost over a ten year
period, and comparing projected total spill volumes over this
period, the cost-effectiveness of total potential spill
reductions for Tier I facilities is estimated at $184 per gallon.
Facilities with storage capacities of between 5,001 and 10,000
gallons account for approximately 2 percent of all oil spilled
(Pechan, 2006).17  An analysis of the available EPA data indicates
that the average facility with between 5,001 and 10,000 gallons
of storage capacity spills 27.3 gallons of oil (EPA, 1996).18
EPA's SPCC regulatory analysis indicates that there are 86,018
Tier II facilities (EPA, 2005).  Because Tier II facilities
represent a significantly higher per facility spill volume and a
significantly lower facility count, the theoretical cost-
effectiveness of an SPCC plan would be considerably higher for
these facilities than Tier I facilities.  Using analogous
assumptions to those used above, the cost-effectiveness of total
potential Tier II facility spill reductions is estimated at
$10.98 per gallon.  Erring on the side of environmental
protection,  Advocacy recommends that EPA require that Tier II
facilities prepare SPCC plans.  However, the theoretical cost-
effectiveness for these facilities will be considerably lower
than for facilities with storage capacities above 10,000 gallons,
which have average per facility spill volumes of 2,372 gallons,
and fewer facilities than Tier II.19  Therefore, Advocacy
recommends that SPCC plans for facilities with between 5,001 and
10,000 gallons of capacity not require PE certification.  The
removal of the SPCC plan PE certification requirement for these
facilities is estimated by EPA to result in average savings of
$2,000 for new plans and $750 for plan amendments (EPA, 2005).
 Table 2.  Comparison of Facility and Spill Volume Estimates by
                        Storage Capacity
             1,321 to 5,000  5,001 to 10,000      Greater than
                gallons          gallons         10,000 gallons
% of              38.1             13.9               48.0
Facilities
% of Spill        0.3              2.0                97.6
Volume
b. Tier II Facilities Do Not Need A Professional Engineer to
Design and Implement a Plan
Tier II facilities are unlikely to need the services of a PE to
prepare an effective SPCC plan because they typically have simple
storage tank layouts with tanks that are not interconnected,
which both reduces the likelihood of a significant spill and
simplifies spill prevention planning.  A model "best practices"
plan can be developed through collaborative efforts between EPA
and the potentially impacted/regulated industries, including
industry trade associations that employ PEs.20  This approach has
proved successful under EPA's small quantity generator hazardous
waste, underground storage tank, and Clean Air Act section 112(r)
accidental release regulatory programs.  For example, new car
dealers currently implement small quantity generator
requirements, which include similar tank maintenance and
inspection requirements, without a PE.  While we do not expect
new car dealers to be able to draw up their own SPCC plans,
dealerships will not need a PE to implement model plans that have
been drawn up by PEs for their use.  In other words, merely
because a car dealership cannot design secondary containment
around its outside diesel tank, doesn't mean that it is unable to
follow directions as to how to build and maintain concrete
barriers around its tanks.
c. The Three-Tier Plan Provides an Incentive to Reduce
Unnecessary Storage and Expands the Availability of Professional
Engineers for Larger Facilities
The inclusion of storage capacity-based exemptions from all or
certain SPCC plan requirements is likely to cause facilities to
reduce or eliminate unnecessary oil storage.  In these cases, the
facility benefits in terms of reduced compliance costs, while the
public benefits from reduced environmental risks from oil spills.
Eliminating or reducing the SPCC plan requirements for small
storage capacity facilities will also result in the beneficial
side effect of improving the quality and lowering the costs of
plans for larger facilities as reduced demand for PEs will result
in greater availability of qualified PEs.
d. The Checklist Approach Will Assure Compliance with Applicable
Regulations
The heart of EPA's rejection of the three-tier approach is the
AgencyEPA's fear that firms would not know how to comply with the
regulations without a plan.  Besides the fact that this is
performed by millions of small firms already for a variety of
other EPA rules, EPA could choose to require that facilities
maintain a single page checklist developed by the Agency to
ensure compliance with the relevant requirements.  We recommend
that Tier I facilities be required to provide a one-time self-
certification via a checklist that the facility:  (1) ) has
conducted required periodic visual inspections of their storage
tanks; (2) has complied with EPA's secondary containment
requirements; and (3) has prepared an appropriate contingency
plan to address the facility's planned response to a spill event.
