Document ID: EPA-HQ-OPA-2005-0001-0171
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2006-12-26T05:00Z

Regulatory Impact Analysis 

for the Final Revisions to the Oil Pollution Prevention Regulations (40
CFR PART 112)

U. S. Environmental Protection Agency

Office of Solid Waste and Emergency Response

Office of Emergency Management

November 2006



This page intentionally left blankTable of Contents

  TOC \o "1-2" \h \z    HYPERLINK \l "_Toc152491318"  1	Executive
Summary	  PAGEREF _Toc152491318 \h  6  

  HYPERLINK \l "_Toc152491319"  1.1	Baseline for the Analysis	  PAGEREF
_Toc152491319 \h  7  

  HYPERLINK \l "_Toc152491320"  1.2	Compliance Cost Savings	  PAGEREF
_Toc152491320 \h  7  

  HYPERLINK \l "_Toc152491321"  1.3	Impacts on Human Health, Welfare,
and the Environment	  PAGEREF _Toc152491321 \h  10  

  HYPERLINK \l "_Toc152491322"  1.4	Limitations and Key Assumptions	 
PAGEREF _Toc152491322 \h  11  

  HYPERLINK \l "_Toc152491323"  1.5	Requirements of Executive Order
12866	  PAGEREF _Toc152491323 \h  12  

  HYPERLINK \l "_Toc152491324"  2	Introduction	  PAGEREF _Toc152491324
\h  14  

  HYPERLINK \l "_Toc152491325"  2.1	Statutory Authority	  PAGEREF
_Toc152491325 \h  15  

  HYPERLINK \l "_Toc152491326"  2.2	Regulatory Background	  PAGEREF
_Toc152491326 \h  16  

  HYPERLINK \l "_Toc152491327"  2.3	Statement of Need for Regulatory
Action	  PAGEREF _Toc152491327 \h  16  

  HYPERLINK \l "_Toc152491328"  2.4	Amendments to the Rule	  PAGEREF
_Toc152491328 \h  17  

  HYPERLINK \l "_Toc152491329"  2.5	Organization of this Report	 
PAGEREF _Toc152491329 \h  18  

  HYPERLINK \l "_Toc152491330"  3	Methodology	  PAGEREF _Toc152491330 \h
 20  

  HYPERLINK \l "_Toc152491331"  3.1	General Approach	  PAGEREF
_Toc152491331 \h  20  

  HYPERLINK \l "_Toc152491332"  3.2	Regulatory Baseline for the Analysis
  PAGEREF _Toc152491332 \h  23  

  HYPERLINK \l "_Toc152491333"  4	Estimation of the SPCC-Regulated
Universe of Facilities	  PAGEREF _Toc152491333 \h  25  

  HYPERLINK \l "_Toc152491334"  4.1	Data Sources and Industry Sectors	 
PAGEREF _Toc152491334 \h  25  

  HYPERLINK \l "_Toc152491335"  4.2	Facility Oil Storage Capacity
Categories	  PAGEREF _Toc152491335 \h  28  

  HYPERLINK \l "_Toc152491336"  4.3	Comparison with EPA’s 1991
Facilities Study	  PAGEREF _Toc152491336 \h  28  

  HYPERLINK \l "_Toc152491337"  4.4	SPCC Universe Estimation Using State
Databases	  PAGEREF _Toc152491337 \h  31  

  HYPERLINK \l "_Toc152491338"  4.5	SPCC Universe Estimation Using
Industry-Specific Data Sources	  PAGEREF _Toc152491338 \h  36  

  HYPERLINK \l "_Toc152491339"  4.6	Estimates of the Total SPCC Universe
  PAGEREF _Toc152491339 \h  41  

  HYPERLINK \l "_Toc152491340"  4.7	Advantages and Limitations of the
Updated SPCC Universe Estimate	  PAGEREF _Toc152491340 \h  44  

  HYPERLINK \l "_Toc152491341"  4.8	Projecting SPCC Universe Estimates
Using Derived Industry Growth Rates	  PAGEREF _Toc152491341 \h  44  

  HYPERLINK \l "_Toc152491342"  4.9	SPCC-Regulated Facility
Characteristics	  PAGEREF _Toc152491342 \h  46  

  HYPERLINK \l "_Toc152491343"  5	Unit Compliance Costs	  PAGEREF
_Toc152491343 \h  47  

  HYPERLINK \l "_Toc152491344"  5.1	Recordkeeping and Reporting
Activities Costs	  PAGEREF _Toc152491344 \h  47  

  HYPERLINK \l "_Toc152491345"  5.2	Capital and Operation and
Maintenance (O&M) Activities Costs	  PAGEREF _Toc152491345 \h  56  

  HYPERLINK \l "_Toc152491346"  5.3	Alternative Requirements Offered by
the Final SPCC Rule	  PAGEREF _Toc152491346 \h  59  

  HYPERLINK \l "_Toc152491347"  5.4	State Overlap	  PAGEREF
_Toc152491347 \h  61  

  HYPERLINK \l "_Toc152491348"  5.5	Annualizing Estimated Changes in
Compliance Costs	  PAGEREF _Toc152491348 \h  62  

  HYPERLINK \l "_Toc152491349"  6	Qualified Facilities	  PAGEREF
_Toc152491349 \h  64  

  HYPERLINK \l "_Toc152491350"  6.1	Changes in Regulatory Requirements	 
PAGEREF _Toc152491350 \h  64  

  HYPERLINK \l "_Toc152491351"  6.2	Universe of Affected Facilities	 
PAGEREF _Toc152491351 \h  64  

  HYPERLINK \l "_Toc152491352"  6.3	Compliance Cost Savings	  PAGEREF
_Toc152491352 \h  69  

  HYPERLINK \l "_Toc152491353"  6.4	Alternative Considered	  PAGEREF
_Toc152491353 \h  73  

  HYPERLINK \l "_Toc152491354"  7	Facilities with Qualified Oil-Filled
Operational Equipment	  PAGEREF _Toc152491354 \h  74  

  HYPERLINK \l "_Toc152491355"  7.1	Universe of Affected Facilities	 
PAGEREF _Toc152491355 \h  74  

  HYPERLINK \l "_Toc152491356"  7.2	Compliance Cost Savings	  PAGEREF
_Toc152491356 \h  77  

  HYPERLINK \l "_Toc152491357"  7.3	Alternatives Considered	  PAGEREF
_Toc152491357 \h  82  

  HYPERLINK \l "_Toc152491358"  8	Facilities with Motive Power
Containers	  PAGEREF _Toc152491358 \h  83  

  HYPERLINK \l "_Toc152491359"  8.1	Universe of Affected Facilities	 
PAGEREF _Toc152491359 \h  83  

  HYPERLINK \l "_Toc152491360"  8.2	Compliance Cost Savings	  PAGEREF
_Toc152491360 \h  86  

  HYPERLINK \l "_Toc152491361"  9	Facilities with Mobile Refuelers	 
PAGEREF _Toc152491361 \h  89  

  HYPERLINK \l "_Toc152491362"  9.1	Universe of Affected Facilities	 
PAGEREF _Toc152491362 \h  89  

  HYPERLINK \l "_Toc152491363"  9.2	Compliance Cost Savings	  PAGEREF
_Toc152491363 \h  91  

  HYPERLINK \l "_Toc152491364"  9.3	Alternatives Considered	  PAGEREF
_Toc152491364 \h  94  

  HYPERLINK \l "_Toc152491365"  10	Projected Impacts on Human Health,
Welfare, and the Environment	  PAGEREF _Toc152491365 \h  96  

  HYPERLINK \l "_Toc152491366"  10.1	Environmental and Socioeconomic
Impacts of Oil Spills	  PAGEREF _Toc152491366 \h  96  

  HYPERLINK \l "_Toc152491367"  10.2	Benefits of the Final Regulation	 
PAGEREF _Toc152491367 \h  98  

  HYPERLINK \l "_Toc152491368"  10.3	Distributional Analysis	  PAGEREF
_Toc152491368 \h  99  

  HYPERLINK \l "_Toc152491369"  11	Small Business Analysis	  PAGEREF
_Toc152491369 \h  100  

  HYPERLINK \l "_Toc152491370"  12	Limitations and Key Assumptions	 
PAGEREF _Toc152491370 \h  102  

  HYPERLINK \l "_Toc152491371"  12.1	General Limitations	  PAGEREF
_Toc152491371 \h  102  

  HYPERLINK \l "_Toc152491372"  12.2	Qualified Facilities	  PAGEREF
_Toc152491372 \h  103  

  HYPERLINK \l "_Toc152491373"  12.3	Facilities with Qualified
Oil-Filled Equipment	  PAGEREF _Toc152491373 \h  104  

  HYPERLINK \l "_Toc152491374"  12.4	Motive Power	  PAGEREF
_Toc152491374 \h  105  

  HYPERLINK \l "_Toc152491375"  12.5	Mobile Refuelers	  PAGEREF
_Toc152491375 \h  105  

  HYPERLINK \l "_Toc152491376"  12.6	Impact of Technological Innovations
  PAGEREF _Toc152491376 \h  106  

  HYPERLINK \l "_Toc152491377"  12.7	Key Assumptions	  PAGEREF
_Toc152491377 \h  107  

  HYPERLINK \l "_Toc152491378"  13	Conclusions	  PAGEREF _Toc152491378
\h  108  

  HYPERLINK \l "_Toc152491379"  Bibliography	  PAGEREF _Toc152491379 \h 
111  

  HYPERLINK \l "_Toc152491380"  APPENDIX A	  PAGEREF _Toc152491380 \h 
117  

  HYPERLINK \l "_Toc152491381"  APPENDIX B	  PAGEREF _Toc152491381 \h 
122  

  HYPERLINK \l "_Toc152491382"  APPENDIX C	  PAGEREF _Toc152491382 \h 
126  

  HYPERLINK \l "_Toc152491383"  APPENDIX D	  PAGEREF _Toc152491383 \h 
146  

  HYPERLINK \l "_Toc152491384"  APPENDIX E	  PAGEREF _Toc152491384 \h 
150  

  HYPERLINK \l "_Toc152491385"  APPENDIX F	  PAGEREF _Toc152491385 \h 
152  

 List of Exhibits

  TOC \h \z \c "Exhibit"    HYPERLINK \l "_Toc152491386"  Exhibit 1-1
Summary of Estimated Cost Savings Associated with the 2006 Final Rule
Amendments ($2005 Millions)	  PAGEREF _Toc152491386 \h  8  

  HYPERLINK \l "_Toc152491387"  Exhibit 1-2 Estimated Number of Existing
SPCC-Regulated Facilities by Size Category in 2005	  PAGEREF
_Toc152491387 \h  9  

  HYPERLINK \l "_Toc152491388"  Exhibit 3-1 Main Steps for Estimating
the Economic Effects of the Final Rule Changes	  PAGEREF _Toc152491388
\h  22  

  HYPERLINK \l "_Toc152491389"  Exhibit 4-1 Industry Sectors and
Databases Used to Estimate SPCC-Regulated Facilities	  PAGEREF
_Toc152491389 \h  27  

  HYPERLINK \l "_Toc152491390"  Exhibit 4-2 Comparisons with EPA’s
1991 Facilities Study	  PAGEREF _Toc152491390 \h  30  

  HYPERLINK \l "_Toc152491391"  Exhibit 4-3 Summary of State Databases
Used in the Analysis	  PAGEREF _Toc152491391 \h  32  

  HYPERLINK \l "_Toc152491392"  Exhibit 4-4 Percentage of Matched
Facilities after Automated and Manual Matching	  PAGEREF _Toc152491392
\h  35  

  HYPERLINK \l "_Toc152491393"  Exhibit 4-5 SPCC Universe Estimates
Using State Databases	  PAGEREF _Toc152491393 \h  36  

  HYPERLINK \l "_Toc152491394"  Exhibit 4-6 Summary of Federal and
Proprietary Data Sources and Methodologies Used in the Analysis	 
PAGEREF _Toc152491394 \h  38  

  HYPERLINK \l "_Toc152491395"  Exhibit 4-7 SPCC Universe Estimate Using
Federal Databases	  PAGEREF _Toc152491395 \h  41  

  HYPERLINK \l "_Toc152491396"  Exhibit 4-8 Estimated Universe of
SPCC-Regulated Facilities	  PAGEREF _Toc152491396 \h  42  

  HYPERLINK \l "_Toc152491397"  Exhibit 4-9 Estimated Growth Rates	 
PAGEREF _Toc152491397 \h  45  

  HYPERLINK \l "_Toc152491398"  Exhibit 4-10 2005 Estimated Number of
SPCC-Regulated Facilities by Size Category	  PAGEREF _Toc152491398 \h 
46  

  HYPERLINK \l "_Toc152491399"  Exhibit 5-1 Cost to Retain an Outside PE
for Plan Certification	  PAGEREF _Toc152491399 \h  49  

  HYPERLINK \l "_Toc152491400"  Exhibit 5-2 Baseline Activity
Paperwork-Related Burden Estimates	  PAGEREF _Toc152491400 \h  54  

  HYPERLINK \l "_Toc152491401"  Exhibit 5-3 Estimated Capital and O&M
Costs by Facility Type	  PAGEREF _Toc152491401 \h  59  

  HYPERLINK \l "_Toc152491402"  Exhibit 5-4 Estimated Cost of Preparing
a Typical Contingency Plan	  PAGEREF _Toc152491402 \h  61  

  HYPERLINK \l "_Toc152491403"  Exhibit 5-5 Estimated Percentage
Reduction in Total Burden Due to State Overlap	  PAGEREF _Toc152491403
\h  62  

  HYPERLINK \l "_Toc152491404"  Exhibit 6-1 Projected Total Number of
Existing Qualified Facilities by Year and Industry Sector1	  PAGEREF
_Toc152491404 \h  66  

  HYPERLINK \l "_Toc152491405"  Exhibit 6-2 Projected Total Number of
New Qualified Facilities by Year and Industry Sector1	  PAGEREF
_Toc152491405 \h  67  

  HYPERLINK \l "_Toc152491406"  Exhibit 6-3 Estimated Number of
Facilities with Oil Discharges within the Last Three Years	  PAGEREF
_Toc152491406 \h  68  

  HYPERLINK \l "_Toc152491407"  Exhibit 6-4 Projected Number of Existing
and New Qualified Facilities	  PAGEREF _Toc152491407 \h  69  

  HYPERLINK \l "_Toc152491408"  Exhibit 6-5 Annual Compliance Costs and
Potential Compliance Cost Savings per Qualified Facility	  PAGEREF
_Toc152491408 \h  70  

  HYPERLINK \l "_Toc152491409"  Exhibit 6-6 Total Projected Compliance
Cost Savings for Qualified Facilities	  PAGEREF _Toc152491409 \h  72  

  HYPERLINK \l "_Toc152491410"  Exhibit 7-1 Projected Number of New
Facilities with Oil-Filled Operational Equipment by Industry Sector1	 
PAGEREF _Toc152491410 \h  76  

  HYPERLINK \l "_Toc152491411"  Exhibit 7-2 Estimated Annual Affected
Compliance Costs and Compliance Cost Savings by Size Category	  PAGEREF
_Toc152491411 \h  78  

  HYPERLINK \l "_Toc152491412"  Exhibit 7-3 Projected Number of New
Facilities with Qualified Oil-Filled Operational Equipment by Size
Category	  PAGEREF _Toc152491412 \h  80  

  HYPERLINK \l "_Toc152491413"  Exhibit 7-4 Projected Annual Compliance
Cost Savings	  PAGEREF _Toc152491413 \h  81  

  HYPERLINK \l "_Toc152491414"  Exhibit 8-1 Projected Number of Existing
and New Facilities with Motive Power Containers (10-Year Average)1	 
PAGEREF _Toc152491414 \h  85  

  HYPERLINK \l "_Toc152491415"  Exhibit 8-2 Estimated Annual Compliance
Costs1	  PAGEREF _Toc152491415 \h  87  

  HYPERLINK \l "_Toc152491416"  Exhibit 9-1 Projected Number of New
Facilities with Mobile Refuelers (10-Year Annual Average)	  PAGEREF
_Toc152491416 \h  91  

  HYPERLINK \l "_Toc152491417"  Exhibit 9-2 Estimated Annual Compliance
Cost Savings	  PAGEREF _Toc152491417 \h  93  

  HYPERLINK \l "_Toc152491418"  Exhibit 11-1 Estimated Cost Savings for
Category I SPCC-Regulated Facilities	  PAGEREF _Toc152491418 \h  101  

  HYPERLINK \l "_Toc152491419"  Exhibit 13-1 Summary of Estimated Cost
Savings Associated with the 2006 Final Rule Amendments ($2005 Millions)	
 PAGEREF _Toc152491419 \h  109  

  HYPERLINK \l "_Toc152491420"  Exhibit B-1 Percentage of Matched
Facilities Achieved by Automated and Manual Matching	  PAGEREF
_Toc152491420 \h  123  

  HYPERLINK \l "_Toc152491421"  Exhibit C-1 Methodological Steps Used to
Estimate the Universe of SPCC-Regulated Farms	  PAGEREF _Toc152491421 \h
 127  

  HYPERLINK \l "_Toc152491422"  Exhibit C-2 Derivation of Farm
Production Expenditures on Diesel and Gasoline, 1997	  PAGEREF
_Toc152491422 \h  128  

  HYPERLINK \l "_Toc152491423"  Exhibit C-3 Derivation of Average
Gasoline and Diesel Price ($2002)	  PAGEREF _Toc152491423 \h  129  

  HYPERLINK \l "_Toc152491424"  Exhibit C-4 Derivation of Ratio of
Gasoline and Diesel Stored to Purchased Using 1982 On-Farm Fuel Storage
Census Data	  PAGEREF _Toc152491424 \h  130  

  HYPERLINK \l "_Toc152491425"  Exhibit C-5 Derivation of the Number of
SPCC-Regulated Farms in 20051	  PAGEREF _Toc152491425 \h  133  

  HYPERLINK \l "_Toc152491426"  Exhibit C-6 SPCC Universe Estimates for
Farms (Medium Estimate)	  PAGEREF _Toc152491426 \h  134  

  HYPERLINK \l "_Toc152491427"  Exhibit C-7 SPCC Universe Estimates for
Petroleum Refinery and Related Industries, Pipelines, Petroleum Bulk
Stations and Terminals, and Fuel Oil Dealers	  PAGEREF _Toc152491427 \h 
134  