This checklist will provide EPA with documentation that the
facility is in compliance with SPCC requirements and fully
addresses EPA's expressed concern with the three-tier scheme.21
e. Alternatively, EPA Could Adopt the Proposed Two-Tier Scheme
As a less preferred alternative, Advocacy recommends that EPA
adopt its proposed two-tier scheme.  This does have most of the
advantages discussed above for the three-tier scheme, and adds
the requirement of a plan for Tier I facilities.  Therefore, it
adds some cost and complexity for the Tier I facilities compared
to the three-tier alternative, but it unquestionably is a
substantial improvement over the current scheme, and would be
welcomed by many small business facilities.  EPA needs to
seriously consider whether a checklist scheme would adequately
substitute for its plan requirement.  Further, if EPA retains its
two-tier proposal, the agency should consider eliminating the
site visit and facility diagram requirement from the very
smallest (i.e., Tier I-under 5,001 gallons) facilities, as a
means of reducing the cost and complexity of the two-tier EPA
scheme.
2.  EPA Should Eliminate the Spill History Requirement or Limit
Requirement to Three Years
EPA adopted the ten-10 year spill history requirement from the
Utility Solid Waste Activities Group (USWAG)'s proposal for
addressing oil-filled equipment.  As USWAG explains in its
comments to be filed on this proposal, this approach is truly not
applicable to small facilities.  Advocacy has received
substantial adverse feedback from the small business associations
on this requirement, which was not part of Advocacy's original
small facility scheme.  At a minimum, EPA should reduce the
current ten-10 year spill history requirement for small
facilities to 3 years.   EPA should consider a shorter time-frame
because unlike oil-filled equipment, which is often
owned/operated by large firms (e.g., utilities), compiling and
documenting a small facility's spill history for such a lengthy
time-frame can represent a substantial burden.  Furthermore,
recordkeeping for SPCC purposes is required only for a three-
year period.  Under the Office of Management and Budget (OMB)'s
paperwork policy, recordkeeping requirements in excess of three
years may be mandated only in exceptional circumstances.  This
provision does not warrant this level of burden.
Therefore, Advocacy recommends that EPA revise the no-spill
criterion to cover only the preceding three- year period.  This
shorter time-frame is appropriate because:  (1) OMB policy
generally only requires recordkeeping for this period; (2) the
lengthier period would penalize small facilities that have
successfully implemented recent spill prevention measures in
response to earlier spill incidents; and (3) evidence indicates
that small facility spills are of much lesser volumes.  EPA
should set less stringent standards that recognize the lower
environmental risk of smaller facilities.  Further, as the
current SPCC rule provides, Regional Administrators have the
flexibility to impose additional requirements on any facility, as
needed.
In addition, because the purpose of the SPCC is to reduce the
environmental harm from oil discharges that reach navigable
waters, EPA should clarify that the spill history requirement
pertains only to spills that actually reached navigable waters.
3. Revise Integrity Testing Requirement
EPA is proposing to allow owners and operators of qualified
facilities to rely on industry standards to determine the type
and frequency of integrity testing required for a particular size
storage container and configuration. The Agency proposes  to
allow qualified facilities to make this determination in
accordance with industry standards without the need to develop a
PE-approved environmentally equivalent deviation, as is currently
required under 112.7(a)(2).  In the proposed SPCC regulation,
EPA cites the Steel Tank Institute's SP001 as an example of a
relevant industry standard.
The current SP001 standard allows periodic visual inspections for
shop-fabricated aboveground storage tanks with a total capacity
of 5,000 gallons, and for which there is spill control and a
continuous release detection method (i.e., Category 1 tanks).
Advocacy recommends that EPA permit qualified facilities to
conduct periodic visual inspections for shop-fabricated
aboveground storage tanks that have an oil storage capacity up to
10,000 gallons.  This recommendation is appropriate because of
the small risk of an oil spill reaching navigable waters due to
the SP001 standard requiring that the relevant tanks have a
continuous release detection method and secondary containment.
Advocacy also believes that this revision will enhance the
understanding of SPCC regulatory requirements, and, therefore,
increase regulatory compliance by making the visual inspection
applicability determination based on the same storage capacity
threshold as used in defining a "qualified facility."
With these proposed revisions, EPA will effectively address the
reality of the low compliance rate among small facilities by
creating a practical approach that enhances environmental
protection by increasing small facility SPCC regulation
compliance.
  IV. Advocacy Supports Proposal to Allow Facilities to Employ
 Contingency Planning In Lieu of Secondary Containment for Oil-
                        Filled Equipment
EPA proposes to amend the SPCC regulations to provide a
definition of oil-filled operational equipment and an optional
alternative to the general secondary containment requirements for
oil-filled operational equipment that meets certain qualifying
criteria (hereafter referred to as "qualified oil-filled
operational equipment").  In lieu of providing secondary
containment, the proposal would allow facilities with qualified
oil-filled operational equipment to have the alternative of
preparing an oil spill contingency plan and a written commitment
of manpower, equipment and materials to expeditiously control and
remove any oil discharged that may be harmful, without having to
make an individual impracticability determination as required in
section 112.7(d).  The facility would also be required to
establish and document an inspection or monitoring program for
the qualified oil-filled operational equipment to detect
equipment failure and/or a discharge.
In an effort to clear up past confusion about SPCC applicability,
EPA's proposed rule offers the following definition for oil-
filled operational equipment as:
     ".equipment which includes an oil storage container (or
     multiple containers) in which the oil is present solely
     to support the function of the apparatus or the device.
     Oil-filled operational equipment is not considered a
     bulk storage container, and does not include oil-filled
     manufacturing equipment (flow-through process)" (70
     Fed. Reg. 73524, 73550, December 12, 2005).
Under EPA's proposal, to be considered as qualified oil-filled
operational equipment, a facility must consider the equipment's
reportable discharge history.  The qualified oil-filled
operational equipment criteria specifically requires that the
facility had no discharges as described in section 112.1(b) from
any oil-filled operational equipment in the ten years prior to
the SPCC Plan certification date, or, if the facility has been in
operation for less than ten years, since becoming subject to 40
CFR part 112 (70 Fed. Reg. 73524, 73533, December 12, 2005).
The EPA economic analysis finds that using the alternative to the
current regulation's secondary containment requirements results
in annual per-facility cost savings of $9,000 to $61,000 for new
facilities, depending on a facility's size and other
characteristics (EPA, 2005).  EPA estimates that this provision
would reduce compliance costs by as much as $56.7 million and
$45.9 million per year, discounted at 3 percent and 7 percent,
respectively.  These estimates reflect the difference between the
cost of secondary containment and the cost of preparing a
contingency plan and a written commitment of manpower, equipment
and materials for the projected annual number of new electric
utility sector facilities with qualifying equipment.22
EPA's proposal is based in large part on the USWAG scheme that
was the subject of EPA's oil-filled equipment NODA,23 which
included the requirement that the oil-filled equipment not be
subject to any spills within the last ten years or within the
time period the facility has been subject to the SPCC rule.
EPA's proposed approach is justified because of the lower risk
posed by qualifying oil-filled equipment.
There are a number of characteristics that make oil discharges
from oil-filled electrical equipment a lower risk for
environmental harm than discharges from bulk storage tanks.
These features include:
       Equipment is constructed using heavier and more corrosion
        resistant steel and is built to resist greater pressure
        differentials than tanks;
       Thorough equipment pre-installation testing and frequent
        inspection during use (e.g., utilities typically conduct
        monthly inspections and periodic testing of equipment);
       Dielectric fluid is generally mineral oil, which is far
        less toxic than more conventional petroleum products;
       Oil is much less frequently added/removed than with tank
        storage;24
       Equipment is self-monitoring - a loss of dielectric fluid
        leads to equipment failure and an interruption in
        transmission of electrical power.  The equipment at
        electrical substations is also typically equipped with
        remotely monitored low level and high temperature alarms;
        and
       Substation electrical equipment is typically surrounded
        by a gravel bed.  In addition to fire safety benefits of
        this design, the gravel beds provide a significant
        restriction to movement of any oil that may be released,
        further reducing the probability of a Section 112(b)
        discharge (USWAG, 20034).
The strongest evidence that electrical equipment poses a low risk
to navigable waters is the historical evidence indicating
extremely infrequent discharges to water.  The 1991 estimate of
the number of discharges to navigable waters from the two million
pieces of electrical equipment at nearly 50,000 substations was
10 to 15 per year, and most of these discharges involved very
small quantities of oil.25  By contrast, when EPA's 1988 SPCC Task
Force reported on oil discharges into navigable waters from fixed
tank facilities, it reported that there were 3,000 reported
discharges in 1987, some of which involved tens or hundreds of
thousands of gallons.26
EPA's new proposal takes these properties of oil-filled operating
equipment into account and allows "qualified oil-filled
operational equipment" to implement alternatives to the SPCC's
secondary containment requirements.  EPA defines qualified oil-
filled operational equipment as equipment that has "no 112.1(b)
discharges from any oil-filled operational equipment in the 10
years prior to the SPCC Plan certification date, or since
becoming subject to 40 CFR part 112 if the facility has been in
operation for less than ten years."  70 Fed. Reg. 73524, 73533,
December 12, 2005.  Facilities that meet these criteria will be
able to avoid secondary containment requirements if they:  (1)
prepare an oil spill contingency plan consistent with Part 109
and a written commitment to expeditiously control and remove any
quantity of oil discharged that may be harmful; and (2) develop
and document an appropriate inspection and monitoring program.
Advocacy fully supports EPA's proposed revisions because of the
relatively insignificant risks associated with oil-filled
operating equipment.