  HYPERLINK \l "_Toc152491428"  Exhibit C-8 SPCC Universe Estimates for
Oil Production	  PAGEREF _Toc152491428 \h  135  

  HYPERLINK \l "_Toc152491429"  Exhibit C-9 Estimated Number of Electric
Utility Plants and Substations	  PAGEREF _Toc152491429 \h  137  

  HYPERLINK \l "_Toc152491430"  Exhibit C-10 Derivation of Number of
Regulated Military Facilities	  PAGEREF _Toc152491430 \h  137  

  HYPERLINK \l "_Toc152491431"  Exhibit C-11 Derivation of Potentially
Regulated AFVO Facilities	  PAGEREF _Toc152491431 \h  139  

  HYPERLINK \l "_Toc152491432"  Exhibit C-12 Analysis of Potentially
Regulated AFVO Facilities under the SPCC Rule	  PAGEREF _Toc152491432 \h
 140  

  HYPERLINK \l "_Toc152491433"  Exhibit C-13 Estimated Number of Animal
Fats and Vegetable Oil Facilities	  PAGEREF _Toc152491433 \h  142  

  HYPERLINK \l "_Toc152491434"  Exhibit C-14 Derivation of Adjustment
Factor for Education, Religious, and Government Establishments	  PAGEREF
_Toc152491434 \h  143  

  HYPERLINK \l "_Toc152491435"  Exhibit C-15 Estimation of the Number of
Regulated Educational, Religious, and Government Facilities in 20051	 
PAGEREF _Toc152491435 \h  144  

  HYPERLINK \l "_Toc152491436"  Exhibit C-16 Estimated Number of
Education, Religious Organizations, and Government Establishments	 
PAGEREF _Toc152491436 \h  145  

  HYPERLINK \l "_Toc152491437"  Exhibit D-1 Projected Number of Oil
Production Facilities and Estimated Growth Rates	  PAGEREF _Toc152491437
\h  149  

  HYPERLINK \l "_Toc152491438"  Exhibit E-1 Estimated Cost Savings
Associated with the 2006 Final Rule Amendments Compared to the 2005
Proposed Rule Amendments ($2005 Millions)	  PAGEREF _Toc152491438 \h 
151  

  HYPERLINK \l "_Toc152491439"  Exhibit F-1 Estimated Cost Savings
Associated with Final Changes to the SPCC Rule	  PAGEREF _Toc152491439
\h  153  

  HYPERLINK \l "_Toc152491440"  Exhibit F-2 Per-Facility Unit Cost
Estimates and Savings for Affected SPCC Requirements ($/Year)	  PAGEREF
_Toc152491440 \h  155  

 

Executive Summary

The Oil Pollution Prevention regulation, at 40 CFR part 112, outlines
requirements for prevention of, preparedness for, and response to oil
spills.  The portion of the regulation that deals with prevention
measures is known as the Spill Prevention, Control, and Countermeasure
(SPCC) rule.  The U.S. Environmental Protection Agency (EPA or the
Agency) is streamlining the rule for owners and operators of certain
facilities, providing a more cost-effective approach for meeting EPA’s
statutory requirements.  Following is a summary of the key amendments to
the rule: 

Facilities that store 10,000 gallons or less of oil and meet other
qualifying criteria.  EPA is providing streamlined requirements for
owners and operators of facilities that meet a set of specified
qualifying criteria.  Owners and operators of qualified facilities have
the option to self-certify that their SPCC Plan complies with 40 CFR
part 112, in lieu of having a Professional Engineer (PE) review and
certify their Plan.  This option is available to the owners and
operators of those facilities that (1) have had no single discharge as
described in §112.1(b) greater than 1,000 gallons or no two discharges
as described in §112.1(b) each greater than 42 gallons within any
12-month period during three years prior to the SPCC Plan
self-certification date, or since becoming subject to SPCC requirements
if the facility has been in operation for less than three years; and (2)
have 10,000 gallons or less in aggregate aboveground oil storage
capacity.  Owners and operators of qualified facilities choosing this
option may deviate from requirements of the SPCC rule as provided under
§112.7(a)(2) and make impracticability determinations as described
under §112.7(d) only if these portions of the Plan are certified by a
licensed PE.

Facilities with certain types of oil-filled operational equipment.  EPA
is providing owners and operators of facilities with certain types of
oil-filled operational equipment the option of preparing an oil spill
contingency plan and a written commitment of manpower, equipment, and
materials in lieu of providing secondary containment for qualified
oil-filled operational equipment, without making an individual
impracticability determination as required in §112.7(d).  Owners or
operators who pursue this alternative are required to establish and
document an inspection or monitoring program for this qualified
oil-filled operational equipment to detect equipment failure and/or a
discharge, in lieu of providing secondary containment.  An owner or
operator cannot pursue the option if that facility has had a single
discharge as described in §112.1(b) from any oil-filled operational
equipment exceeding 1,000 U.S. gallons or two discharges as described in
§112.1(b) from any oil-filled operational equipment each exceeding 42
U.S. gallons within any twelve month period in the three 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 three
years.

Facilities with motive power containers.  EPA is providing an exemption
for “motive power” containers, which are defined as any onboard bulk
storage container used 

primarily to power the movement of a motor vehicle, or ancillary onboard
oil-filled operational equipment.  An onboard bulk storage container
which is used to store or transfer oil for further distribution is not
considered a motive power container. The definition of motive power
container does not include oil drilling or workover equipment, including
rigs.

Facilities with mobile refuelers.  EPA is exempting mobile refuelers
from the specifically sized bulk storage secondary containment
requirements of §§112.8(c)(2) and (11).  Mobile refuelers are vehicles
with an onboard bulk storage container designed or used solely to store
and transport fuel for transfer into or from aircraft, motor vehicle,
locomotive, vessel, ground service equipment, or other oil storage
container.  This relief was proposed only for mobile refuelers at
airports, but is granted in the final rule to similar mobile refuelers
in other industry sectors including mining sites, chemical complexes,
construction sites, seaport terminals, and tank truck home base
operations.  The general secondary containment requirements of
§112.7(c) still apply to the onboard bulk storage containers on mobile
refuelers and to the transfers associated with this equipment.  

In addition, the Agency is removing and reserving certain SPCC
requirements for animal fats and vegetable oils; and is instituting a
separate extension of the compliance dates for owners and operators of
farms.  The purpose of this rulemaking is to provide streamlined,
alternative methods for compliance with oil spill prevention
requirements for the entities described above.

Baseline for the Analysis

EPA compared the compliance costs for owners and operators of facilities
affected by the 2006 amendments to the costs under the SPCC rule as
amended in 2002 (67 FR 47042).  As such, the 2002 rule serves as the
baseline for the analysis.  EPA has not made any assumptions about
current compliance with those requirements, but is treating the costs of
compliance with the 2002 rule as liabilities owners and operators of
existing regulated entities currently have – whether or not they have
actually made the capital expenditures to comply.  In this analytical
construct, owners and operators of these firms are simply delaying the
expenditures for the costs they already face.  

	Compliance Cost Savings 

  REF _Ref140568306  Exhibit 1-1  summarizes the estimated annualized
compliance cost savings resulting from the SPCC amendments using 3 and 7
percent discount rates.  The revisions to the SPCC rule are expected to
yield annualized cost savings of roughly $38 million for owners and
operators of qualified facilities, $53 million for owners and operators
of facilities with qualified oil-filled equipment (under the 50 percent
scenario), $1 million for owners and operators of facilities with motive
power containers (under the 10 percent scenario), and $34 million for
owners and operators of facilities with mobile refuelers (under the 50
percent scenario).  

Exhibit   STYLEREF 1 \s  1 -  SEQ Exhibit \* ARABIC \s 1  1 

Summary of Estimated Cost Savings Associated with

the 2006 Final Rule Amendments ($2005 Millions)

Rule Component/Scenario1	Annualized Cost Savings (3%)	Annualized Cost
Savings (7%)

Qualified Facilities	$37.9 	$37.7 

Qualified OFE

25%	$39.0 	$38.7 

50%	$53.1 	$52.8 

75%	$67.2 	$66.8 

Motive Power

10%	$1.07 	$1.07 

25%	$2.69 	$2.68 

50%	$5.37 	$5.35 

Mobile Refuelers

25%	$17.2 	$17.1 

50%	$34.4 	$34.2 

75%	$51.6 	$51.3 

1 	Estimated savings are presented for final rule components and
scenarios as discussed in this report. 

EPA derived these savings by estimating the number of facilities
affected by each provision in the final rule; identifying the specific
behavioral changes (e.g., choosing to self-certify an SPCC Plan rather
than using a licensed PE) that may occur; estimating the unit costs of
compliance measures under the baseline and regulatory scenarios; and
applying the change in unit costs to the projected number of affected
facilities.  Total costs were annualized over a 10-year period using
both 3 and 7 percent discount rates.  The main steps in the analysis are
summarized below:

Estimate the universe of facilities affected by the final rule.  EPA
first developed a baseline universe of existing SPCC-regulated
facilities by industry sector.  Next, EPA classified facilities into
capacity categories to (1) account for differences in the potential
compliance costs experienced by owners and operators of facilities of
different sizes; and (2) determine the number of facilities affected by
each of the changes in the SPCC rule based on a facility’s storage
capacity.    REF _Ref140569184  Exhibit 1-2  summarizes the 2005
estimated number of existing SPCC-regulated facilities by size category.
 EPA then projected the anticipated annual change in the number of
affected facilities over the analysis period using industry-specific
growth rates.  

Exhibit   STYLEREF 1 \s  1 -  SEQ Exhibit \* ARABIC \s 1  2 

Estimated Number of Existing SPCC-Regulated Facilities by Size Category
in 2005

Size Category	Aggregate Capacity	Estimated Number of Facilities

I	1,320 to 10,000 gallons	317,000

II	10,001 to 42,000 gallons	187,000

III	42,001 to 1 million gallons	  63,700

IV	Greater than 1 million gallons	    3,370

Total	571,000

For each of the four major components of the final rule, EPA estimated
the number of facilities that may be affected by the changes in the
rule.  These entities include facilities with relatively smaller volumes
of oil storage; facilities with certain types of oil-filled operational
equipment; facilities with motive power containers; and facilities with
mobile refuelers.  

Estimate changes in compliance cost elements resulting from the final
rule.  EPA developed unit cost estimates for specific 2002 baseline
requirements expected to be affected by the final rule.  EPA also
developed unit costs for compliance elements introduced by the 2006
final rule, such as the cost of preparing a contingency plan instead of
providing secondary containment for qualified oil-filled operational
equipment.  EPA did not analyze cost savings associated with
non-substantive changes to requirements for facilities that handle,
store, or transport fats and vegetable oils or the extension of the
compliance dates for owners and operators of farms.

Estimate total reduction in compliance costs to owners and operators of
potentially affected facilities.  EPA derived the change in compliance
costs for owners and operators of each type of affected facilities and
multiplied these cost savings by the total number of facilities whose
owners and operators are expected to take advantage of a given
regulatory relief option.  Total compliance cost savings were annualized
over a ten-year period, 2008 through 2017, using 3 and 7 percent
discount rates. 

EPA projected the reduction in compliance costs associated with the
amendment for owners and operators of an estimated 345,000 qualified
facilities eligible for the self-certification option.  Specifically EPA
estimated that compliance costs for owners and operators of qualified
facilities with 10,000 gallons or less of oil storage capacity would
decrease by approximately $38 million based on the offered relief by not
requiring PE certification of the SPCC Plans.

Approximately 2,110 new electric utility facilities are expected to
become regulated each year and their owners and operators may take
advantage of the exemption for qualified oil-filled operational
equipment.  When estimating compliance cost savings, in addition to
electric utilities, EPA also considered facilities using oil-filled
operational equipment from other sectors.  Under a scenario where owners
and operators of 50 percent of the facilities in other industries
identified as having oil-filled operational equipment would take
advantage of the exemption, EPA estimated that the final rule could
reduce compliance costs by as much as $53 million.  Under scenarios
where owners and operators of 25 and 75 percent of the facilities in
these industries would take advantage of the provision, compliance costs
would decrease by approximately $39 million or $67 million,
respectively.

EPA projected that the final rule amendment defining and exempting
motive power containers would reduce compliance costs by approximately
$1 million annually, assuming that owners and operators of 10 percent of
the facilities in industries identified as having motive power oil
storage will take advantage of the exemption.  Under the 25 and 50
percent scenarios, compliance costs would decrease by approximately $3
million or $5 million, respectively.

EPA projected that owners and operators of all airports and a fraction
of non-aviation industries identified as having mobile refuelers might
take advantage of the exemption from the specifically sized secondary
containment requirements for bulk storage containers.  Under three
scenarios, for all airports plus 25-, 50-, or 75-percent of non-aviation
industries identified as having mobile refuelers, EPA estimated that the
final rule would reduce compliance costs by approximately $17 million,
$34 million, or $51 million, respectively.

Impacts on Human Health, Welfare, and the Environment

The main benefit of the final rule is the reductions in compliance costs
due to streamlined requirements.  The Agency also considered whether the
less-stringent options provided by the amendments might increase the
risk of discharges, with adverse consequences for the environment, human
health, and welfare.  For example, owners and operators of qualified
oil-filled operational equipment that implement a contingency plan
instead of providing secondary containment measures could see an
increase in the risk of discharges.  Nevertheless, EPA has heard
anecdotal evidence of non-compliance with current SPCC regulations due
at least in part to the costs of compliance.  To the extent that this is
true, reducing the costs of complying with SPCC requirements may induce
owners and operators of some previously non-compliant facilities to
implement oil pollution prevention measures – thereby reducing risk of
discharge.

EPA has designed the final rule to minimize increases in environmental
risk.  For example, regulatory relief for owners and operators of
qualified facilities focuses on facilities that store relatively small
amounts of oil and demonstrate they have had no discharge greater than
1,000 gallons or no two discharges greater than 42 gallons in a 12-month
period during the past three years.  Furthermore, EPA allows owners and
operators of qualified facilities the option of avoiding PE
certification, but maintains that any decision to apply environmental
equivalence or pursue an impracticability claim still requires PE
certification.

EPA also considered the distributional impacts of the final rule.  For
example, the cost savings from reduced plan certification requirements
have the side effect of reducing the quantity of engineering services
demanded.  The net impact on comprehensive measures of social welfare
has not been estimated.  EPA did not quantify but acknowledges that
clustering of SPCC-regulated facilities exists (e.g., oil production
facilities in the Gulf of Mexico coastal states).  As a result of
clustering, national estimates of the impacts of the amended rule on
owners and operators of regulated facilities may miss spatially
disproportional effects.  The amendments are also likely to provide
relatively greater relief to small businesses to the extent that these
businesses are eligible for reduced regulatory requirements for
qualified facilities, facilities with qualified oil-filled operational
equipment, facilities with motive power containers, and facilities with
mobile refuelers.  For the purposes of the regulatory impact analysis
(RIA), EPA evaluated facilities on the basis of their oil storage
capacity, not on the employment or annual revenue figures that the U.S.
Small Business Administration (SBA) uses to define small businesses. 
Nevertheless, EPA expects that amendments resulting in reduced burden
for facilities that store 10,000 gallons or less will likely also
benefit small businesses.

Limitations and Key Assumptions

One of the main limitations of this regulatory analysis is EPA’s lack
of data on facilities regulated under the SPCC rule.  The rule does not
include a notification requirement and, with certain exceptions,
regulated entities do not need to submit any information to EPA. 
Without conducting a statistically valid survey, EPA is limited to data
already collected by state or federal agencies or by proprietary sources
to estimate how many SPCC-regulated facilities of different sizes with
different types of equipment and oil storage and utilization techniques
exist.  Furthermore, given a wide range of industries and facility sizes
affected by the SPCC rule – as well as geographical and climatic
conditions that affect facility’s configuration and operation patterns
– a realistic baseline against which regulatory changes are measured
cannot be reliably determined.  

Another major limitation concerns m  SEQ CHAPTER \h \r 1 any of the cost
estimates used in the analysis, which are based on interviews with a
limited number of PEs.  The data provided by these PEs represent
anecdotal information and are not statistically valid, so they cannot be
reliably extrapolated to a larger universe.  Additionally, the estimates
presented in this report are based on currently available technologies. 
The figures do not capture possible cost savings from implementing new
future technologies or the reduction in costs due to greater market
penetration of existing technologies.  Because the final SPCC rule
allows owners and operators of facilities to choose alternative
requirements that primarily involve paperwork-related activities over
capital-intensive compliance measures (e.g., providing secondary
containment), the nature of evolving technology could affect the
estimated cost savings.  For example, if new technologies were to lower
the cost of capital-intensive compliance measures, the cost savings
attributed to the final rule amendments would decrease.  Furthermore,
EPA acknowledges other limitations in the analysis, such as a lack of
usable data on changes in oil spill risk and lack of information on SPCC
compliance.

EPA made three key assumptions in the analysis.  First, the Agency
assumed cost minimization behavior applied to all owners and operators
of facilities that qualify for reduced regulatory requirements, whereby
all those affected would seek burden relief.  Second, EPA assumed that
owners and operators of existing SPCC-regulated facilities would forgo
compliance activities offered as alternatives to activities that
required capital investments because they would have already incurred a
one-time cost.  For example, a facility owner or operator, who had
secondary containment for qualified oil-filled operational equipment in
place, would not take advantage of the provided alternative to prepare a
contingency plan instead.  Third, EPA assumed compliance was nationally
consistent despite variability in state regulations, political climate,
and the distribution of affected facilities.

Requirements of Executive Order 12866

Under Executive Order 12866 (58 FR 51735, October 4, 1993), EPA must
determine whether a regulatory action is “significant” and therefore
subject to Office of Management and Budget (OMB) review and the
requirements of the Executive Order.  The order defines “significant
regulatory action” as one that is likely to result in a rule that may:

Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local, or tribal governments or communities;

Create a serious inconsistency or otherwise interfere with an action
taken or planned by another agency;

Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or

Raise novel legal or policy issues arising out of legal mandates, the
President’s priorities, or the principles set forth in the Executive
Order.

The 2006 final rule is expected to have an annual effect on the economy
of $100 million or more and, therefore, is considered economically
significant.  For such rules, the Executive Order requires an
“assessment of the potential costs and benefits of the regulatory
action, including an explanation of the manner in which the regulatory
action is consistent with a statutory mandate and, to the extent
permitted by law, promotes the President's priorities and avoids undue
interference with state, local, and tribal governments in the exercise
of their governmental functions.”  In addition, the Agency must also
provide the following:

An assessment, including the underlying analysis, of benefits
anticipated from the regulatory action (such as, but not limited to, the
promotion of the efficient functioning of the economy and private
markets, the enhancement of health and safety, the protection of the
natural environment, and the elimination or reduction of discrimination
or bias) together with, to the extent feasible, a quantification of
those benefits.