     V. EPA Should Exempt Motive Power Containers from SPCC
EPA has proposed to exempt motive power containers from
regulation.  For the purposes of identifying SPCC applicability,
EPA's proposed SPCC rule amendments define motive power
containers as "onboard bulk storage containers used solely to
power the movement of a motor vehicle, or ancillary onboard oil-
filled operational equipment used solely to facilitate its
operation" (70 Fed. Reg. 73524, 73538, December 12, 2005).
Motive power, therefore, generally refers to oil stored in
tractors, forklifts, mobile cranes, and other mobile equipment
for use by that equipment.27   We support this proposed revision.28
In the preamble to the proposed SPCC rule, EPA notes that motive
power storage (if 55 gallons or more storage capacity) could
previously have been considered subject to SPCC jurisdiction (70
Fed. Reg. 73524, 73538, December 12, 2005).  The agency further
notes that it "never intended to cover motive power containers on
buses, sport utility vehicles, small construction vehicles,
aircraft and farm equipment, or facilities or locations such as
heavy equipment dealers, commercial truck dealers, or certain
parking lots .solely because of the presence of motive power
containers.  Nor does EPA intend to require facilities otherwise
subject to the SPCC rule to include motive power containers in
their Plans." Id.  However, EPA is now proposing to exempt all
motive power containers from SPCC requirements, and to exclude
the storage capacity of motive power equipment from a facility's
total storage calculation for purposes of determining SPCC
applicability.29  The Agency has properly determined that it is
not practicable to require containment around vehicles that
regularly move about a site.  In addition, we would expect that
the great majority of such containers are regulated by other
agencies, such as the Department of Transportation (for
vehicles), and local fire code requirements.  Duplicative
regulation is unnecessary.  Advocacy welcomes the Agency's move
to exempt motive power containers from SPCC requirements.  With
respect to long term changes, we believe EPA should also examine
exemptions for an expanded version of motive power, specifically,
fixed equipment that has moving arms, such as cranes at
construction sites.  It may not be very practicable to establish
secondary containment for large fixed cranes, for example.
  VI. EPA Should Expand the Proposed Relief for Airport Mobile
                            Refuelers
For the purposes of SPCC applicability, EPA defines an airport
mobile refueler as "a vehicle with an onboard bulk storage
container designed for, or used to, store and transport fuel for
transfer into or from an aircraft or ground service equipment"
(70 Fed. Reg. 73524, 73540, December 12, 2005).  Under the
proposed SPCC rule, EPA would replace the existing sized
secondary containment requirements for such refuelers with
general secondary containment requirements.30  These requirements
apply to refuelers at all times.
The airport community has raised security, safety, and logistical
concerns with applying SPCC secondary containment requirements to
airport mobile refuelers.  It is likely thatSecurity concerns are
raised by the likelihood that parked refuelers will be clustered
together in secondary containment areas when not in use, raising
security concerns.  There also would be Logistical concerns focus
on an increased mobile refueler traffic that would occur when not
in use as refuelers travel to secondary containment areas,
raising logistical concerns.  Further, the additional movement
would lead to a rise in accidents, and thereby, more, rather than
less, oil spills.
It is important to note that there are current Federal Aviation
Administration (FAA) regulations that effectively reduce the risk
of oil spills from airport mobile refuelers.31  In addition, EPA's
own Storm Water Pollution Prevention Plan program is designed to
ensure that pollutants, such as oil and grease, are not
transported off-site by storm water.  Furthermore, a recent study
indicates that larger airports tend to rely on aircraft refueling
using hydrants, rather than mobile refuelers (Abt, 2004).  Given
this latter fact, and because other regulations effectively
reduce oil spill risk, it is difficult to imagine that SPCC
secondary containment requirements are also needed to reduce oil
spill risks when aircraft are not actively being refueled by
airport mobile refuelers.
Although the EPA proposal for unsized containment may be helpful,
considerable concern still remains about the security, safety and
logistical concerns.  The Abt report prepared for the agency
noted that sized containment was not a common practice, and it is
unclear how an unsized requirement would ease compliance.  EPA's
suggestion that active measures could be used instead of
permanent curbing, we suspect, would be ineffective when the
personnel are not present near the mobile refueler, as when the
tanker is inactive.32  Advocacy recommends that EPA revise the
SPCC's secondary containment requirements so that they apply only
when an airport mobile refueler is actively transferring fuel.
Even the Agency admits that the fuel transfer is the primary time
when oil releases have occurred, and the Agency has provided no
data to confirm that spills need to be addressed outside this
activity.  This revision will address the valid safety, security,
and logistical concerns of the airport community and be more
commensurate with the level of risk of airport mobile refueler
oil spills reaching navigable waters.
VII. EPA Should Extend the Compliance Date for Farms and Complete
                           Farm Study
We support an extension of time for compliance for all farms.