An assessment, including the underlying analysis, of costs anticipated
from the regulatory action (such as, but not limited to, the direct cost
both to the government in administering the regulation and to businesses
and others in complying with the regulation, and any adverse effects on
the efficient functioning of the economy, private markets (including
productivity, employment, and competitiveness), health, safety, and the
natural environment), together with, to the extent feasible, a
quantification of those costs.

An assessment, including the underlying analysis, of costs and benefits
of potentially effective and reasonably feasible alternatives to the
planned regulation, identified by the agencies or the public (including
improving the current regulation and reasonably viable nonregulatory
actions), and an explanation why the planned regulatory action is
preferable to the identified potential alternatives.

EPA performed a regulatory impact analysis in accordance with Executive
Order 12866 (and OMB Circular A-4) requirements to the fullest extent
possible; however, the study is not a comprehensive analysis of social
benefits and costs.  EPA estimated compliance cost savings as a
surrogate for social benefits.  Many of the assumptions presented
throughout this regulatory analysis are inherently uncertain, as are
many of the estimates of unit cost savings and the number of affected
facilities.  EPA made the best use of the available data to make
informed decisions regarding assumptions used.  To address major
uncertainties involved in estimating the total cost savings from the
final SPCC rule, the Agency examined up to three scenarios for various
components of the final rule to provide a sensitivity approach to
estimating the range of cost savings.  

Data limitations prevented the analysis from complying with the "good
practices" outlined in OMB Circular A-4 guidance for regulatory analyses
of social benefits and costs.  However, EPA believes the analytical
technique and results generated are useful, informative, and based on
the best available information given the time and resource constraints
associated with the final rulemaking schedule.  

Introduction

	The Environmental Protection Agency (EPA or the Agency) is amending the
Spill Prevention, Control, and Countermeasure (SPCC) Plan requirements
of the Oil Pollution Prevention regulation at 40 CFR part 112.  This
amendment is intended to reduce the regulatory burden for owners and
operators of certain facilities.

It provides an option to allow owners or operators of facilities that
store 10,000 gallons or less of oil, and meet other qualifying criteria,
to self-certify their SPCC Plans, in lieu of review and certification by
a Professional Engineer (PE).

It allows owners or operators to prepare an oil spill contingency plan
as an alternative to secondary containment, without requiring a
determination of impracticability, for facilities that have certain
types of oil-filled operational equipment and meet other qualifying
criteria.

It defines and provides an exemption for motive power containers.

It exempts mobile refuelers from the specifically sized secondary
containment requirements for bulk storage containers.

In addition, the Agency is removing and reserving certain SPCC
requirements for animal fats and vegetable oils; and is instituting a
separate extension of the compliance dates for owners and operators of
farms.  The purpose of this rulemaking is to provide streamlined,
alternative methods for compliance with oil spill prevention
requirements for the entities described above.

The measures under this action relieve owners and operators of affected
facilities of regulatory mandates and could change the manner in which
they comply with remaining mandates.  Under the terms of Executive Order
12866 (58 FR 51735, October 4, 1993), EPA must determine whether a
regulatory action is “significant” and therefore subject to Office
of Management and Budget (OMB) review and the requirements of the
Executive Order.  Under the terms of Executive Order 12866, this action
has been judged a “significant regulatory action” because it will
have an annual effect on the economy of $100 million or more.  The order
defines “significant regulatory action” as one that is likely to
result in a rule that may do one or more of the following:

(1) Have an annual effect on the economy of $100 million or more, or
adversely affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local, or tribal governments or communities.

(2) Create a serious inconsistency or otherwise interfere with an action
taken or planned by another agency.

(3) Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof.

(4) Raise novel legal or policy issues arising out of legal mandates,
the President’s priorities, or the principles set forth in the
Executive Order.

Once an action is deemed subject to Executive Order 12866, agencies are
required to assess all costs and benefits of regulatory activities,
including quantitative and qualitative measures.  The Executive Order
also requires assessment of social benefits and costs, including but not
limited to those related to the environment, public health and safety,
distributive impacts, and issues of equity.  This action was submitted
to OMB for review, and the Agency prepared this regulatory analysis in
support of the regulatory requirements.

The regulatory impact analysis (RIA) in this report provides an estimate
of reduced compliance costs for owners and operators of certain types of
facilities and equipment.  However, because EPA has designed the final
rule to minimize increases in environmental risk, the frequency of oil
spills is not expected to increase.  While this analysis provides an
assessment of projected impact on human health, welfare, and the
environment, as well as estimated costs of compliance, this report is
not a full accounting of all social costs and benefits as required by
Executive Order 12866.

Limitations of the analysis are described in Chapter   REF _Ref140639907
\r  12 .  Many of the assumptions underlying this analysis are
inherently uncertain, as are the estimates of unit cost savings and the
number of affected facilities.  While this report does not fully comply
with Office of Management and Budget Circular A-4, “Regulatory
Analysis”, EPA made the best use of the available data to make
informed decisions regarding assumptions and estimates used in the
analysis. 

	The remainder of Chapter   REF _Ref140639926 \r  2  provides background
information on the Oil Pollution Prevention regulation, identifies the
statutory authority for the regulation, summarizes the regulatory
changes, and describes the organization of this report.  

Statutory Authority

	Section 311(j)(1)(C) of the CWA authorizes the President to issue
regulations establishing procedures, methods, equipment, and other
requirements to prevent discharges of oil from vessels and facilities
and to contain such discharges.  With section 2(b)(1) of Executive Order
12777, the President delegated to EPA the authority to regulate
non-transportation-related onshore facilities under section 311(j)(1)(C)
of the Act.  The President also delegated authority over
transportation-related onshore facilities, deepwater ports, and vessels
to the U.S. Department of Transportation (DOT), and authority over other
offshore facilities, including associated pipelines, to the U.S.
Department of the Interior (DOI).  A Memorandum of Understanding (MOU)
between the Secretary of Transportation and the EPA Administrator, dated
November 24, 1971 (36 FR 24080), established the definitions of
non-transportation-related facilities and transportation-related
facilities.  A subsequent MOU, dated November 8, 1993 (published as
Appendix B to 40 CFR part 112), among EPA, DOT, and DOI, reallocated to
EPA the responsibility for non-transportation-related offshore
facilities located landward of the coastline.

Regulatory Background

	The Oil Pollution Prevention regulation, at 40 CFR part 112, outlines
requirements for prevention of, preparedness for, and response to oil
spills.  The changes to the rule affect requirements related to
prevention that are collectively known as the Spill Prevention, Control,
and Countermeasure (SPCC) regulation.       

The SPCC regulation was originally promulgated on December 11, 1973, at
38 FR 34164, under the authority of section 311(j)(1)(C) of the Clean
Water Act (CWA or the Act).  The SPCC regulation establishes procedures,
methods, equipment, and other requirements to prevent the discharge of
oil from non-transportation-related onshore and offshore facilities with
aboveground oil storage capacity greater than 1,320 gallons, or with
completely buried underground oil storage capacity greater than 42,000
gallons.  Regulated facilities are also limited to those that, because
of their location, could reasonably be expected to discharge oil into
the navigable waters of the United States or adjoining shorelines.

An amendment to the rule finalized in 2002 included changes such as
exempting certain completely buried underground tanks and wastewater
treatment facilities, and establishing a single 1,320-gallon aboveground
storage capacity threshold.  The changes to the rule also eliminated the
provision that required an owner or operator of a facility having an
aboveground tank greater than 660 gallons to prepare an SPCC Plan. 
Since then, on several occasions, EPA extended the compliance deadlines
to provide additional time for the regulated community to prepare and
implement SPCC Plans, and to alleviate the need for individual extension
requests.

Statement of Need for Regulatory Action

EPA has identified opportunities to improve the efficiency of the SPCC
regulatory program.  To that end, the Agency proposed a series of
revisions to the rule in 2005 (70 FR 73524), and received comments on
these revisions from regulated parties, professional associations,
environmental interest groups, and others.  EPA reviewed these comments
and evaluated new data about the operations of various industries
regulated under the rule, and determined that amending the rule will
provide an effective approach to meeting statutory requirements.  For
example, allowing owners and operators of facilities with low volumes of
oil storage to self-certify their SPCC Plans may remove potential
barriers to compliance at those facilities.  To the extent that
compliance with oil discharge prevention requirements increases or stays
the same, EPA can achieve similar environmental benefits at lower
overall costs.  This regulatory action is within the statutory
authorities described above, and will reduce the burden of the rule
without creating adverse impact on public health or the environment. 
This action is therefore preferable to no action.

Amendments to the Rule

EPA is promulgating the following amendments to the SPCC rule
requirements, found at 40 CFR part 112, to reduce the regulatory burden:

Qualified Facilities.  EPA is providing streamlined requirements for
owners and operators of facilities that meet a set of specified
qualifying criteria.  Owners and operators of qualified facilities have
the option to self-certify that their SPCC Plan complies with 40 CFR
part 112, in lieu of having a PE review and certify their Plan.  An
SPCC-regulated facility must meet the following criteria to qualify for
this reduced burden option: (1) total facility oil storage capacity of
10,000 gallons or less; and (2) have had no single discharge as
described in §112.1(b) greater than 1,000 gallons or no two discharges
as described in §112.1(b) each greater than 42 gallons within any
12-month period in the three years prior to the SPCC Plan
self-certification date, or since becoming subject to 40 CFR part 112 if
the facility has been in operation for less than three years.  Owners
and operators of qualified facilities choosing this option may deviate
from requirement of the SPCC rule as provided under §112.7(a)(2), and
make impracticability determinations as described under §112.7(d), only
if these portions of the Plan are certified by a licensed PE.

Facilities with Qualified Oil-filled Operational Equipment.  EPA is
providing owners and operators of facilities with certain types of
oil-filled operational equipment the option of preparing an oil spill
contingency plan and a written commitment of manpower, equipment, and
materials, in lieu of providing secondary containment for qualified
oil-filled operational equipment, without making an individual
impracticability determination as required in §112.7(d).  EPA is adding
§112.7(k)(1) to define the eligibility criterion that oil-filled
operational equipment must meet in order to be considered qualified. 
This criterion specifically prohibits an owner or operator from pursuing
the option if the facility has had a single discharge as described in
§112.1(b) from any oil-filled operational equipment exceeding 1,000
U.S. gallons or two discharges as described in §112.1(b) from any
oil-filled operational equipment each exceeding 42 U.S. gallons within
any twelve month period in the three 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 three years.

Facilities with Certain Types of Motive Power Containers.  EPA is
providing an exemption for “motive power” containers, which are
defined as any onboard bulk storage containers used primarily to power
the movement of a motor vehicle, or ancillary onboard oil-filled
operational equipment.  An onboard bulk storage container which is used
to store or transfer oil for further distribution is not considered a
motive power container. The definition of motive power container does
not include oil drilling or workover equipment, including rigs.  The
transfer of fuel or other oil into a motive power container at an
otherwise regulated facility is not eligible for this exemption. 

Mobile Refuelers.  EPA is exempting mobile refuelers from the
specifically sized bulk storage secondary containment requirements of
§§112.8(c)(2) and (11).  Mobile refuelers are vehicles with an onboard
bulk storage container designed or used solely to store fuel or to
transport it for transfer into or from aircraft, motor vehicle,
locomotive, vessel, ground service equipment or other oil storage
container.  This relief was proposed only for mobile refuelers at
airports, but is granted in the final rule to similar mobile refuelers
in other industry sectors, including mining sites, chemical complexes,
construction sites, seaport terminals, and tank truck home base
operations.  The general secondary containment requirements of
§112.7(c) still apply to the onboard bulk storage containers on mobile
refuelers and to the transfers associated with this equipment.

Facilities that Handle, Store, or Transport Animal Fats and Vegetable
Oils (AFVO).  EPA is removing and reserving certain provisions related
to AFVO facilities because these provisions do not apply.  These
provisions were included in the July 2002 revisions to the SPCC rule
because the Agency had not proposed separate SPCC requirements for
animal fats and vegetable oils for public notice and comment.  As a
result, the requirements for petroleum oils were applied to animal fats
and vegetable oils.

Farms.  Additionally, EPA is extending the compliance dates for owners
and operators of all farms while the Agency considers a definition for
the term “farm,” and whether this sector warrants differentiated
requirements under the SPCC rule.  

Organization of this Report 

	This regulatory analysis quantifies changes in compliance costs for
owners and operators of affected facilities.  The analysis also examines
the impact of the rule amendments on small businesses and oil discharge
risk.  The remainder of this report is organized as follows:

Chapter   REF _Ref140640364 \r  3  presents the methodology used by EPA
to estimate changes in unit compliance costs for the regulatory actions.

Chapter   REF _Ref140640419 \r  4  describes the SPCC-regulated
universe.

Chapter   REF _Ref140640427 \r  5  discusses the estimated changes in
unit compliance costs as a result of the rule amendments.

Chapter   REF _Ref140640437 \r  6  analyzes the impacts of the
regulatory changes on qualified facilities.

Chapter   REF _Ref140640445 \r  7  analyzes the impacts of the
regulatory changes on facilities with qualified oil-filled operational
equipment.

Chapter   REF _Ref140640456 \r  8  analyzes the impacts of the
regulatory changes on facilities with motive power containers.

Chapter   REF _Ref140640519 \r  9  analyzes the impacts of the
regulatory changes on facilities with mobile refuelers.

Chapter   REF _Ref140640528 \r  10  describes the projected impacts of
the rule amendments on human health, welfare, and the environment.

Chapter   REF _Ref140640539 \r  11  presents a summary of the impacts of
the final rule on small businesses.

Chapter   REF _Ref140640551 \r  12  discusses key limitations of the
analysis.

Chapter   REF _Ref140640563 \r  \* MERGEFORMAT  13  presents conclusions
of the analysis.

Appendix A describes the data sources used to estimate the universe of
SPCC-regulated facilities.

Appendix B outlines the approach used to determine industry categories
for SPCC-regulated facilities based on the Dun & Bradstreet database.

Appendix C outlines the approach used to estimate the SPCC universe.

Appendix D describes the derivation of industry-specific growth rates.

Appendix E includes a comparison of the estimated compliance cost
savings of the 2006 final rule with those estimated for the 2005
proposed rule.

Appendix F presents an alternative impact analysis assuming a 50-percent
compliance rate.

  SEQ CHAPTER \h \r 1 Methodology

	This chapter presents the overall methodology used to estimate the
economic effects of the SPCC final rule.  Section   REF _Ref140640611 \r
 3.1  outlines the major steps of the analysis, and Section   REF
_Ref140640641 \r  3.2  describes the regulatory and economic baseline
for the analysis.  Subsequent chapters provide greater detail on
specific steps and calculations, including relevant equations.  

General Approach

	The general approach to this regulatory impact analysis involved
estimating the number of facilities affected by each provision in the
final rule; identifying the specific behavioral changes that may occur
(e.g., choosing to self-certify an SPCC Plan rather than using a
licensed PE); estimating the unit costs of compliance measures under the
baseline and regulatory scenarios; and applying the change in unit costs
to the projected number of affected facilities.  Total costs were
annualized over a ten-year period using both 3 and 7 percent discount
rates.    REF _Ref140568669  \* MERGEFORMAT  Exhibit 3-1  outlines this
approach.  The main steps in the analysis are summarized below:

Estimate the   SEQ CHAPTER \h \r 1 universe of facilities affected by
the final rule.  EPA first developed a baseline universe of
SPCC-regulated facilities by industry sector and range of oil storage
capacities (e.g., facilities that store between 1,321 and 10,000 gallons
of oil).  For each of the four major components of the final rule, EPA
estimated the number of facilities that might be affected by the changes
in the rule.  These entities include facilities with smaller volumes of
oil storage; facilities with certain types of oil-filled operational
equipment; facilities with motive power containers; and facilities with
mobile refuelers.  EPA then projected the anticipated annual change in
the number of affected facilities over the analysis period, using
industry-specific growth rates. 

Estimate changes in compliance cost elements resulting from the final
rule.  EPA developed unit cost estimates for specific baseline
requirements expected to be affected by the final rule.  Baseline
requirements were based on the 2002 rule.  EPA also developed unit cost
estimates for compliance elements introduced by the 2006 final rule,
such as the cost of preparing a contingency plan instead of providing
secondary containment for qualified oil-filled operational equipment. 
EPA did not analyze cost savings associated with non-substantive changes
to requirements for facilities that handle, store, or transport fats and
vegetable oils, or cost savings associate with the extension of the
compliance dates for owners and operators of farms.

Estimate total reduction in compliance costs to potentially affected
facilities.  EPA derived the change in compliance costs for owners and
operators of each type of affected facilities, and multiplied these cost
savings by the total number of facilities whose owners and operators are
expected to take advantage of a given regulatory relief option.  Total
compliance cost savings were annualized over a ten-year period using 3
and 7 percent discount rates. 

	EPA analyzed changes in compliance costs as a result of the provisions
in the SPCC final rule, by accounting for cost savings owners and
operators of SPCC-regulated facilities would incur if they took
advantage of the reduced requirements.  The cost savings for owners and
operators of regulated facilities from lessened requirements are
evaluated against the current SPCC rule amended in 2002.  Therefore, in
this analysis, the Agency took into account only the difference in the
requirements between the 2002 and 2006 rules.  When estimating total
cost savings, EPA relied on the most recent estimates of the major
components of the economic model.  In comparison to the analysis
performed for the 2002 SPCC rule, the following inputs into the model
have been updated: the universe of the SPCC-regulated facilities,
projected growth rates for SPCC-regulated industries, and cost estimates
for major compliance activities.  Chapters   REF _Ref140639946 \r  4 
and   REF _Ref140639955 \r  5  of this report contain detailed
information on how the new estimates were developed.  Chapter 4
describes the estimation of the universe of regulated facilities under
the SPCC rule and annual growth rates, and Chapter   REF _Ref140639966
\r  5  presents the derivation of unit estimates for compliance costs.

	The benefits of the major components of the final rule were assessed
qualitatively and are limited to reductions in expenditures accruing
from lower compliance costs.  The Agency also considered whether the
streamlined requirements in the final rule might increase the risk of
discharges, with adverse consequences for the environment, human health,
and welfare.  Because of the lack of data on regulated entities and
their likely response to the regulatory changes, the magnitude of any
increased risk is highly uncertain, but is considered low because of the
safeguards built into the final rule.  For example, if an owner or
operator pursues environmental equivalence options, he or she must
consult with a PE.  In addition, to the extent that the rule increases
the compliance rate by lowering compliance costs, the rule may have a
positive impact on environmental quality.

Exhibit   STYLEREF 1 \s  3 -  SEQ Exhibit \* ARABIC \s 1  1   SEQ
CHAPTER \h \r 1 

Main Steps for Estimating the Economic Effects of the Final Rule Changes

 

  SEQ CHAPTER \h \r 1 Regulatory Baseline for the Analysis

The impacts of the final rule depend on the assumed baseline of industry
behavior in the absence of a new rule.  EPA developed a baseline to
assess the change in compliance costs associated with each of the
revisions in rule requirements, mutually exclusive of each other. 
Changes in regulatory behavior caused by the final rule are measured
relative to this baseline.  

EPA used as its baseline the SPCC rule requirements under 40 CFR part
112, as amended in 2002 (67 FR 47042).  EPA has not made any assumptions
about current compliance with those requirements, but is treating the
costs of compliance with the 2002 rule as liabilities owners and
operators of the regulated entities currently have – whether or not
they have actually made the capital expenditures to comply.  In this
analytical construct, these firms are simply delaying the expenditures
for the costs they already carry.

  

EPA is aware of industry concerns regarding potential non-compliance
among owners and operators of facilities of certain sizes or industry
sectors, although no reliable empirical evidence exists to assess the
extent or magnitude of such non-compliance.  EPA explicitly considered
whether to incorporate non-compliance in the 2002 Economic Analysis of
the SPCC rule: 

“It is possible that [owners and operators of] some facilities have
misinterpreted the existing regulation and are not currently in full
compliance with existing requirements, but there is no practical way to
measure the level of non-compliance.  Moreover, ... the costs of coming
into compliance with the clarified requirements are not properly
attributed to this final regulation.”

	This regulatory impact analysis is intended to account for the
reductions in compliance costs resulting from the final rule.  EPA
recognizes, however, that actual changes in expenditures depend on the
degree of compliance with SPCC requirements by owners and operators of
the facilities that would be affected by this rule.  Owners and
operators of existing facilities that are out of compliance with the
current rule would potentially face lower expenditures to comply with
the final rule.  To better understand the impacts of the final rule on
these facilities, EPA prepared an alternative economic impact analysis
(see Appendix F).

	According to Executive Order 12866, agencies are required to assess all
costs and benefits of regulatory activities, including quantitative and
qualitative measures.  In this regulatory impact analysis, the Agency
estimated the incremental change in compliance costs as a result of the
2006 final rule.  The cost savings for owners and operators of regulated
facilities from lessened requirements are measured against the current
SPCC rule amended in 2002.  This regulatory impact analysis does not
attempt to quantify the baseline compliance costs associated with the
2002 SPCC rule requirements. 

Although major compliance activities and their associated unit costs are
presented in Chapter   REF _Ref140639979 \r  5  of this report, those
activities do not represent a full list of SPCC rule requirements.  

As described in the Unit Compliance Costs (Chapter 5) and Limitations
(Chapter 12) chapters of this report, a lot of cost estimates for
compliance activities were adapted from the economic analysis in support
of the 2002 SPCC final rule and the 2002 rule Information Collection
Request (ICR).  The Agency did not develop unit cost estimates for the
baseline compliance activities that are not affected by the final rule
as part of this regulatory analysis.  For example, while EPA developed a
cost estimate for providing secondary containment for facilities with
oil-filled operational equipment that is affected by the final rule
changes, it did not attempt to quantify costs of secondary containment
for facilities of other industries, as required by the 2002 rule.

Estimation of the SPCC-Regulated Universe of Facilities

EPA has invested considerable resources into estimating the number of
entities affected by the SPCC rule.  This chapter represents the
Agency’s third effort to estimate the universe of affected entities. 
Using information contained within previous studies and new information,
the current study estimated that 571,000 facilities are regulated under
the 2002 SPCC rule.  This chapter provides an overview of the data
sources used in the analysis, industry sectors and oil storage
capacities in which results are presented, and a summary of results. 
Appendices A – D of this report provide additional detail on the
methodology employed in the analysis, as well as detailed results.

This chapter is organized as follows: 

Section   REF _Ref140640679 \r  4.1  summarizes the data sources and
industry sectors studied in the analysis.

Section   REF _Ref140640692 \r  4.2  summarizes oil capacity categories
used in the analysis.

Section   REF _Ref140640701 \r  4.3  discusses key differences between
the current study and EPA’s 1991 study of the SPCC-regulated universe.

Section   REF _Ref140640711 \r  4.4  discusses the SPCC universe
estimation using state databases.

Section   REF _Ref140640721 \r  4.5  discusses the SPCC universe
estimation using federal and proprietary data sources.

Section   REF _Ref140640734 \r  4.6  presents detailed results of
SPCC-regulated facilities in all industries and oil storage capacity
categories.

Section   REF _Ref140640744 \r  4.7  discusses advantages and
limitations to the universe study.

Section   REF _Ref140640753 \r  4.8  summarizes growth rates derived to
project the number of SPCC-regulated facilities to 2017.

Section   REF _Ref140640761 \r  4.9  summarizes SPCC-regulated facility
characteristics.

Data Sources and Industry Sectors

	Based on the availability and relevance of existing data on oil
storage, handling, and use in the United States, EPA used different data
sources to estimate the number of SPCC-regulated facilities in different
industries.    REF _Ref140569075  \* MERGEFORMAT  Exhibit 4-1 
summarizes the 30 industries examined in the analysis, the corresponding
North American Classification System (NAICS) codes for these industries,
and the data source used to estimate the universe of SPCC-regulated
facilities contained within each industry. 

Exhibit   STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  1 

Industry Sectors and Databases Used to Estimate SPCC-Regulated
Facilities

Industry Sector	NAICS Code	General Data Source1

Oil Production	211111	EIA

Farms	111, 112	Census of Agriculture

Electric Utility Plants	2211	EIA2, FERC3

Petroleum Refining and Related Industries	324	Economic Census

Chemical Manufacturing	325	State Databases

Food Manufacturing	311, 312	State Databases

Manufacturing facilities using and storing animal fats and vegetable
oils (AFVO)	311, 325	Economic Census

Metal Manufacturing	331, 332	State Databases

Other Manufacturing	31-33	State Databases

Real Estate Rental and Leasing	531-533	State Databases

Retail Trade	441-446, 448,451-454	State Databases

Contract Construction	23	State Databases

Wholesale Trade	42	State Databases

Other Commercial	492,541,551,561-562	State Databases

Transportation	481-488	State Databases

Arts Entertainment & Recreation	711-713	State Databases

Other Services (Except Public Administration)	811-813	State Databases

Petroleum Bulk Stations and Terminals	4247	Economic Census

Education 	61	CBECS4

Hospitals & Other Health Care	621, 622	State Databases

Accommodation and Food Services	721, 722	State Databases

Fuel Oil Dealers	45431	Economic Census

Gasoline stations 	4471	Economic Census

Information, Finance and Insurance	51, 52	State Databases

Mining	212	State Databases

Warehousing and Storage	493	State Databases

Religious Organizations	813110	CBECS

Military Installations	928110	Department of Defense

Pipelines	4861, 48691	Economic Census

Government	92	CBECS

NAICS = North American Industry Classification System; EIA = U.S. Energy
Information Administration; FERC = Federal Energy Regulatory Commission;
CBECS = Commercial Buildings Energy Consumption Survey.

1 	See Appendix A for a detailed description of data sources. 

2 	EPA used EIA data on oil stocks at each electric utility plant to
estimate the number of power plants in each oil storage capacity
category.

3 	EPA used FERC information on substations by major utilities to
estimate the number of substations.

4 	The CBECS is a nationwide survey that contains information on fuel
storage and use by commercial buildings that EPA used to generate
estimates of the number of government, religious, and educational
establishments that are SPCC-regulated.

As shown in   REF _Ref140569075  \* MERGEFORMAT  Exhibit 4-1 , EPA used
state databases to estimate SPCC-regulated facilities in 18 of the 30
industry sectors studied in the analysis.  Eight state databases were
used to generate estimates for the following industries: petroleum
refining and related industries; chemical manufacturing; food
manufacturing; metal manufacturing; other manufacturing; real estate
rental and leasing; retail trade; contract construction; wholesale
trade; other commercial; transportation; arts, entertainment, and
recreation; other services (except public administration); hospitals and
other health care; accommodation and food services; information finance
and insurance; mining; and warehousing and storage.  These databases are
discussed in more detail in Appendix A.

Although state databases were the primary data source for the majority
of industry sectors, federal and proprietary data were available and
used to estimate the number of facilities in the sectors with the most
facilities regulated by the SPCC rule: farms; petroleum bulk station and
terminals, fuel oil dealers, pipelines, and petroleum refinery and
related industries; oil and gas production; electric utilities;
airports; military installations; animal fats and vegetable oil
industry; and education facilities, government establishments, and
religious organizations.  These data sources are discussed in more
detail in Appendix A.  

Facility Oil Storage Capacity Categories

	For each of the 30 industry sectors examined in the analysis, EPA
disaggregated the universe of SPCC-regulated facilities into the
following four oil storage capacity categories:

Category I:  total oil storage capacity greater than 1,320 gallons but
less than or equal to 10,000 gallons;

Category II:  total oil storage capacity greater than 10,000 gallons but
less than or equal to 42,000 gallons;

Category III:  total oil storage capacity greater than 42,000 gallons
but less than or equal to 1,000,000 gallons; and

Category IV:  total oil storage capacity greater than 1,000,000 gallons.

	The smallest size category in previous EPA analyses included facilities
with storage greater than 1,320 gallons but less than or equal to 42,000
gallons.  One benefit of the categories contained within the current
analysis is the ability to differentiate the characteristics of
facilities with storage capacities between 1,321 and 10,000 gallons from
those facilities with storage capacities between 10,001 and 42,000
gallons.

Comparison with EPA’s 1991 Facilities Study 

	While the current analysis follows the same general methodology as
EPA’s 1991 study, the two analyses differ in four primary ways: (1)
the specific state databases used; (2) the number of industry sectors
and the method used to group facilities into industry sectors; (3) the
oil storage capacity categories; and (4) the methodology used to
extrapolate state data to the entire universe of SPCC-regulated
facilities.    REF _Ref140569404  Exhibit 4-2  summarizes these
differences.Exhibit   STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  2

Comparisons with EPA’s 1991 Facilities Study

Element of Analysis	1991	2006	Notes

Number of

State Database Sources	Four	Eight	EPA’s 1991 study used Illinois,
California, Maryland, and New York databases to estimate the universe of
medium and large facilities, and the New York database alone to estimate
the universe of small facilities.

The current analysis does not use the Illinois data because the latest
version of the database does not include capacity information for
two-thirds of the records.  The current analysis also does not use the
California database because it lacks capacity information for one-fifth
of the records and does not differentiate Aboveground Storage Tanks
(ASTs) from Underground Storage Tanks (USTs).  

In EPA’s 1991 study, the estimate for the small facilities category
was calculated separately for most industry sectors using the New York
Major Facilities database, because this database contains a reliable
representation of these facilities.  EPA was not able to use this
database to estimate the overall universe because it did not provide
complete industry sector information.  

The current analysis matches industry sector data from the Dun &
Bradstreet (D&B) database with state database information.  EPA is able
to use the New York database (along with the other state databases) to
estimate the number of SPCC-regulated facilities in all capacity
categories. 

Number of Industry Sectors	Sixteen 	Thirty	The current analysis examines
30 industry sectors, using D&B data to help derive more detailed
information on affected industries.  However, because previous estimates
grouped a large number of facilities into the broad industry sector of
"Other Commercial Facilities," it is difficult to determine the extent
to which the new figures include previously omitted industries. 

The 1991 study focused solely on petroleum and petroleum-related oils. 
The current analysis attempts to include facilities that may be
regulated because of their use or storage of animal fats and vegetable
oils (AFVO).  

Number of Oil Storage Capacity Categories	Three	Four	EPA’s 1991 study
examined the following oil storage capacity categories:

Small facilities: total oil storage capacity greater than 1,320 gallons
but less than or equal to 42,000 gallons.

Medium facilities: total oil storage capacity greater than 42,000
gallons but less than or equal to one million gallons.

Large facilities: total oil storage capacity greater than one million
gallons.

The current analysis differentiates the characteristics of facilities
with storage capacities between 1,320 and 10,000 gallons from those
facilities with storage capacities between 10,001 and 42,000 gallons.

Extrapolation to the SPCC-Regulated Universe	Mid-point	Average Ratio	The
current analysis uses the average ratio because the universe
extrapolation is based on a larger number of facilities combining data
from more than one state.

SPCC Universe Estimation Using State Databases 

EPA used information on facility oil storage capacity contained within
eight state databases to estimate the number of SPCC-regulated
facilities in the following industry sectors: petroleum refining and
related industries; chemical manufacturing; food manufacturing; metal
manufacturing; other manufacturing; real estate rental and leasing;
retail trade; contract construction; wholesale trade; other commercial;
transportation; arts, entertainment, and recreation; other services
(except public administration); hospitals and other health care;
accommodation and food services; information finance and insurance;
mining; and warehousing and storage.  The estimation methodology
employed was similar to that used in EPA’s 1991 facilities study:
SPCC-regulated facilities were identified in the state databases based
on oil storage capacity, corresponding industry categories for all
facilities were identified, and state data were extrapolated to the
entire country to represent the SPCC-regulated universe nationwide.  In
total, EPA identified 140,000 SPCC-regulated facilities in the eight
state databases.  Some 41,000 of those facilities were matched to
specific industry categories and then extrapolated to the entire
universe using U.S. Census data, yielding a total of 177,000 regulated
facilities.  The following sections expand upon each methodological step
used to calculate the universe estimate.

Identification of SPCC-Regulated Facilities in State Databases

	In the current analysis, EPA used eight state databases (Florida,
Kansas, Maryland, Minnesota, New York, Oklahoma, Virginia, and
Wisconsin) to determine the number of SPCC-regulated facilities in the
given state for each industry sector by capacity tier.  EPA selected
these particular state databases because they contain necessary
information on the total number of tanks at each facility, the capacity
of each tank, and tank contents.  The databases also contain name and
address information for each facility.  EPA identified SPCC-regulated
facilities in each oil storage capacity category using these data.  As
stated, in total, EPA identified 140,000 SPCC-regulated facilities in
the eight state databases.    REF _Ref140570318  \* MERGEFORMAT  Exhibit
4-3  summarizes details of the eight state databases used.  Exhibit  
STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  3 

Summary of State Databases Used in the Analysis

State	Data Source	Database Name	Regulatory Requirement1	Data Fields
Number of Records

Florida	Florida Department of Environmental Protection (FDEP)	Storage
Tank Facility Information	FDEP’s Storage Tank Program regulates USTs
larger than 110 gallons and ASTs greater than 550 gallons that store
petroleum products and hazardous substances at non-residential
facilities.	Tank capacity

Material stored

Facility name & address

Facility type	22,800 ASTs and 61,000 USTs at 20,900 facilities

Kansas	Kansas Department of Health & the Environment (KDH&E)	Permitted
Tanks Database	KDH&E regulates petroleum ASTs and USTs larger than 1,100
gallons for farm and residential use, and petroleum ASTs and USTs larger
than 660 gallons for other industries.	Tank capacity

Material stored

Tank status

Facility name & address	6,450 USTs at 2,380 facilities

9,580 ASTs at 3,360 facilities

Maryland	Maryland Department of the Environment (MDE)	AST Oil Operations
Database	MDE’s Oil Control Program regulates petroleum storage tanks.
Registration required for ASTs at facilities with at least 10,000
gallons of storage capacity or at least 1,000 gallons of storage
capacity for used oil.	Tank capacity

Material stored

Facility name & address

Facility four-digit SIC 	6,330 ASTs at 691 facilities

Includes only tanks currently in use or temporarily closed.

UST Oil Operations Database	Registration required for all petroleum USTs
with the exception of farm and residential USTs smaller than 1,100
gallons.	Tank capacity

Material stored

Facility name & address

Industry sector	13,000 USTs at 5,660 facilities

Includes only tanks currently in use or temporarily closed.

Minnesota	Minnesota Pollution Control Agency (McPCA)	Tanks Database
Registration required for petroleum ASTs larger than 500 gallons and
petroleum USTs covered by EPA’s UST program.	Tank capacity

Material stored

Facility name & address

Facility category	13,700 USTs at 7,570 facilities

22,900 ASTs at 6,010 facilities

Includes only tanks currently in use or temporarily closed.

New York	New York State Department of Environmental Conservation (DEC)
Petroleum Bulk Storage Database	DEC’s Petroleum Bulk Storage Program
regulates petroleum storage at facilities with at least 1,100 gallons of
storage capacity.	Tank capacity

Material stored

Tank status

Facility name & address	65,500 tanks at 55,800 facilities

Major Oil Storage Facilities Database	DEC’s Major Oil Storage
Facilities Program regulates petroleum terminals and transport vessels
operating in New York waters with a total storage capacity of 400,000
gallons or more.	Tank capacity

Material stored

Tank status

Facility name & address	9,180 tanks at 344 facilities

Oklahoma	Oklahoma Corporation Commission (OCC)	Petroleum Storage Tank
Database	Registration required for petroleum USTs over 1,100 gallons for
residential and noncommercial agricultural use, and over 110 gallons for
all other uses.  Petroleum ASTs larger than 110 gallons at certain
specified facilities and all petroleum ASTs at bulk plants and
commercial facilities require registration. 	Tank capacity

Material stored

Tank status

Facility name & address	4,780 ASTs at 2,020 facilities

Virginia	Virginia Department of Environmental Quality (DEQ)	Registered
Tanks Database	Registration required for petroleum ASTs over 660 gallons
or facilities with a total capacity greater than 1,320 gallons.  USTs
regulated under EPA’s UST Program are included in the database.	Tank
capacity

Material stored

Tank status

Facility name & address

Industry sector	8,010 ASTs at 3,000 facilities

27,000 USTs at 10,500 facilities

Wisconsin	Wisconsin Department of Commerce	Storage Tank Database
Registration required for all USTs larger than 60 gallons and storing
petroleum or CERCLA hazardous substances.  Farm and residential ASTs
larger than 1,100 gallons, and all other ASTs larger than 110, gallons
are registered and included in the database.	Tank capacity

Material stored

Tank status

Facility name & address	70,500 currently in-use tanks

7,960 ASTs and 60,200 USTs at 44,900 facilities

1	AST = aboveground storage tank; UST = underground storage tank.

Fuzzy Matching Methodology

While each state database used in the analysis contained sufficient
information to permit identification of SPCC-regulated facilities, six
of the eight databases did not contain information on the industry to
which a particular facility belongs.  Therefore, in order to identify
the industry represented by the SPCC-regulated facilities identified in
the state databases, EPA employed a “fuzzy matching” methodology in
which facility data such as name and address from the state databases
were matched to D&B Market Spectrum data in order to assign industries
to facilities.,,  Appendix B of this analysis discusses the fuzzy
matching methodology in greater detail.  Of the 140,000 SPCC-regulated
facilities in the eight states, approximately 31 percent were matched
successfully.    REF _Ref140570553  Exhibit 4-4  summarizes the
percentage of matched facilities in each state database used in the
analysis.  As shown, these percentages range from 21 percent for the
Wisconsin database to 81 percent for the Kansas database.  Assuming that
the matched facilities are not systematically different from the
unmatched ones, the distribution of matched facilities in each industry
sector was applied to all facilities in that industry sector at the
national level.  