The March 2005 USDA study shows that there is a substantial lack
of knowledge about the SPCC requirements at farms and a
substantial cost burden imposed by the rule.    It is not clear
that hundreds of thousands of farms with small unconnected tanks
that are miles apart should be treated the same as all other SPCC
facilities.  Thus, EPA's plan to specifically identify the
frequency and causes of oil spills at farms, and the
environmental impact of such dischargers is warranted.   We look
forward to fashioning regulations that fit the oil spill problems
identified in actual data from farms, rather than addressing
farms just as any other SPCC facility.
VIII. EPA Should Adopt Special Relief for Oil and Gas Production
                 Facilities in Future Rulemaking
EPA's proposed SPCC rule does not adequately address the unique
characteristics of the oil and gas (O&G) production industry.  In
particular, EPA's proposal does not provide sufficient relief to
thousands of low risk small O&G facilities, applies overly
burdensome secondary containment requirements to O&G flowlines
and gathering lines, and improperly excludes produced water from
the rule's wastewater exemption.  The following discusses SPCC
revisions for the O&G industry that EPA should consider in a
future rule.33
1.  Develop Industry-Specific Qualified Facility Thresholds for
O&G Producers
While EPA's proposed qualified facility SPCC amendments provide
SPCC plan relief to hundreds of thousands of small facilities,
they do not provide relief for a significant number of O&G
producers.  In particular, the qualified facility 10,000 gallon
threshold criterion excludes hundreds of thousands of small O&G
producing facilities that collectively represent a minimal risk
for discharge.34  Furthermore, most such facilities are in remote
locations that are not near navigable waters.
Independent O&G production facilities are generally operated by
small entities, which are similar to family farms.  Many O&G
producing facilities include surplus storage capacity because
tanks were sized for early peak oil or condensate production.  As
production fields mature over time, production rates decrease and
produced water volumes increase.  The surplus capacity is left in
place because tank removal is costly, and the salvage value is
low.  As a rule of thumb, independent wells are provided with
three or four 300-barrel (12,600 gallon) or 400-barrel (16,600
gallon) tanks that can store oil and produced water on an
interchangeable basis if production is less than anticipated.
The O&G industry views the 2002 amendments as a substantial
change from previous SPCC requirements.  Small production
facilities, and particularly the marginal well operations,
operate at very small profit margins, like other small facilities
subject to the 10,000 gallon threshold.  The industry asserts
that additional costs imposed by the 2002 rule will result in
early plugging of wells.  Given that domestic oil and natural gas
production is currently being challenged to meet critical
domestic demand, EPA should more fully consider devising
qualifying facility criteria specific to this sector.  The
Independent Petroleum Association of America (IPAA) suggests that
all O&G facilities associated with marginal wells, as well as
facilities with non-marginal wells of up to 50,000 gallons
storage capacity be provided qualifying facility status.35  EPA
should seek to reduce the SPCC plan requirement burden on these
facilities given their low risk to navigable waters and
precarious financial condition.  The IPAA specifies a three-tier
approach to applying SPCC plan requirements in its comments on
EPA's 2004 NODA.36
2.  Address Impracticality of Secondary Containment Around
Flow/Gathering Lines
In addition to better defining the qualifying facility approach
with respect to small O&G facilities, EPA should also address the
potential high cost and impracticality of secondary containment
around flowlines and gathering lines.  Although there are no
apparent data that support the need for secondary containment, it
is clear that this requirement will create a significant
disturbance to surrounding lands.  According to information
provided by IPAA, flow/gathering lines are often located on
agricultural lands.  Requiring secondary containment for all
flow/gathering lines will certainly disrupt agricultural
productivity and compromise agricultural equipment safety.  One
recommendation that EPA should consider is allowing similar
alternatives to secondary containment as those that EPA has
proposed for oil-filled operational equipment (i.e., establish an
inspection or monitoring program to detect equipment failure
and/or a discharge; and prepare an oil spill contingency plan,
and a written commitment of manpower, equipment and materials to
expeditiously control and remove any discharged oil that may be
harmful).
3.  Allow Wastewater Exemption for Produced Water Tanks
Another concern that is unique to the O&G sector is that the
current rule does not allow the use of the SPCC rule's wastewater
exemption for produced water.37  Because produced water storage
tanks contain de minimis quantities of oil that do not represent
a significant risk for environmental harm to navigable waters,
the IPAA recommends that EPA specify that O&G equipment used to
treat produced water is subject to the rule's current wastewater
exemption.  The SPCC rule currently singles out O&G water
separation facilities for an increased level of regulation
relative to other sectors using similar or nearly identical
technologies and treatment goals.  The rule subjects hundreds of
thousands of produced water vessels to burdensome secondary
containment requirements that are unnecessary given the
incidental amounts of oil they contain and the very small
environmental risks they represent.  EPA should revise the
current rule so that produced water receives the same SPCC
exemptions that are afforded to wastewater in other industry
sectors.
     IX. EPA Should Address Asphalt in Future Guidance or Future
Rulemaking
An additional major issue that warrants relief is the exclusion
of asphalt cement and hot-mix asphalt from all SPCC-related
requirements.38  This was addressed earlier in some detail in our
June 2004 letter. It has long been recognized that the storage of
liquid asphalt cement and hot-mix asphalt is not a significant
threat to U.S. waters.  Advocacy had recommended that asphalt
cement and hot-mix asphalt not be subject to any SPCC
requirements in that letter.  More specifically, we recommended
that EPA (1) eliminate asphalt cement and hot-mix asphalt from
the calculation of the 1,320 gallon site-based threshold, and (2)
eliminate all requirements relating to the asphalt cement and hot-
mix asphalt containers and silos.
Another approach would be for EPA to draft guidance that would
advise facilities to rely on active measures to stop any spill
from reaching navigable waters, instead of the more expensive
measures such as secondary containment.  Revising the guidance
would help alleviate the problem for facilities handling asphalt.
  VIII. Conclusion
We are very pleased to have been able to work closely with EPA in
developing these recommendations, and congratulate the agency on
its excellent proposal.  We have heard directly from the small
business community that improving the SPCC program is a very high
priority.  EPA has the opportunity to reduce the costs of the
SPCC rule by hundreds of millions of dollars, increase compliance
with the SPCC rule requirements and focus efforts on measures
that will prevent more oil spills reaching navigable waters.  We
look forward to working with the agency on promulgating this rule
in late 2006 and completing other future regulatory improvements.
Thank you for your consideration and please do not hesitate to
contact me or Kevin Bromberg of my staff at 202-205-6964 or
kevin.bromberg@sba.gov.
                    Sincerely,
                    Thomas M. Sullivan
                    Chief Counsel for Advocacy
                    Kevin Bromberg
Assistant Chief Counsel
VIII. Conclusion
We are very pleased to have been able to work very closely with
EPA over the recent years in developing these recommendations,
and congratulate the agency on its excellent proposal.  We have
heard directly from the small business community that improving
the SPCC program is a very high priority.  EPA has the
opportunity to reduce the costs of the SPCC rule by hundreds of
millions of dollars, increase compliance with the SPCC rule
requirements and focus efforts on measures that will prevent more
oil spills reaching navigable waters.  We look forward to working
with the agency on promulgating this rule in late 2006 and
completing other future regulatory improvements.   Thank you for
your consideration and please do not hesitate to contact me or
Kevin Bromberg of my staff at 202-205-6964 or
kevin.bromberg@sba.gov.
Sincerely,
                    Thomas M. Sullivan
                    Chief Counsel for Advocacy
                    Kevin Bromberg
Assistant Chief Counsel
Enclosures:  "Proposed Reforms to the SPCC Professional Engineer
Certification Requirement: Designing a More Cost Effective
Approach for Small Facilities" (June 2004) by Jack Faucett
Associates for the Office of Advocacy under contract SBAHQ-00-D-
006, available at http://www.sba.gov/advo/
Pechan, 2006:  E.H. Pechan & Associates, Inc. "Proposed Reforms
to Spill Prevention Control and Countermeasures (SPCC)
Regulations, Technical Memorandum," prepared for U.S. Small
Business Administration, Office of Advocacy, Durham, NC.
February 2006.
cc w/o enclosure:
Donald Arbuckle, Acting Administrator, Office of Information and
Regulatory Affairs, OMB
REFERENCES
69 Fed. Reg. 56184:  Federal Register, "Oil Pollution Prevention
     and Response; Non-Transportation-Related Onshore and
     Offshore Facilities," Vol. 69, pg. 56184, September 20,
     2004.
70 Fed. Reg. 73524:  Federal Register, "Oil Pollution Prevention;
     Spill Prevention, Control, and Countermeasure Plan
     Requirements-Amendments, Proposed Rule," Vol. 70, pg. 73254,
     December 12, 2005.
Abt, 2004:  Abt Associates, Inc.  "Results of Research Project on
     Airport Engineering and Construction Firms," Bethesda,
     Maryland.  November 2004.
EPA, 1996:  U.S. Environmental Protection Agency, "Analysis of
     the Effectiveness of EPA's SPCC Program on Spill Risk,"
     Office of Emergency and Remedial Response, Washington, DC.
     1996.
EPA, 2005:  U.S. Environmental Protection Agency, "Regulatory
     Analysis for the Proposed Revisions to the Oil Pollution
     Prevention Regulation (40 CFR Part 112)," Office of Solid
     Waste and Emergency Response, Office of Emergency
     Management, Washington, DC.  November 2005.