Exhibit   STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  4 

Percentage of Matched Facilities after Automated and Manual Matching

State	Total Number of Records	Percentage Matched	Scale Factor1

Florida	24,600	35%	2.9

Kansas	3,060	81%	1.2

Maryland	6,430	53%	1.9

Minnesota	6,930	43%	2.4

New York	38,700	28%	3.6

Oklahoma	1,190	45%	2.3

Virginia	11,900	36%	2.8

Wisconsin	47,500	21%	4.8

1 	The scale factor is calculated as one divided by the percentage of
matched facilities, and reflects the proportion of facilities that
matched relative to the total number of SPCC-regulated facilities from
the state databases.  The number of matched facilities is multiplied by
the scale factor to estimate the total number of SPCC-regulated
facilities for each industry within each state database.  By using the
scale factor, EPA assumed that the distribution of facilities across
industries is identical for matched and unmatched facilities.  To the
extent this assumption is incorrect, the estimate of total facilities
per industry in each state may be over or underestimated. 

Extrapolation of Results to the Entire Universe

EPA extrapolated results to the entire country by multiplying the total
number of establishments in each industry sector in the United States as
contained within the 1997 U.S. Economic Census by a facility ratio, as
shown in the equation below.   The facility ratio is estimated as the
number of SPCC-regulated facilities in the eight states for an industry
sector divided by the total number of facilities reported for that
industry sector in those states.    REF _Ref140570876  Exhibit 4-5 
summarizes the results of the analysis.

       Total Universe of SPCC-Regulated Facilities = ( [(Fi * (RFi,c /
TFi )

where,

F = the total number of facilities in the United States by industry
sector, i

RF = the total number of SPCC-regulated facilities in the eight state
databases by facility size category, c, and industry sector, i

TF = the total number of facilities in the eight state databases by
industry sector, i

i = facility industry sector

c = facility size category

Exhibit   STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  5 

SPCC Universe Estimates Using State Databases

Industry Sector	Category I	Category II	Category III	Category IV	Total

Petroleum Refining and Related Industries	 85 	             212 	       
1,300 	         424 	          2,000 

Chemical Manufacturing	          1,100 	             941 	           575
	           26 	          2,600 

Food Manufacturing	          1,700 	          1,300 	           510 	   
       23 	          3,500 

Metal Manufacturing	          1,600 	             712 	           398 	 
          -   	          2,700 

Other Manufacturing	          9,000 	          5,300 	        1,600 	   
     107 	        16,000 

Real Estate Rental and Leasing	        23,000 	          2,900 	        
  212 	            -   	        26,000 

Retail Trade	        14,000 	          2,700 	           819 	          
50 	        18,000 

Contract Construction	        11,000 	          3,700 	           703 	 
         19 	        15,000 

Wholesale Trade	          9,600 	          3,000 	        2,100 	       
   98 	        15,000 

Other Commercial	        10,000 	          2,800 	           762 	      
     -   	        14,000 

Transportation	          7,800 	          4,400 	           638 	       
 641 	        13,000 

Arts Entertainment & Recreation	        11,000 	          1,200 	       
     94 	            -   	        13,000 

Other Services	          6,200 	             653 	           162 	      
     -   	          7,100 

Hospitals and Other Health Care	          5,200 	          1,200 	      
    194 	           27 	          6,600 

Accommodation and Food Services	          4,400 	             381 	     
       33 	            -   	          4,800 

Information Finance and Insurance	             318 	          1,700 	   
    2,300 	         212 	          4,600 

Mining	          1,900 	          1,200 	           791 	           40 	
         4,000 

Warehousing and Storage	             725 	             333 	          
306 	           28 	          1,400 

Total	119,000	34,600	13,500	1,700	169,000

SPCC Universe Estimation Using Industry-Specific Data Sources

Where federal government and proprietary data specific to certain
industry sectors were available, EPA did not rely on the state databases
to estimate the universe of SPCC-regulated facilities.  Instead, EPA
used different methodologies based on the composition of the specific
industry data.  Industry-specific data were used to estimate the number
of SPCC-regulated facilities in 12 industry sectors, grouped as follows:
 

Farms; 

Petroleum bulk station and terminals, fuel oil dealers, pipelines, and
petroleum refinery and related industries; 

Oil and gas production; 

Electric utilities; 

Military installations; 

The animal fats and vegetable oils (AFVO) industry; and 

Education facilities, government establishments, and religious
organizations.  

  REF _Ref140570630  Exhibit 4-6  summarizes the federal and proprietary
data sources used in the analysis; Appendix A presents a detailed
description of these data sources.   Exhibit   STYLEREF 1 \s  4 -  SEQ
Exhibit \* ARABIC \s 1  6 

Summary of Federal and Proprietary Data Sources and Methodologies Used
in the Analysis

Industry Sector	Data Source	Database Name	Primary Data Fields Used
General 

Methodology

Farms	USDA Census of Agriculture

	Farm Production Expenses, 2002 and 1997 Gasoline, fuels, and oils	Fuel
production expenses	Identify the number of farms and fuel production
expense ranges for gasoline and diesel.

Convert production expense ranges to quantity ranges using fuel price
data.

Estimate the quantity of purchased fuel that is stored on farms.

Estimate the percentage of farms in each quantity range that are
regulated.

Project estimated number of farms from 2002 to 2005.

Petroleum Products Expenses, 1997, 1992, and 1987	Cost ranges for
gasoline and diesel

	1982 Census, Volume 1, County Table 6.	Quantity of stored fuel

	NASS, Number of Farms 1996 to 2005	Number of farms

	Petroleum Bulk Station and Terminals, Fuel Oil Dealers, Pipelines, and
Petroleum Refinery and Related Industries	US Census Bureau	2002 US
Economic Census	Total number of facilities

	Assume all facilities in these industries are SPCC-regulated.

Project number of facilities to 2005.

Oil and Gas Production	Personal Communication	Personal communication
with EPA Region 6 and Texas Railroad Commission	Assumption of four wells
per facility	Assume all active oil wells and gas wells producing
condensate oil in 2004 are SPCC-regulated.

Assume four wells per facility.

Project number of facilities to 2005.

	Department of Energy	Energy Information Administration Distribution and
Production of Oil and Gas Wells by State	Number of active wells
producing oil and oil condensate in 2004

	Electric Utilities	US Energy Information Administration	Form EIA-906
Oil stock at each power plant with generation capacity greater than 1
megawatt	Estimate SPCC-regulated power plants based on oil stocks as a
proxy for oil capacity.

Assume each unique substation filing Form EIA-906 is SPCC-regulated.

Extrapolate to universe of regulated substations using ratio of electric
power sold by Form EIA-906 substations to electric power sold
nationally.

March 2005 Electric Power Monthly	Total retail megawatt hours of
electricity sold nationwide

Federal Energy Regulatory Commission	Form No. 1	Number of electric
substations

	Military Installations	Department of Defense	Total Military
Installations (1995)	Total number of military Installations	Assume all
military installations are SPCC-regulated.

AFVO	US Census Bureau	2005 US Census of Manufacturing	Number of
manufacturing establishments	Assume a percentage of manufacturing
facilities that produce, use, or store AFVO and may be SPCC-regulated.

Apply these percentages to the number of facilities in manufacturing
NAICS code categories.

Assume all corn refining plants are SPCC-regulated.

Use specific information on soy ink from industry to assume the
proportion of facilities that are SPCC-regulated.

2002 US Economic Census	Number of facilities by NAICS code

Corn Refiners Association	N/A	Number of corn refining plants

Soy ink	US manufacturers producing soy ink	Number of US manufacturers
producing soy ink

	Education, Religious Organizations, and Government Establishments
Department of Energy

 	Energy Information Administration: 1995 and 2003 Commercial Buildings
Energy Consumption Survey (CBECS)	Total tank capacity in 1995

Square footage of buildings in 1995 and 2003	Project tank capacity in
1995 to 2003, using the growth in square footage of buildings from 1995
to 2003 as a proxy for growth in tank capacity.

Project 2003 estimates to 2005.

	For petroleum bulk stations and terminals, military installations, oil
production, and electric utilities, data were available on the total
universe of these facilities and their corresponding oil storage
capacity information.  Therefore, a direct estimation of the number of
SPCC-regulated facilities was possible for these industry sectors.  For
the other industry sectors, EPA used reasonable assumptions to estimate
the universe of SPCC-regulated facilities.  Details of the
industry-specific estimation methodology followed for each industry are
presented in Appendix C.

	  REF _Ref140570937  Exhibit 4-7  summarizes the results of the
analysis for industries discussed in this section.  As shown, EPA
estimated that approximately 401,000 facilities are regulated in these
industries.

Exhibit   STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  7 

SPCC Universe Estimate Using Federal Databases

Industry Sector	Category I	Category II	Category III	Category IV	Total

Farms	145,000	7,060	569	114	152,000

Petroleum Bulk Stations and Terminals	564	846	4,370	799	6,580

Fuel Oil Dealers	318	1,700	2,340	212	4,560

Pipelines	704	0	0	0	704

Petroleum Refining and Related Industries	85	212	1,270	424	1,990

Oil Production	21,200	114,000	30,100	295	166,000

Electric Utility Plants	19,400	19,500	12,900	309	52,100

Military Installations	156	156	284	114	710

Manufacturing facilities using and storing AFVO	2,610	3,430	1,580	0
7,620

Education	1,870	5,050	0	0	6,920

Government 	552	0	0	0	552

Religious Organizations	1,410	0	0	0	1,410

Total	192,000	148,000	58,500	2,270	401,000

Estimates of the Total SPCC Universe

	  REF _Ref140570981  Exhibit 4-8  presents the number of facilities
regulated by the SPCC rule for each industry group considered in the
analysis.  As shown, EPA estimated that approximately 571,000 facilities
are regulated by the 2002 SPCC rule.  The majority of the regulated
facilities are in Category I (56 percent), followed by the capacity
tiers for Category II (33 percent) and Category III (11 percent). 
Facilities in Category IV account for less than 1 percent of the total
facilities regulated by the SPCC. 

	Oil production (29 percent) and farms (27 percent) account for the
largest percentages of the SPCC-regulated facilities.  The electric
utility plant industry (9 percent) is the only other industry sector
that accounts for more than 5 percent of the total SPCC-regulated
facilities.Exhibit   STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  8 

Estimated Universe of SPCC-Regulated Facilities

Industry Category	NAICS	Facility Oil Storage Capacity Category	Total
Percentage

I	II	III	IV

Oil Production	211111	21,235	114,000 	30,100 	295 	166,000 	29.07%

Farms	111,112	144,608	7,100 	569 	114 	152,000 	26.62%

Electric Utility Plants	2211	19,403	20,000 	13,000 	309 	52,000 	9.11%

Petroleum Refining and Related Industries	324	85	212 	1,300 	424 	2,000 
0.35%

Chemical Manufacturing	325	1,063	941 	575 	26 	2,600 	0.46%

Food Manufacturing	311,312	1,676	1,300 	510 	23 	3,500 	0.61%

Manufacturing facilities using and storing AFVO	311,325	2,609	3,400 
1,600 	-   	7,600 	1.33%

Metal Manufacturing	331,332	1,635	712 	398 	-   	2,700 	0.47%

Other Manufacturing	31-33	9,020	5,300 	1,600 	107 	16,000 	2.80%

Real Estate Rental and Leasing	531-533	23,205	2,900 	212 	-   	26,000 
4.55%

Retail Trade	441-446, 448,451-454	14,271	2,700 	819 	50 	18,000 	3.15%

Contract Construction	23	10,752	3,700 	703 	19 	15,000 	2.63%

Wholesale Trade	42	9,580	3,000 	2,100 	98 	15,000 	2.63%

Other Commercial	492,541,551,561-562	10,272	2,800 	762 	-   	14,000 
2.45%

Transportation	481-488	7,761	4,400 	638 	641 	13,000 	2.28%

Arts Entertainment & Recreation	711-713	11,197	1,200 	94 	-   	13,000 
2.28%

Other Services (Except Public Administration)	811-813	6,240	653 	162 	- 
 	7,100 	1.24%

Education 	611	1,872	5,000 	-   	-   	6,900 	1.21%

Petroleum Bulk Stations and Terminals	4247	564	846 	4,400 	799 	6,600 
1.16%

Hospitals & Other Health Care	621-624	5,151	1,200 	194 	27 	6,600 	1.16%

Accommodation and Food Services	721-722	4,419	381 	33 	-   	4,800 	0.84%

Fuel Oil Dealers	45431	318	1,700 	2,300 	212 	4,600 	0.81%

Gasoline stations 	4471	1,950	1,200 	791 	40 	4,000 	0.70%

Information Finance and Insurance	51, 52	3,352	514 	31 	-   	3,900 
0.68%

Mining	212-213	1,297	1,500 	321 	40 	3,200 	0.56%

Religious Organizations	813110	1,407	-   	-   	-   	1,400 	0.25%

Warehousing and Storage	493	725	333 	306 	28 	1,400 	0.25%

Military Installations	928110	148	148 	296 	118 	711 	0.12%

Pipelines	4861, 48691	704	-   	-   	-   	704 	0.12%

Government	92	552	-   	-   	-   	552 	0.10%

Total	317,070	187,000	64,000 	3,400 	571,000 	100% 

Size Distribution	55.5%	32.8%	11.1%	0.6%	100%

	Advantages and Limitations of the Updated SPCC Universe Estimate

	This analysis improves upon previous estimates of the SPCC-regulated
universe in several ways.  First, the analysis is based on the most
recent data available, capturing changes in industry structure since
1995.  Second, the analysis relies on information from more state
databases (eight as compared to four) than what was used in EPA’s 1991
facilities study.  Further, in the 1991 study EPA assumed that all
electric utility plants were SPCC-regulated; the current estimates are
based on oil capacity data, as reported by EIA.

Another advantage of the current estimates is that they provide
information for more narrowly defined industry sectors.  The 1991 and
1995 studies primarily focused on petroleum and petroleum-related oils. 
The updated estimate attempts to include facilities that may be
regulated because of their use or storage of non-petroleum oils such as
AFVO.

A key limitation of the updated estimates is that they are not based on
survey data and, therefore, are not statistically reliable.  State and
federal databases are useful, but are not specifically designed to
capture information on the full range of facilities covered by the SPCC
rule.  A statistical survey would be required to obtain complete
coverage of all industries with SPCC-regulated facilities. 
Nevertheless, EPA previously concluded that schedule and resource
constraints would prohibit such an effort at this time.  Moreover, a
rigorous survey may not be worthwhile for industries that contain a
small percentage of the total number of SPCC-regulated facilities.

Another significant limitation to the current approach is that it did
not consider the spatial location of facilities to determine the number
that presents a reasonable expectation of discharge into navigable
waters of oil in quantities that may be harmful.  Instead, EPA assumed
that all facilities satisfying the capacity threshold are
non-transportation-related and are regulated by the SPCC rule, which may
be an overestimate.  A Geographic Information System (GIS) screening
analysis could theoretically help to identify facilities that are less
likely to be regulated, but was not feasible given the lack of spatial
information for many facilities.  In addition, the analysis would be
time-consuming and costly given the number of facilities involved.

  SEQ CHAPTER \h \r 1 Projecting SPCC Universe Estimates Using Derived
Industry Growth Rates

To project the number of existing and new facilities regulated under the
SPCC rule over the period of analysis (2008 through 2017), EPA developed
estimates of industry-specific growth rates for existing and new
facilities separately.  For existing facilities, EPA used U.S. Economic
Census data for all industries except for farms and oil production, for
which alternative data sources were used.  For new facilities, EPA used
information obtained from the D&B Market Spectrum database for all
industries except for oil production, for which a specific methodology
was employed.  The methodologies used to develop the industry growth
rate estimates are described in detail in Appendix D.    REF
_Ref140571039  Exhibit 4-9  summarizes the growth rates calculated for
each industry following these methodologies.  

Exhibit   STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  9 

Estimated Growth Rates

SPCC Industry Sector	NAICS Code	Estimated Growth Rates

Total Facilities	New Facilities

Oil Production	211111	-2.13%	0.66%

Farms	111112	-0.44%	0.89%

Electric Utility Plants	2211	3.19%	3.19%

Petroleum Refining and Related Industries	324	0.59%	1.81%

Chemical Manufacturing	325	0.27%	2.43%

Food Manufacturing	311, 312	0.65%	2.34%

Manufacturing facilities using and storing AFVO1	311, 325	0.44%	2.33%

Metal Manufacturing	331, 332	0.44%	1.47%

Other Manufacturing2	31-33	-0.18%	2.32%

Real Estate Rental and Leasing	531-533	2.06%	2.16%

Retail Trade	441-446, 448, 451-454	0.27%	2.31%

Contract Construction	23	1.91%	2.83%

Wholesale Trade	42	0.10%	2.03%

Other Commercial 	492, 541, 551, 561-562	4.42%	4.42%

Transportation	481-488	2.43%	3.07%

Arts Entertainment & Recreation	711-713	2.68%	2.68%

Other Services (Except Public Administration)	811-813	0.87%	1.88%

Education	61	4.34%	4.34%

Petroleum Bulk Stations and Terminals	4247	-5.56%	1.61%

Hospital & Other Health Care	621, 622	1.42%	1.42%

Accommodations and Food Services	721, 722	1.40%	1.67%

Fuel Oil Dealers	45431	-1.10%	1.62%

Gasoline Stations	4471	-1.07%	1.03%

Information Finance and Insurance	51, 52	2.39%	2.68%

Mining	212	-0.10%	1.50%

Religious Organizations3	813110	1.51%	1.51%

Warehousing and Storage	493	14.29%	14.29%

Military Installations3	928110	1.51%	1.51%

Pipelines	4861, 48691	-1.21%	0.86%

Government3	92	1.51%	1.51%

All Industries 

1.51%	2.24%

1  	Growth rates are based on data for two NAICS sectors that were
identified as key industries expected to produce, use, or store AFVO.

2  	Growth rates are based on data for all manufacturing sectors due to
a large number of various manufacturing sectors included in this
category.

3  	Growth rates are based on all entities, due to the lack of Census
data for specific industries.

SPCC-Regulated Facility Characteristics

For the purpose of this analysis, EPA estimated the number of regulated
facilities for four size groups based on oil storage capacity at a
facility.  EPA classified facilities into capacity categories to (1)
account for differences in the potential compliance costs experienced by
facilities of different sizes; and (2) determine the number of
facilities affected by each of the changes in the SPCC rule, based on a
facility’s storage capacity.    REF _Ref140571089  Exhibit 4-10 
summarizes the estimated number of SPCC-regulated facilities by size
category.

Exhibit   STYLEREF 1 \s  4 -  SEQ Exhibit \* ARABIC \s 1  10 

2005 Estimated Number of SPCC-Regulated Facilities by Size Category

Size Category	Aggregate Capacity	Estimated Number of Facilities

I	1,320 to 10,000 gallons	317,000

II	10,001 to 42,000 gallons	187,000

III	42,001 to 1 million gallons	  64,000

IV	Greater than 1 million gallons	    3,400

Total	571,000

All the facilities included in the analysis are further divided in two
categories: production facilities (facilities whose operations and oil
storage activities primarily involve oil production) and storage
facilities (all other industry groups).  EPA estimated that
approximately 166,000 production facilities and 405,000 storage
facilities are subject to SPCC requirements.  The Agency developed
separate estimates for the unit cost of compliance for production and
storage facilities in Categories I through IV.

  SEQ CHAPTER \h \r 1 Unit Compliance Costs

	EPA estimated changes in the compliance costs for the final rule
compared to a baseline scenario involving the regulatory requirements
for the existing rule (as amended in 2002).  Specifically, the Agency
identified individual compliance activities affected by the changes in
the rule and estimated the cost savings associated with these changes. 
This chapter describes compliance activities affected by the 2006 rule
amendments and presents unit cost estimates and underlying assumptions
for these activities.  Section   REF _Ref140640807 \r  5.1  addresses
recordkeeping and reporting activities and Section   REF _Ref140640822
\r  5.2  addresses the capital and operation and maintenance (O&M)
activities.  Compliance costs for the alternative requirements that
resulted from the revisions to the existing SPCC rule are presented in
Section   REF _Ref140640835 \r  5.3  of this chapter.  Section   REF
_Ref140640844 \r  5.4  presents the   SEQ CHAPTER \h \r 1 developed
estimates for the burden reduction associated with similarities in
requirements between state regulations and the SPCC rule.  Section   REF
_Ref140640855 \r  5.5  outlines the approach taken to annualize
estimated cost savings over a ten-year analysis period.

Recordkeeping and Reporting Activities Costs

The primary recordkeeping and reporting activities required by the SPCC
rule are the preparation and maintenance of the SPCC Plan along with the
preparation of records of inspections and tests.  In preparing a Plan, a
facility owner or operator must follow the provisions outlined in the
regulation, and include a discussion of the measures taken to meet the
SPCC requirements.  For more detailed requirements, please refer to the
Oil Pollution Prevention regulation itself (40 CFR part 112).  The main
provisions are summarized in this section.  Section   REF _Ref140641252
\r  \* MERGEFORMAT  5.1.1  focuses on primary inputs into recordkeeping
and reporting activities such as wage rates, PE certification costs, and
capital paperwork-related costs; Section   REF _Ref140641408 \r  5.1.2 
describes the activities and provides estimated costs. 

Inputs into Recordkeeping and Reporting Activities

Wage Rates

	EPA used hourly wage rates for specific labor categories to calculate
the per-facility cost associated with the rule’s paperwork
requirements.  For typical new and existing facilities, unit time
estimates for management, technical, and clerical personnel were
multiplied by the appropriate hourly wage rate and then added to
paperwork-related capital costs and PE certification costs.  The
approach used to develop a wage rate estimate is described in this
section.

	The labor wage rates for private industry were derived from the
September 2005 U.S.  Department of Labor’s Employment Cost Indices and
Levels.  The 2005 wage rates include wages and salaries; and benefit
costs, including paid leave, supplemental pay, insurance, retirement and
savings, legally required benefits, severance pay, and supplemental
unemployment benefits.  These wage rates reflect private industry
averages, which were estimated by the Bureau of Labor Statistics (BLS)
based on a survey of 35,600 occupations within 8,200 establishments in
the private sector.  These wage rates reflect industry averages, which
may underestimate the actual wages received by some SPCC-regulated
facility personnel but overestimate the actual wages received by other
facility personnel.  EPA further adjusted these rates to reflect
associated overhead costs.  The estimated wage rates used in the
analysis are as follows:

Management:  $55.7/hour;

Technical:  $47.9/hour; and

Clerical:  $25.3/hour.

PE Certification Cost

	Unless facility owners or operators have a self-certified Plan, they
are expected to incur costs associated with retaining a PE to certify
their SPCC Plans, along with any subsequent technical amendments that
are made to the Plan.  In certifying the Plan, the engineer attests to
having examined the facility and that the Plan has been prepared in
accordance with good engineering practices that satisfy the SPCC
requirements found in 40 CFR part 112.  Furthermore, whenever an owner
or operator amends its SPCC Plan, a PE must certify any technical
amendment.

	Not all facility owners and operators are expected to contract with a
PE to have their Plan certified.  Some facilities have in-house PEs that
can perform this task.  EPA assumed that the cost to a facility owner or
operator to retain an outside PE to certify the SPCC Plan varies by the
size of the facility.  EPA used this assumption because a larger
facility likely has a more complex SPCC Plan, and more complex Plan
amendments, than a smaller facility.  EPA assumed that none of the
Category I and Il facilities have an in-house PE who can certify the
facility’s Plan and that owners and operators of facilities would
retain an outside PE.  For the Category III and Category IV facilities,
EPA assumed that 50 percent of the Category III facilities and 25
percent of the Category IV facilities would retain an outside PE to
certify their SPCC Plans.  These assumptions are adapted from the 2002
rule Information Collection Request and consistent with the assumptions
used in the economic analysis in support of the 2002 SPCC final rule.

	For the 2002 rule ICR, EPA estimated that obtaining PE certification
for a new Plan would cost $1,000, $1,500, and $2,000 respectively for
Category I and II, Category III, and Category IV facilities.  EPA also
estimated that obtaining PE certification for   SEQ CHAPTER \h \r 1 any
subsequent amendments would cost respectively $500, $750, and $1,000 for
Category I and II, Category III, and Category IV facilities.  EPA
revised the cost estimate developed for the 2002 final rule for
obtaining PE certification of a new SPCC Plan and technical changes to
an existing Plan.  To revise the existing estimate, EPA contacted
representatives of five engineering firms to inquire about the cost of
PE certification for facilities with total storage capacity of 10,000
gallons or less.    SEQ CHAPTER \h \r 1 The contacted PEs were hesitant
to provide a cost for certifying a standard Plan that they did not
prepare, due to the varying quality of the Plans they have seen. 
However, they estimated a range of $1,000 to $2,000 for this service, if
the Plan was well prepared and the facility was generally compliant with
SPCC requirements.  The range of values for obtaining PE certification
for  SEQ CHAPTER \h \r 1  subsequent amendments was determined at $500
to $1,000.    SEQ CHAPTER \h \r 1 The PEs all indicated that they would
review a Plan that a facility owner or operator prepared; however, they
would not certify the Plan without first visiting the site and
inspecting all of the tanks and containment systems themselves.  

	EPA considered the information provided by engineering firms as a basis
for increasing the unit cost for PE certification, but decided not to
take a simple average of the values obtained from PEs.  The reason for
not using a mean or median is at least two-fold: (1) the telephone calls
to five engineering firms did not represent a statistically valid survey
and (2) the PEs expressed a common concern about providing certification
services alone.  Given these limitations, EPA used professional judgment
to revise the cost for PE certification by adjusting the estimates for
facilities of Categories I though IV.  Public comments received for the
proposed SPCC rule verified the reasonableness of the adjusted
estimates. 

	  REF _Ref140571144  Exhibit 5-1  summarizes the expected cost for an
owner or operator of a typical facility to retain a PE and to have a PE
certify a new Plan, as well as any subsequent amendments.

Exhibit   STYLEREF 1 \s  5 -  SEQ Exhibit \* ARABIC \s 1  1 

Cost to Retain an Outside PE for Plan Certification

Type of Facility	New Plan	Amendments

Categories I and Il	$2,000	$750 

Category III 	$2,550	$1,030 

Category IV	$3,110	$1,310 

O&M and Capital Paperwork-Related Costs

	EPA estimated that owners and operators of facilities would incur small
O&M and capital costs in complying with the SPCC requirements to
maintain the Plan and keep records (40 CFR 112.3 and 112.7(e)), and to
submit required information in the event of certain discharges of oil
(40 CFR 112.4).  EPA estimated that to maintain files, owners and
operators of new facilities would purchase file cabinets at a cost of
$200.  In the event of certain discharges, the owner or operator is
required to submit required information to the Regional Administrator
and the state agency in charge of oil pollution control activities for
the area in which it is located.  Consequently, the owner or operator
would incur costs for photocopying and postage, which are classified as
O&M costs.  EPA assumed that the typical size of a Plan would be 10
pages for a small facility; 20 pages for a medium facility; and 40 pages
for a large facility.  Assuming the cost of photocopying to be $0.11 per
page, photocopying costs are estimated to be $2.20 for a small facility;
$4.40 for a medium facility; and $8.80 for a large facility,
respectively.  EPA estimated that the cost to submit the information
through the Post Office is approximately $12.00, based on the cost to
mail a two-pound package to two different recipients.  Because only 0.15
percent of facilities are expected to incur oil discharges that trigger
an information submission, the annual capital costs to an owner or
operator of a typical facility are negligible.

Recordkeeping and Reporting Activities

	Recordkeeping and reporting activities required by the SPCC regulation
include preparing new Plans, as well as modifying and maintaining the
existing Plans.  This section describes EPA’s assumptions used when
estimating the per-facility cost associated with the rule’s paperwork
requirements.

Prepare an SPCC Plan (New Facilities)

	The owner or operator of a new facility must prepare and implement an
SPCC Plan in accordance with the requirements set forth in 40 CFR part
112.  The actual preparation of the Plan involves several separate
tasks, the majority of which EPA assumes are conducted by the facility's
technical personnel.  These tasks include:

Field investigations, which are conducted by technical personnel to
fully understand the design of the facility and to accurately predict
the areas or equipment most likely to discharge oil (this involves
predicting the flow paths of spilled oil).

A regulatory review conducted by management personnel, such that the
technical and clerical personnel in charge of actually preparing the
Plan are fully aware of all requirements in 40 CFR part 112.

A review of existing procedures conducted by technical personnel to
determine the effectiveness of the current spill prevention and control
practices employed by a facility owner or operator.

Preparation of the Plan, which involves both technical and clerical
time, as well as a final review by facility management personnel prior
to submission.

Certification by a licensed Professional Engineer (PE), which must be
conducted for each new Plan (unless a facility owner or operator has a
self-certified Plan).  A Plan must also be re-certified by a PE whenever
technical amendments are made.

	Plan preparation costs affect owners and operators of new facilities
that become subject to the SPCC rule.  New facilities are those that
will initiate operations during the ten-year period considered in the
analysis.  Owners and operators of such facilities are required to
prepare and implement their SPCC Plans within one year of initiating
facility operations.  Therefore, owners and operators of new facilities
are assumed to incur the total cost of preparing a Plan in Year 1.

Review the SPCC Plan (Existing Facilities)

	Owners or operators of an SPCC-regulated facility are required to
review and evaluate their Plans at least once every five years.  This
review is estimated to involve mostly technical personnel, who will
evaluate spill prevention and control procedures being implemented under
the current Plan, and management personnel, who will conduct a
regulatory review.  Clerical personnel will also be involved, to
complete the necessary paperwork.  An owner or operator is required to
amend his/her SPCC Plan within six months of the review to include more
effective prevention and control technology if: (1) such technology will
significantly reduce the likelihood of a discharge as described in
§112.1(b) from the facility; and (2) such technology has been
field-proven at the time of the review.  Unless a facility owner or
operator has a self-certified Plan, any technical amendments to the Plan
must also be certified by a PE prior to implementation.  Review cost
estimates are applied to an existing facility only, since an owner or
operator of a new facility would not be required to conduct the review
until five years after starting operation.

	The total cost incurred by owners and operators of existing facilities
for this review is greater if, following the review, they must amend
their Plan.  Based on best professional judgment, EPA estimated that
owners and operators of 3 percent of all existing facilities under the
baseline scenario would be required to amend their Plan as a result of
five-year reviews.

Submit Information in the Event of Certain Discharges of Oil

	In the event of certain discharges of oil into navigable waters, a
facility owner or operator must submit information described in
§112.4(a) to the Regional Administrator within 60 days.  A discharge of
oil occurring within any 12-month period that triggers the §112.4
reporting requirements is:  

A single discharge as described in §112.1(b) of more than 1,000 U.S.
gallons into or upon navigable waters; or

Two or more discharges as described in §112.1(b), each of which is over
42 U.S. gallons, into or upon navigable waters.

	Submission of information after a discharge of oil is estimated to
involve both technical personnel time for collecting the required
information, as well as time for review by management personnel before
the information is submitted.  Section 112.4(c) also requires that the
facility owner or operator submit a copy of this information to the
state agency in charge of oil pollution control activities for the area
in which the facility is located.  The Regional Administrator may
require the owner or operator of the facility to amend the SPCC Plan to
prevent and contain discharges from the facility.  Such amendments, if
uncontested by the facility owner or operator, must become part of the
Plan thirty days after the Regional Administrator responds to the
facility owner or operator concerning the proposed amendments.  The
amended Plan must then be certified by a PE prior to implementation
(unless a facility owner or operator has a self-certified Plan).  As
required by §112.4(e), amendments to the Plan must be implemented as
soon as possible, but no later than six months after the amendments
become part of the Plan.  Section 112.4(f) allows a facility owner or
operator to appeal a decision made by the Regional Administrator
requiring a Plan amendment.

Revise the SPCC Plan

	The facility owner or operator must amend his/her Plan in accordance
with §112.7 whenever there is a change in the facility's design,
construction, operation, and maintenance that materially affects the
facility's potential to discharge oil into navigable waters.  Such
facility changes may include the dismantling and removal of a container;
the addition of a new or rebuilt container; a change in the service of a
container; any physical changes or improvements to the facility; or the
construction of a new well and associated piping.  The activities to
amend the SPCC Plan as a result of these facility changes are estimated
to involve mostly facility technical personnel, as well as some clerical
personnel.  Unless a facility owner or operator has a self-certified
Plan, the amended Plan must also be certified by a PE prior to
implementation.  Such amendments to the SPCC Plan must be implemented as
soon as possible, but not later than six months after the change occurs.

Owners and operators of some fraction of SPCC-regulated facilities (new
and existing) will be required to amend their Plans as a result of
discharging oil or modifying their facility.  For the 2002 rule ICR,
based on spill data obtained from the Emergency Response Notification
System database, EPA estimated that owners and operators of
approximately 0.15 percent of all facilities would incur costs each year
due to reporting requirements related to an oil discharge.  In addition,
based on conversations with EPA regional personnel involved with the
SPCC program, EPA estimated that owners and operators of approximately
10 percent of all facilities would incur recordkeeping and reporting
costs annually as a result of facility modifications, independent of
those related to the five-year review.8

  SEQ CHAPTER \h \r 1 Maintain the SPCC Plan and Keep Records

Section 112.3 requires the owner or operator to maintain a copy of the
SPCC Plan at the facility, if the facility is normally attended for at
least four hours per day or, if not, at the nearest field office.  The
Plan must be available to the Regional Administrator for review during
normal working hours (40 CFR 112.3(e)).  In addition, a facility owner
or operator is required to maintain (and update) Plan-specific records
as outlined under §112.7(e).  Plan maintenance and recordkeeping
activities are estimated to involve almost entirely technical personnel
time, although a small amount of clerical personnel time may also be
required for these activities.

Per-facility burden hour estimates are based primarily on the best
professional judgment of staff at ABB Environmental Services, who were
experienced in preparing SPCC Plans, prior to the development of the
economic analysis in support of the 2002 SPCC final rule.  These
estimates were developed for production and storage facilities of
various sizes, and for clerical, technical/engineering, and management
hours.  The burden included new Plan preparation (site work, regulatory
review, review of existing procedures, formulating new procedures, and
preparing the Plan); Plan modification (site work, regulatory review,
review of existing procedures, formulating new or changed procedures or
recommendations, and preparing the amendment); formal review (site work,
regulatory review, review of existing procedures, and preparing the
review report); submittal of information after a discharge; and
recordkeeping requirements (maintaining the Plan, and maintaining
records of inspections and of equipment maintenance).

Estimated Paperwork-Related Activity Burden

	For the 2002 rule ICR, EPA reviewed these estimates with EPA regional
personnel involved with the SPCC program, and on several occasions EPA
has solicited public comment concerning the burden estimates.  No
commenter has provided more-complete data on the annual burden for
required information collection activities for typical facilities.  When
preparing an ICR renewal in 2004,   SEQ CHAPTER \h \r 1 EPA contacted
representatives of nine facilities affected by SPCC requirements as well
as engineering firms that prepare SPCC Plans, regarding the paperwork
burden assumptions.  The nine facilities were from the electric utility
and petroleum industries and represented various SPCC facility sizes. 
The interviews provided insight into the reasonableness of EPA’s
burden estimates, and the paperwork burden owners and operators of
facilities incur when complying with the SPCC rule.  Therefore, EPA used
these burden estimates for main paperwork-related compliance activities
in this analysis.    REF _Ref140571179  Exhibit 5-2  presents the
estimated activity burden for individual compliance items in the
baseline.