EPA, 2006:  U.S. Environmental Protection Agency, "Initial Survey
     Analyses:  Question by Question Analysis," accessed from
     http://www.epa.gov/oilspill/pdfs/partb.pdf on January 31,
     2006.
Pechan, 2006:  E.H. Pechan & Associates, Inc. "Proposed Reforms
     to Spill Prevention Control and Countermeasures (SPCC)
     Regulations, Technical Memorandum," prepared for U.S. Small
     Business Administration, Office of Advocacy, Durham, NC.
     February 2006.
USDA, 2005:  U.S. Department of Agriculture, "Fuel/Oil Storage
     and Delivery for Farmers and Cooperatives," Rural
     Development, Cooperative Services Program, Washington, DC.
     March 2005.
USWAG, 2003:  Utility Solid Waste Activities Group, "Explanation
     Of Proposed Amendment To SPCC Rules To Address The
     Requirements For Onshore Oil-Filled Electrical Equipment,"
     March 14, 2003.
_______________________________
1  Pub. L. No. 96-354, 94 Stat. 1164 (1980) (codified at 5 U.S.C.
 601-612) amended by Subtitle II of the Contract with America
Advancement Act, Pub. L No. 104-121, 110 Stat. 857 (1996). 5
U.S.C.  612(a).
2  Exec. Order. No. 13272  1, 67 Fed. Reg. 53,461 (2002).
3  White House Home Page, President Bush's Small Business Agenda,
(announced March 19, 2002) (last viewed February 8, 2006)
<http://www.whitehouse.gov/infocus/smallbusiness/regulatory.html>
.
4  E.O. 13272, at  2(c).
5  Id. at  3(c).
6 Spill Prevention Control and Countermeasure (SPCC) Issues,
Alternatives and Recommendations (Draft Version 4), (September
2003) by Jack Faucett Associates for the Office of Advocacy under
contract SBAHQ-00-D-006 at 8.
7 69 Fed. Reg. 56182, 56184, September 20, 2004.
8 Or, has never had a spill when a facility has been in operation
for less than ten years.
9 Letter from Douglas Greenhaus, National Automobile Dealers
Association et al., to David Evans, U.S. Environmental Protection
Agency, "Re:  Small Facility Alternative to Professional Engineer
Certification," January 20, 2004; and Letter from Thomas M.
Sullivan, and Kevin Bromberg, U.S. Small Business Administration,
to Thomas P. Dunne, U.S. Environmental Protection Agency, "RE:
Spill Prevention, Control and Countermeasure (SPCC) Rule; 67 Fed.
Reg. 47042 (July 17, 2002); Recommendation for Adoption of
Interim Final Rule," June 10, 2004.
10 69 Fed. Reg. 56182, September 20, 2004.
11 In addition, we should note that Advocacy recently received an
unusually high number of telephone calls from the small business
community about their strong support for Advocacy's scheme over
the EPA proposal.  This highlights the importance to the small
business community of making this modification.
12 In Pechan's review of the NODA comments, it found widespread
support from the regulated community, and no opposition from
environmental or public interest groups.  The only opposition
Pechan we found was from trade groups representing professional
engineers and from individual professional engineers.
13 EPA agrees that noncompliance exists, but does not estimate the
noncompliance rate:  "EPA does recognize, however, that there is
non-compliance with the SPCC requirements by some portion of the
regulated community" (EPA, 2005 at pg. 8).
14 An example of this type of facility is a quick oil change
service facility.
15 Based on an analysis of survey data collected from facilities
subject to SPCC regulation, EPA was unable to conclude that the a
written spill prevention (or spill response) plan is effective in
minimizing oil spill risk to the environment (EPA, 1996).
However, EPA was able to conclude that other specific spill
prevention/control measures (e.g. secondary containment) are
effective in minimizing this risk.
16  JFA reports that small facility plan costs range between
$2,500 to $3,500; although the source for these estimates is not
documented. Additional support for the $3,000 estimate is
provided by the fact that $3,100 was the median of the total plan
cost estimates provided by commenters to EPA's Notices of Data
Availability (69 Fed. Reg. 56182,  September 20, 2004 and 69 Fed.
Reg. 56184, September 20,  2004). See (Pechan, 2006)  at  3.
17 Note that the JFA, 2004 report estimated the percentage of
total spill volume for facilities between 1,321 and 10,000
gallons as less than 0.2 percent.  The values reported herein
reflect estimates derived from actual per facility spill volume
by storage capacity reported in EPA, 1996 and facility counts by
storage capacity category from EPA, 2005.