Exhibit   STYLEREF 1 \s  5 -  SEQ Exhibit \* ARABIC \s 1  2 

Baseline Activity Paperwork-Related Burden Estimates

Type of Facility1	Burden Hours	Burden Cost (2005$)

	Managerial

($55.7/hr)	Technical

($47.9/hr) 	Clerical 

($25.3/hr)	Total Labor Hours	Paperwork

O&M and Capital Costs	PE Cost

(O&M)2	 Total Labor Cost	Total Cost

Preparation of New Plan

Storage	Categories I&II	6.0	25.0	4.0	35.0	$0 	$2,000 	$1,630	$3,630 

	Category III	6.0	44.0	6.0	56.0	$0 	$2,550 	$2,590	$5,140 

	Category IV	6.0	76.0	8.0	90.0	$0 	$3,110 	$4,180	$7,290 

Production	Categories I&II	6.0	28.0	4.0	38.0	$0 	$2,000 	$1,780	$3,780 

	Category III	6.0	46.0	6.0	58.0	$0 	$2,550 	$2,690	$5,240 

	Category IV	6.0	77.0	8.0	91.0	$0 	$3,110 	$4,230	$7,340 

Modification of Plan

Storage	Categories I&II	0.0	4.5	1.0	5.5	$0 	$750 	$241	$991 

	Category III	0.0	4.5	1.0	5.5	$0 	$1,030 	$241	$1,270 

	Category IV	0.0	4.5	1.0	5.5	$0 	$1,310 	$241	$1,550 

Production	Categories I&II	0.0	4.5	1.0	5.5	$0 	$750 	$241	$991 

	Category III	0.0	4.5	1.0	5.5	$0 	$1,030 	$241	$1,270 

	Category IV	0.0	4.5	1.0	5.5	$0 	$1,310 	$241	$1,550 

Five-year Review - No Plan Amendment 

Storage	Categories I&II	1.0	2.5	0.5	4.0	$0 	$0 	$188	$188 

	Category III	1.0	4.5	1.0	6.5	$0 	$0 	$297	$297 

	Category IV	1.0	8.0	1.0	10.0	$0 	$0 	$464	$464 

Production	Categories I&II	1.0	3.5	0.5	5.0	$0 	$0 	$236	$236 

	Category III	1.0	5.5	1.0	7.5	$0 	$0 	$345	$345 

	Category IV	1.0	9.0	1.0	11.0	$0 	$0 	$512	$512 

Type of Facility1	Burden Hours	Burden Cost (2005$)

	Managerial

($55.7/hr)	Technical

($47.9/hr) 	Clerical 

($25.3/hr)	Total Labor Hours	Paperwork

O&M and Capital Costs	PE Cost

(O&M)2	 Total Labor Cost	Total Cost

Five-year Review-Amendment

Storage	Category I&II	1.0	7.0	2.0	10.0	$0 	$750 	$442	$1,190 

	Category III	1.0	9.0	2.0	12.0	$0 	$1,030 	$538	$1,570 

	Category IV	1.0	12.5	2.0	15.5	$0 	$1,310 	$705	$2,010 

Production	Category I&II	1.0	8.0	2.0	11.0	$0 	$750 	$490	$1,240 

	Category III	1.0	10.0	2.0	13.0	$0 	$1,030 	$585	$1,610 

	Category IV	1.0	13.5	2.0	16.5	$0 	$1,310 	$753	$2,060 

Oil Discharge

Storage	Category I&II	1.0	1.0	0.0	2.0	$14 	$0 	$104	$114 

	Category III	1.0	1.0	0.0	2.0	$16 	$0 	$104	$117 

	Category IV	1.0	1.0	0.0	2.0	$21 	$0 	$104	$121 

Production	Category I&II	1.0	1.0	0.0	2.0	$14 	$0 	$104	$114 

	Category III	1.0	1.0	0.0	2.0	$16 	$0 	$104	$117 

	Category IV	1.0	1.0	0.0	2.0	$21 	$0 	$104	$121 

Recordkeeping

Storage	Category I&II	0.0	2.0	0.5	2.5	$200 	$0 	$108	$108 

	Category III	0.0	3.3	0.5	3.8	$200	$0 	$171	$171 

	Category IV	0.0	7.9	0.5	8.4	$200	$0 	$391	$391 

Production	Category I&II	0.0	1.5	0.5	2.0	$200	$0 	$85	$85 

	Category III	0.0	1.3	0.5	1.8	$200	$0 	$75	$75 

	Category IV	0.0	1.3	0.5	1.8	$200	$0 	$75	$75 

1 See Chapter   REF _Ref140640004 \r  4  for the definitions of the
facility types. 

2 PE costs represent the cost of hiring an outside engineer. Capital
and Operation and Maintenance (O&M) Activities Costs

	Capital and O&M costs include the cost of installing and maintaining
secondary containment structures; conducting integrity testing of
containers, valves, and piping; conducting spill prevention briefings;
providing a drainage system for tank loading/unloading areas; and other
activities.  Below are descriptions of these activities followed by a
discussion of their estimated unit costs.

Capital and O&M Activities

Integrity Testing

	Sections 112.8(c)(6) and 112.12(c)(6) require the integrity testing of
bulk storage containers on a regular schedule and whenever material
repairs are done.  Section 112.7(d) requires that if the installation of
secondary containment is not practicable, the owner or operator must,
among other measures, conduct periodic integrity tests for bulk storage
containers and periodic integrity and leak testing of associated valves
and piping.

Secondary Containment

	Various sections of the rule require secondary containment to prevent
discharges of oil to navigable waters and adjoining shorelines.  For
example, §§112.8(c)(2) and 112.12(c)(2) require secondary containment
for the entire capacity of the largest single bulk storage container and
sufficient freeboard to contain precipitation.  Section 112.7(h)
requires containment of at least the maximum capacity of any single
compartment of a tank car or tank truck loaded or unloaded at the
facility at a loading or unloading rack.  Section 112.7(c) requires
appropriate containment and/or diversionary structures or equipment to
prevent a discharge as described in §112.1(b).  Other secondary
containment provisions apply to other circumstances such as those for
mobile or portable containers (§§112.8(c)(11) and 112.12(c)(11)) or
bulk storage containers at production facilities (§112.9(c)(2)).

Other Capital and Operational Activities

	EPA estimated costs associated with several other relevant SPCC
compliance activities.  These costs consist of one-time initial costs to
purchase and install equipment as well as costs of ongoing maintenance,
upkeep, and training.  Compliance activities include:

Discharge prevention briefing.  Section 112.7(f)(3) requires owners and
operators to schedule and conduct discharge prevention briefings for
facility personnel to ensure adequate understanding of the SPCC Plan.			

Drainage system for tank truck loading/unloading areas.  Section
112.7(h)(1) requires a quick drainage system for tank truck
loading/unloading areas where rack area drainage does not flow into a
catchment basin or treatment facility designed to handle discharges.

Valves for drainage from diked areas.  Sections 112.8(b)(2) and
112.12(b)(2) require appropriate drainage from diked areas using valves
of manual, open-and-closed design.

Drainage systems from undiked areas.  Sections 112.8(b)(3) and
112.12(b)(3) require drainage systems from undiked areas with a
potential for a discharge to flow into ponds, lagoons, or catchment
basins designed to retain oil or return it to the facility.

Requirements for pump transfer.  Sections 112.8(b)(5) and 112.12(b)(5)
require that where drainage waters are treated in more than one
treatment unit and such treatment is continuous and pump transfer is
needed, then two “lift” pumps are provided and at least one of the
pumps is permanently installed.

Capital and O&M Cost Estimates

	One of the final rule amendments is to provide an optional alternative
to the general secondary containment requirements for oil-filled
operational equipment that meets qualifying criteria.  For this
analysis, EPA developed new cost estimates for performing integrity
testing and for providing secondary containment at facilities with
qualified oil-filled operational equipment.  For other capital and O&M
activities, the Agency used the cost estimates developed as part of the
economic analysis in support of the 2002 SPCC rule, converted to 2005
dollars.  

Integrity Testing

	EPA estimated the annualized cost of conducting integrity testing at
approximately $120 for owners and operators of Category I facilities,
$350 for owners and operators of Category II facilities, $2,640 for
owners and operators of Category III facilities, and $15,700 for owners
and operators of Category IV facilities.  The unit cost of integrity
testing was estimated based on interviews with several tank inspectors
and engineering firms.  The unit cost was estimated at $700, $1,000,
$3,000, and $10,000 per tank for owners and operators of Category I,
Category II, Category III, and Category IV facilities, respectively. 
The cost of performing integrity testing could vary significantly
depending on the container type, capacity, type of oil, and other
site-specific factors.

	For this analysis, according to industry standards (e.g., API-653 and
STI SP-001), EPA assumed that tanks would be subject to inspection and
integrity testing once every 10 years.  In practice, however, the
interval between successive inspections depends on the tank and service
conditions (in particular, tank configuration, the shell thickness and
expected corrosion rate) and can exceed 10 years.  The maximum interval
between inspections under the API-653 standard is 20 years.  Therefore,
in some cases, owners or operators of facilities may perform integrity
testing less often than every 10 years.  The 2002 SPCC rule allows the
use of environmentally equivalent measures in lieu of inspection and
integrity testing, consistent with good engineering practice.  Such
measures may have lower operational costs.  For example, for shop-built
containers with a shell capacity of 30,000 gallons or under, an
environmentally equivalent measure might be to combine appropriate
visual inspection with elevation of the container such that all sides
are visible and corrosion is minimized.  As a result, EPA's analysis may
overestimate the cost of integrity testing incurred by an owner or
operator of an average facility.  EPA calculated the total cost of
integrity testing per facility by multiplying the cost for a single tank
by the number of tanks per facility. 

Secondary Containment

	EPA estimated the one-time cost of implementing secondary containment
requirements at new facilities with qualified oil-filled operational
equipment at approximately $11,000, $27,500, and $60,000 per facility
respectively for owners and operators of Categories I&II, Category III,
and Category IV facilities.  The unit costs of providing secondary
containment were estimated based on an interview with a specialized
engineering firm that provides secondary containment to electrical
substations and subsequent comments provided by electric utilities.  The
cost of constructing a secondary containment structure is a one-time
capital expenditure that EPA assumed owners and operators would incur in
the first year.  Some burden is associated with maintenance of secondary
containment such as debris removal, etc.  EPA did not include a cost
estimate for this type of maintenance activity, as the Agency assumed
that the cost for these activities is embedded in the overall facility
maintenance costs and is not significant.  The Agency assumed that the
cost of providing secondary containment for facilities of other
industries would be similar to that for electrical substations. 

Other Capital and O&M Activities

	As part of the economic analysis in support of the 2002 SPCC rule, EPA
estimated compliance costs associated with other capital and O&M
activities.  The estimates in   REF _Ref140571258 \h  Exhibit 5-3 
present costs developed for the 2002 rule converted to 2005 dollars. 
The largest component of other capital and operational costs for owners
and operators of new facilities is the costs related to the installation
of a drainage system for tank truck loading/unloading areas.  The
first-year cost to install this system is estimated at $33,800 to
$67,600 for owners and operators of Category III and IV facilities,
respectively.   The only compliance activity presented in   REF
_Ref140571258 \h  Exhibit 5-3  that is directly impacted by the 2006
SPCC final rule is the cost of providing secondary containment for
qualified oil-filled operational equipment.  Other unit cost estimates
are illustrated in   REF _Ref140571258 \h  Exhibit 5-3  for reference
only.  

	  REF _Ref140571258  Exhibit 5-3  below summarizes the estimated
capital and O&M costs that owners and operators of facilities are
assumed to incur to comply with SPCC regulations.  The requirements vary
between storage and production facilities.

Exhibit   STYLEREF 1 \s  5 -  SEQ Exhibit \* ARABIC \s 1  3 

Estimated Capital and O&M Costs by Facility Type

Cost Item	Categories I and II 	Category III	Category IV 

New Facilities 

O&M Costs

Integrity Testing	$170	$2,640	$15,700

Spill Prevention Briefing	$163	$404	$656

Capital Costs

Secondary Containment (Facilities with Oil-Filled Operational Equipment)
$11,000-$60,000

Drainage System for Tank Truck Loading/Unloading Areas	$0	$33,800
$67,600

Valves for Drainage from Diked Areas	$730	$2,300	$14,400

Drainage Systems from Undiked Areas	$2,700	$5,400	$93,100

Requirements for Pump Transfer (Storage Facilities)	$0	$3,440	$13,800

Total1 (Production Facilities)	$14,800-$63,800	$56,300-$105,000
$203,000-$252,000

Total1 (Storage Facilities)	$14,800-$63,800	$59,700-$109,000
$216,000-$265,000

Existing Facilities

O&M Costs

Integrity Testing	$170	$2,640	$15,700

Spill Prevention Briefing	$154	$380	$618

Capital Costs

Drainage System for Tank Truck Loading/Unloading Areas	$0	$69	$137

Valves for Drainage from Diked Areas	$56	$165	$931

Drainage Systems from Undiked Areas	$0	$0	$0

Requirements for Pump Transfer (Storage Facilities)	$0	$69	$274

Total1 (Production Facilities)	$389	$3,280	$17,400

Total1 (Storage Facilities)	$389	$3,350	$17,700

1 	The numbers do not add up to the total due to rounding.

Alternative Requirements Offered by the Final SPCC Rule

Oil Spill Contingency Plan for Facilities with Qualified OFE

	In its final revisions to the SPCC rule, EPA is providing owners and
operators of facilities with certain types of oil-filled operational
equipment the option of preparing an oil spill contingency plan and a
written commitment of manpower, equipment, and materials in lieu of
providing secondary containment for qualified oil-filled operational
equipment, without making an individual impracticability determination
as required in §112.7(d).  

	EPA developed a unit-cost estimate for preparing an oil spill
contingency plan in 2005 to evaluate the potential impacts of the final
revisions to the SPCC rule.  A facility owner or operator, who chooses
to prepare an oil spill contingency plan instead of providing secondary
containment, would incur labor and capital costs.  This section
describes major activities involved in plan preparation and
implementation, as well as capital expenditures.

	EPA assumed that the activities associated with preparing a contingency
plan are similar to those required by a Facility Response Plan (FRP). 
Therefore, the hour and cost burden estimates associated with preparing
a contingency plan are based on burden estimates developed for an FRP. 
Since an FRP is more complex than an oil spill contingency plan, the FRP
cost estimates were adjusted downward to estimate the burden for the
contingency plan.  EPA assumed that the following elements would be
included in the oil spill contingency plan preparation:

Emergency Response;

Hazard Evaluation;

Discussion of Spill Scenarios;

Discharge Detection; and

Plan Implementation.

	Given the smaller requirements for a contingency plan offered by the
final SPCC rule compared to the FRP requirements, the cost associated
with each of these elements was assumed to be half the FRP cost (except
for discharge detection, which was assumed to be the same).  The cost
estimates were inflated to $2005 using the Bureau of Labor Statistics(
Producer Production Index.  EPA assumed that the managerial, technical,
and clerical percentage of the total labor burden associated with
preparing a contingency plan is the same as that for preparing a new
SPCC Plan.  The typical annual cost of preparing an oil spill
contingency plan is estimated at $818.

	Another labor component associated with the contingency plan option
involves training facility personnel for future amendments to the
contingency plan.  Using best professional judgment, EPA estimated that
it would take approximately five hours of technical personnel’s time
to perform contingency plan training at a typical facility.  

	The capital expenditures associated with contingency plan preparation
and implementation consist of two major items, upgrading hand-held
communication equipment and providing response equipment.  A typical
upgrade of communication equipment would require purchasing six two-way
radios, five for facility personnel and one for a response coordinator. 
Based on comparable market prices, EPA estimated the cost of two-way
radios at $50 each.  Response equipment required as part of the
contingency plan varies across facilities depending on industry profile
and size.  In its estimation of a typical cost of response equipment,
EPA assumed that a facility owner or operator would need to provide
approximately 100 feet of containment boom.  The total cost for response
equipment consists of (1) a 95-gallon Overpack Spill Response Kit,
estimated at $495, (2) oil containment boom, estimated at $621, and (3)
an oil skimmer, estimated at $1,000.     REF _Ref140571323  Exhibit 5-4 
presents the hour and cost burden estimated for a typical oil spill
contingency plan.

Exhibit   STYLEREF 1 \s  5 -  SEQ Exhibit \* ARABIC \s 1  4 

Estimated Cost of Preparing a Typical Contingency Plan

Activity	Burden Hours	O&M Costs	Total Cost

	Management

($55.7/hr)	Technical

($47.9/hr)	Clerical

($25.3/hr)	Total Labor Hours

Prepare a contingency plan	2.5	12	4	18	-	$815

Train personnel for contingency plan amendment	-	5	-	5	-	$240

Upgrade hand-held communication equipment	-	-	-	-	$300	$300

Response equipment (site-specific)	-	-	-	-	$2,120	$2,120

Total1	2.5	17	4	23	$2,420	$3,470

  1 	The numbers do not add up to the total due to rounding.

State Overlap

	Each state has its own regulations regarding the storage, handling, and
containment of oil.  In some cases, the effort required by these state
regulations may be similar to or the same as what is required by the
SPCC rule.  Without taking into account similar requirements imposed by
state regulations, the cost of compliance and cost savings associated
with the regulatory changes could be overestimated.  

	The economic analysis of the 2002 SPCC rule attempted to account for
overlap between the state requirements and that rule.    SEQ CHAPTER \h
\r 1 The analysis revealed that 19 states had prevention planning
requirements pursuant to state law.  In certain cases, state regulations
closely track or incorporate by reference federal SPCC requirements.  In
other cases, the degree of overlap is less complete but is still
substantial.  Based on a comparison of state regulations with a list of
major SPCC planning requirements, EPA divided the 19 states into three
overlap groups (complete, substantial, or partial), depending on the
degree of overlap between the federal and state requirements.  Based on
the findings from the 19 states, EPA developed a nation-wide estimate
for the degree of overlap between federal and state requirements.    REF
_Ref140571355  Exhibit 5-5  presents the estimated percentage reduction
on total burden attributed to overlap in requirements between the SPCC
rule and state regulations.