18 Because the EPA-reported data could not be used to calculate
weighted average per facility spill volumes, Pechan calculated
the average of the per facility spill volumes for each storage
capacity range:  1,500-2,000 gal (0.59 gal); 2,000-2,500 gal
(0.85 gal); 2,500-3,000 gal (0.09); 3,000-4,000 gal (6.03 gal);
and 4,000-5,000 gal (0.63 gal).  The EPA survey results are not
well documented, but appear to include both facilities with
spills and facilities without spills.
19 Note that EPA reported data could not be used to calculate
weighted average per facility spill volumes.  Therefore, the
average represents the simple average of the per facility spill
volumes for each of 20 individual storage capacity ranges.
20 Tim Laughlin, a professional engineer and Technical Director
for the North Carolina Petroleum Marketers Association, has
prepared a SPCC model plan.  Also, members of the Environmental
Committee of the American Bakers Association have designed a
model plan for bakers.
21 In addition, the self-certification would also be applicable to
the current requirement to certify compliance with the 2002
amendments and any plan amendments for qualified facilities with
a plan.  We also believe that the five year review should not be
applicable to qualified facilities because such facilities do not
often make changes, and the required amendments would keep such
plans up-to-date in any event.
22 EPA acknowledges that this number understates the true count
because it excludes the number of new facilities outside the
electric utility sector.
23 69 Fed. Reg. 56184, September 20, 2004.
24  EPA's 1995 survey indicates that transfers are a major source
of oil discharges (EPA, 1996).
25  See USWAG 1991 SPCC comments at pages 32, 42-43 (translating
these statistics into fewer than 0.003% of equipment larger than
2 to 3 gallons at substations).
26 See EPA, Oil Spill Prevention, Control, and Countermeasure Task
Force Report, Docket No. SPCC-1P-7-1, May 13, 1988, at pages 4-6
to 4-8
27 However, EPA has stated that it does not include oil drilling
or workover equipment, including rigs because of the large
amounts of oil and high flow rates of oil associated with this
equipment (70 Fed. Reg. 73524, 73539), December 12, 2005).
28 We support General Electric's discussion to clarify the scope
of the motive power definition to better capture EPA's intent.
GE Comments on December 2005 Proposal at 6-7, submitted February
7, 2006.
29 The proposal clarifies that "oil transfer activities occurring
within an SPCC covered facility would continue to be
regulated...Regulating a transfer between unregulated motive
powers containers and a regulated tank is required by section
112.1(b), which requires that the SPCC rule apply to owners or
operators of facilities that transfer oil or oil products" (70
Fed. Reg. 73524, 73538, December 12, 2005).
30  Whereas sized secondary containment requires containment for
the entire capacity of the largest single container plus
sufficient freeboard to contain precipitation, general secondary
containment must only be designed so that any discharge from a
primary containment system will not escape the containment system
before cleanup occurs.
31  For example, the FAA requires that certain airports certify
compliance with a standard that requires fueling ramp drainage
systems that prohibit surface oil pooling on adjacent ground
surfaces when such pooling would create a fire hazard (70 Fed.
Reg. 73524, 73540, December 12, 2005).
32 An active measure requires an action by the facility to prevent
a spill from reaching navigable waters, and a passive measure
involves a permanent structure designed to prevent spills from
reaching such waters
33  We understand that EPA is already planning to further address
SPCC requirements for this industry after obtaining the results
of a forthcoming energy impact study of the 2002 SPCC rule.
34 According to 2003 National Response Center spill release data,
96.7 percent of crude oil spilled came from sources that
generated spills exceeding 1,000 barrels-the average marginal
well would require over 450 days to produce this amount of oil.
35 The O&G industry suggests defining marginal wells as "wells
that produce 15 barrels per day or less of crude oil or
condensate and/or that produce 90,000 cubic feet per day or less
of natural gas and/or that produce 25 barrels per day or less of
crude, condensate, or equivalent natural gas and are 95 percent
water."
36 Russell, Barry, Independent Petroleum Association of America,
letter to EPA Docket Center, "Re:  Docket ID No. OPA-2004-007,
Comments Regarding Facility Size Thresholds," November 18, 2004.
37 Produced water describes water obtained as part of the oil and
gas extraction process, and can include formation water,
injection water, and any chemicals added downstream or during the
oil/water separation process.
38 This has been discussed extensively in correspondence with the
agency.  See  Comments on EPA's Notice of Data Availability,
Associated General Contractors of America, November 19, 2004;
Letter from National Asphalt Paving Association and Associated
General Contractors of America to Peter Truitt, EPA, April 14,
2004; Abt Associates Memorandum to Peter Truitt, EPA,  February
26,  2004; Gary Fore, National Asphalt Paving Association,
Memorandum to Peter Truitt, February 26, 2004; Letter from
Norbert Dee, National Petrochemical and Refiners Association to
Dave Evans, EPA, June 3, 2004.