Exhibit   STYLEREF 1 \s  5 -  SEQ Exhibit \* ARABIC \s 1  5 

Estimated Percentage Reduction in Total Burden Due to State Overlap

Degree of Overlap	Categories I and II	Category III	Category IV	Total

Complete Overlap	4.4%	11.2%	15.1%	5.9%

Substantial Overlap	3.1%	7.8%	10.8%	4.2%

Partial Overlap	2.1%	5.3%	7.6%	2.8%

Total	9.6%	24.2%	33.4%	13.0%

	As part of the regulatory analysis for the 2005 proposed SPCC
amendments, EPA studied the overlap of state regulations to determine
whether to adjust the estimate to account more accurately for recent
changes in state requirements and/or refine the previously generated
estimates.  As a result of this review, the Agency concluded that there
was non-compelling evidence to adjust the overlap estimate between the
SPCC final rule and state regulations.  When assessing cost savings
resulted from the reduced SPCC requirements, EPA takes into account the
estimated degree of overlap to avoid double counting.  However, the
overlap estimates are applicable only to the regulatory relief options
that involve the total cost of compliance, such as reduced requirements
for motive power.  The reduced burden due to state overlap was estimated
by applying the percentages presented in   REF _Ref140571355  Exhibit
5-5  to the total burden associated with each paperwork compliance
activity.  

Annualizing Estimated Changes in Compliance Costs

	Changes in compliance costs presented in subsequent chapters (Chapter  
REF _Ref140640019 \r  6  through Chapter   REF _Ref140640034 \r  9 ) are
estimated in annualized net present values over a ten-year period. 
First, EPA calculated the net present value of a projected stream of
future cost savings using the 3 and 7 percent discount rates.  EPA
defined the ten-year period of analysis as 2008 through 2017.  The net
present value of a projected stream of cost savings is calculated by
multiplying the estimated savings in each year by a time-dependent
weight, dt, and adding all of the weighted values as follows:

After the present value of costs is calculated using the NPV formula
above, this present value is then annualized according to the following
formula:

 

Note that the annualized cost is the amount one would have to pay at the
end of each period to add up to the same cost in present value terms as
the stream of costs being annualized.

  SEQ CHAPTER \h \r 1 Qualified Facilities 

EPA is amending the Oil Pollution Prevention regulation (40 CFR part
112) to provide an option to the owner or operator of a facility that
meets specific qualifying criteria (hereafter referred to as a
“qualified facility”) to self-certify his/her SPCC Plan in lieu of
certification by a PE.  The eligibility criteria are included in a new
section of the rule at §112.3(g).  According to §112.3(g), the
self-certification option is available to the owners and operators of
those facilities that (1) have had no single discharge as described in
§112.1(b) greater than 1,000 gallons or no two discharges as described
in §112.1(b) each greater than 42 gallons within any 12-month period
during the three years prior to the SPCC Plan self-certification date,
or since becoming subject to 40 CFR part 112 if the facility has been in
operation for less than three years; and (2) have 10,000 gallons or less
in aggregate aboveground oil storage capacity.

EPA is amending §112.6 of the rule to outline the requirements that
apply to qualified facilities with 10,000 gallons or less in aggregate
oil storage capacity.

The rest of this chapter is organized as follows:

Section   REF _Ref140641465 \r  6.1  summarizes the changes in
regulatory requirements applicable to qualified facilities.

Section   REF _Ref140641473 \r  6.2  describes the projected universe of
affected facilities.

Section   REF _Ref140641482 \r  6.3  provides an estimate of cost
savings resulting from the rule changes.

Changes in Regulatory Requirements

In §112.6(b), EPA describes the requirements applicable to qualified
facilities (those that have 10,000 gallons or less in storage capacity).
 Owners or operators of qualified facilities have the option of
self-certifying the SPCC Plan for their facility.  Self-certified Plans
for these facilities may include “environmentally equivalent”
deviations to required Plan elements, as provided in §112.7(a)(2), or
impracticability determinations with respect to any secondary
containment requirements as provided in §112.7(d).  However, such
deviations or determinations must be reviewed and certified in writing
by a PE.  EPA outlines the requirements for PE certification of parts of
a self-certified plan in §112.6(b)(4).

The option to self-certify a facility-specific SPCC Plan according to
the requirements in §112.6(b) is available to any qualified facility
having 10,000 gallons or less in storage capacity.  EPA assumed that
owners and operators of all new qualified facilities with storage
capacity of less than 10,001 gallons would self-certify the Plan instead
of having it certified by a PE.  The Agency also assumed that under the
new requirements, owners and operators of all existing qualified
facilities would not use a PE to certify a technical amendment to their
Plan.

Universe of Affected Facilities

EPA estimated that approximately 327,000 facilities with oil storage
capacities of 10,000 gallons or less would be subject to SPCC in the
first year of the amended rule.  Over the next 10 years, approximately
345,000 facilities with storage capacities of 10,000 gallons or less
will be subject to SPCC each year on average.

  REF _Ref140571458  Exhibit 6-1  and   REF _Ref140571505  Exhibit 6-2 
present the projected number of existing and new qualified facilities
from 2008 through 2017, respectively.  The projected average annual
numbers of existing and new qualified facilities are 337,000 and 7,260,
respectively.  The presented values in exhibits of this and subsequent
chapters were not rounded to preserve the precision of the estimates
that do not show a substantial change from year to year.

Exhibit   STYLEREF 1 \s  6 -  SEQ Exhibit \* ARABIC \s 1  1 

Projected Total Number of Existing Qualified Facilities by Year and
Industry Sector1

Industry	Number of Existing Facilities	Ten-Year Average

	2008 

Year 1	2009 

Year 2	2010 

Year 3	2011 

Year 4	2012 

Year 5	2013 

Year 6	2014 

Year 7	2015 Year 8	2016 

Year 9	2017

Year 10

	Oil Production	      23,500 	      24,700 	    26,400 	    27,500 	   
28,300 	    29,500 	    30,700 	    31,900 	    33,100 	    34,600 	   
29,000 

Farms	    141,000 	    141,000 	  140,000 	  140,000 	  139,000 	 
138,000 	  138,000 	  137,000 	  136,000 	  136,000 	  139,000 

Electric Utility Plants	      20,600 	      21,300 	    22,000 	   
22,700 	    23,400 	    24,100 	    24,900 	    25,700 	    26,500 	   
27,400 	    23,900 

Petroleum Refining and Related Industries	            85 	            85
	          86 	          86 	          87 	          87 	          88 	 
        88 	          89 	          89 	          87 

Chemical Manufacturing	       1,050 	       1,050 	     1,050 	    
1,050 	     1,060 	     1,060 	     1,060 	     1,070 	     1,070 	    
1,070 	     1,060 

Food Manufacturing	       1,670 	       1,680 	     1,690 	     1,700 	 
   1,710 	     1,720 	     1,740 	     1,750 	     1,760 	     1,770 	  
  1,720 

Manufacturing Facilities Using and Storing AFVO	       2,580 	      
2,590 	     2,600 	     2,620 	     2,630 	     2,640 	     2,650 	    
2,660 	     2,670 	     2,680 	     2,630 

Metal Manufacturing	       1,630 	       1,640 	     1,650 	     1,650 	
    1,660 	     1,670 	     1,680 	     1,680 	     1,690 	     1,700 	 
   1,660 

Other Manufacturing	       8,760 	       8,750 	     8,730 	     8,720 	
    8,700 	     8,690 	     8,670 	     8,660 	     8,640 	     8,620 	 
   8,690 

Real Estate Rental and Leasing	      24,100 	      24,600 	    25,100 	 
  25,700 	    26,200 	    26,700 	    27,300 	    27,800 	    28,400 	  
 29,000 	    26,500 

Retail Trade	      14,100 	      14,100 	    14,100 	    14,200 	   
14,200 	    14,200 	    14,300 	    14,300 	    14,400 	    14,400 	   
14,200 

Contract Construction	      11,100 	      11,300 	    11,500 	    11,700
	    11,900 	    12,200 	    12,400 	    12,600 	    12,900 	    13,100 
    12,100 

Wholesale Trade	       9,410 	       9,420 	     9,430 	     9,440 	    
9,450 	     9,460 	     9,470 	     9,480 	     9,490 	     9,500 	    
9,460 

Other Commercial	      11,200 	      11,700 	    12,200 	    12,700 	   
13,300 	    13,900 	    14,500 	    15,100 	    15,800 	    16,500 	   
13,700 

Transportation	       8,080 	       8,280 	     8,480 	     8,690 	    
8,900 	     9,120 	     9,340 	     9,570 	     9,800 	    10,000 	    
9,030 

Arts Entertainment & Recreation	      11,800 	      12,100 	    12,400 	
   12,800 	    13,100 	    13,500 	    13,800 	    14,200 	    14,600 	 
  15,000 	    13,300 

Other Services (Except Public Administration)	       6,280 	       6,340
	     6,390 	     6,450 	     6,500 	     6,560 	     6,620 	     6,670 
     6,730 	     6,790 	     6,530 

Education 	       1,880 	       1,970 	     2,050 	     2,140 	    
2,230 	     2,330 	     2,430 	     2,540 	     2,650 	     2,760 	    
2,300 

Petroleum Bulk Stations and Terminals	          467 	          441 	    
   417 	        393 	        372 	        351 	        331 	        313 
        295 	        279 	        366 

Hospitals & Other Health Care	       5,300 	       5,370 	     5,450 	  
  5,530 	     5,600 	     5,680 	     5,760 	     5,840 	     5,930 	   
 6,010 	     5,650 

Accommodation and Food Services	       4,530 	       4,590 	     4,660 	
    4,720 	     4,790 	     4,860 	     4,920 	     4,990 	     5,060 	 
   5,130 	     4,830 

Fuel Oil Dealers	          303 	          300 	        296 	        293 
        290 	        287 	        284 	        281 	        277 	       
274 	        289 

Gasoline stations 	       1,870 	       1,850 	     1,830 	     1,810 	 
   1,790 	     1,770 	     1,750 	     1,730 	     1,710 	     1,700 	  
  1,780 

Information Finance and Insurance	       3,500 	       3,580 	     3,670
	     3,760 	     3,850 	     3,940 	     4,030 	     4,130 	     4,230 
     4,330 	     3,900 

Mining	       1,270 	       1,270 	     1,270 	     1,270 	     1,270 	 
   1,270 	     1,270 	     1,260 	     1,260 	     1,260 	     1,270 

Religious Organizations	       1,450 	       1,470 	     1,490 	    
1,520 	     1,540 	     1,560 	     1,590 	     1,610 	     1,630 	    
1,660 	     1,550 

Warehousing and Storage	          928 	       1,060 	     1,210 	    
1,390 	     1,580 	     1,810 	     2,070 	     2,360 	     2,700 	    
3,090 	     1,820 

Military Installations	          152 	          155 	        157 	      
 159 	        162 	        164 	        167 	        169 	        172 	 
      174 	        163 

Pipelines	          673 	          665 	        657 	        649 	      
 641 	        633 	        625 	        618 	        610 	        603 	 
      637 

Government	          569 	          577 	        586 	        595 	     
  604 	        613 	        622 	        631 	        641 	        651 	
       609 

Total	    320,000 	    324,000 	  328,000 	  331,000 	  335,000 	 
339,000 	  343,000 	  347,000 	  351,000 	  356,000 	  337,000 

1	The level of precision of the numeric values reflects underlying data.

Exhibit   STYLEREF 1 \s  6 -  SEQ Exhibit \* ARABIC \s 1  2 

Projected Total Number of New Qualified Facilities by Year and Industry
Sector1

Industry	Number of New Facilities	Ten-Year Average

	2008

Year 1	2009

Year 2	2010

Year 3	2011

Year 4	2012

Year 5	2013

Year 6	2014

Year 7	2015

Year 8	2016

Year 9	2017

Year 10

	Oil Production	       1,220 	       1,720 	     1,080 	        804 	   
 1,160 	     1,200 	     1,250 	     1,140 	     1,560 	     1,020 	    
1,220 

Farms	       1,270 	       1,260 	     1,260 	     1,250 	     1,250 	  
  1,240 	     1,240 	     1,230 	     1,230 	     1,220 	     1,240 

Electric Utility Plants	          679 	          701 	        723 	     
  746 	        770 	        795 	        820 	        846 	        873 	
       901 	        786 

Petroleum Refining and Related Industries	              2 	             
2 	            2 	            2 	            2 	            2 	         
  2 	            2 	            2 	            2 	            2 

Chemical Manufacturing	            26 	            26 	          26 	   
      26 	          26 	          26 	          27 	          27 	      
   27 	          27 	          26 

Food Manufacturing	            40 	            40 	          41 	       
  41 	          41 	          41 	          42 	          42 	         
42 	          42 	          41 

Manufacturing Facilities Using and Storing AFVO	            62 	        
   62 	          62 	          62 	          63 	          63 	         
63 	          63 	          64 	          64 	          63 

Metal Manufacturing	            24 	            25 	          25 	      
   25 	          25 	          25 	          25 	          25 	         
25 	          25 	          25 

Other Manufacturing	          208 	          208 	        207 	       
207 	        206 	        206 	        206 	        205 	        205 	  
     205 	        206 

Real Estate Rental and Leasing	          532 	          543 	        554
	        565 	        577 	        589 	        601 	        613 	      
 626 	        639 	        584 

Retail Trade	          333 	          334 	        335 	        336 	   
    337 	        337 	        338 	        339 	        340 	        341
	        337 

Contract Construction	          322 	          328 	        334 	       
341 	        347 	        354 	        360 	        367 	        374 	  
     381 	        351 

Wholesale Trade	          195 	          196 	        196 	        196 	
       196 	        196 	        197 	        197 	        197 	       
197 	        196 

Other Commercial	          517 	          540 	        564 	        589 
        615 	        642 	        671 	        700 	        731 	       
764 	        633 

Transportation	          256 	          263 	        269 	        276 	 
      282 	        289 	        296 	        303 	        311 	       
318 	        286 

Arts Entertainment & Recreation	          325 	          334 	       
343 	        352 	        362 	        372 	        382 	        392 	  
     402 	        413 	        368 

Other Services (Except Public Administration)	          121 	         
122 	        123 	        124 	        125 	        126 	        127 	  
     128 	        129 	        130 	        125 

Education 	            86 	            89 	          93 	          97 	 
      101 	        106 	        110 	        115 	        120 	       
125 	        104 

Petroleum Bulk Stations and Terminals	              8 	              7 	
           7 	            6 	            6 	            6 	            5
	            5 	            5 	            5 	            6 

Hospitals & Other Health Care	            76 	            77 	         
78 	          79 	          81 	          82 	          83 	          84
	          85 	          86 	          81 

Accommodation and Food Services	            77 	            78 	        
 79 	          80 	          82 	          83 	          84 	         
85 	          86 	          87 	          82 

Fuel Oil Dealers	              5 	              5 	            5 	      
     5 	            5 	            5 	            5 	            5 	    
       5 	            5 	            5 

Gasoline stations 	            20 	            19 	          19 	       
  19 	          19 	          19 	          18 	          18 	         
18 	          18 	          19 

Information Finance and Insurance	            97 	            99 	      
 101 	        104 	        106 	        109 	        111 	        114 	 
      117 	        119 	        108 

Mining	            19 	            19 	          19 	          19 	     
    19 	          19 	          19 	          19 	          19 	        
 19 	          19 

Religious Organizations	            22 	            23 	          23 	  
       23 	          24 	          24 	          24 	          25 	     
    25 	          25 	          24 

Warehousing and Storage	          155 	          177 	        202 	     
  231 	        264 	        302 	        345 	        394 	        451 	
       515 	        303 

Military Installations	              2 	              2 	            2 	
           2 	            2 	            3 	            3 	            3
	            3 	            3 	            3 

Pipelines	              6 	              6 	            6 	            6
	            6 	            5 	            5 	            5 	           
5 	            5 	            6 

Government	              9 	              9 	            9 	           
9 	            9 	            9 	          10 	          10 	         
10 	          10 	            9 

Total	       6,720 	       7,310 	     6,780 	     6,630 	     7,100 	  
  7,280 	     7,460 	     7,510 	     8,080 	     7,710 	     7,260 

1	The level of precision of the numeric values reflects underlying data.

The facility estimates presented in   REF _Ref140571458  Exhibit 6-1 
and   REF _Ref140571505  Exhibit 6-2  above represent the projected
number of facilities that could potentially be “qualified
facilities” based on their storage capacity alone.  Eligibility for
the alternative rule requirements, however, also considers the
facility’s discharge history.  In the amended rule, a qualified
facility cannot have had a single discharge (as defined in §112.1(b))
greater than 1,000 gallons or two discharges each greater than 42
gallons during any 12-month period in the past three years.

To evaluate the extent to which qualified facilities might not be
eligible for relief, EPA examined National Response Center (NRC) spill
data to identify oil discharges involving storage tanks of at least 55
gallons, and where the volume spilled was at least 42 gallons but not
more than 10,000 gallons.  Since NRC does not record the total oil
storage capacity of the facility involved in a reported discharge, EPA
developed estimates based on the assumptions that 25 percent, 50
percent, and 75 percent of discharges greater than or equal to 42
gallons, and less than or equal to 10,000 gallons, were from qualified
facilities.    REF _Ref140571754  Exhibit 6-3  presents the estimated
number of potential qualified facilities that reported discharges over
the last three years, based on the NRC data.

Exhibit   STYLEREF 1 \s  6 -  SEQ Exhibit \* ARABIC \s 1  3 

Estimated Number of Facilities with Oil Discharges within the Last Three
Years

Percentage of Qualified Facilities	Number of Facilities with Oil
Discharges	Percent of Facilities with Oil Discharges1

Total in NRC Database	593	0.47%

25% Scenario	148	0.12%

50% Scenario	297	0.23%

75% Scenario	445	0.35%

1 	Calculated percentages are based on the number of existing facilities
only, since new facilities do not yet have a three-year discharge
history.

Because the NRC database does not provide information on the aggregate
aboveground storage capacity of facilities, and the number of facilities
with oil discharges of 10,000 gallons or less represents a small
percentage of potential qualified facilities, EPA ultimately decided not
to adjust the estimated number of existing and new facilities with
10,000 gallons or less of oil that could potentially qualify for this
relief based on the NRC spill data.    REF _Ref140571783  Exhibit 6-4 
presents the projected 10-year average numbers of existing and new
qualified facilities used in the remainder of this analysis.

Exhibit   STYLEREF 1 \s  6 -  SEQ Exhibit \* ARABIC \s 1  4 

Projected Number of Existing and New Qualified Facilities

(10-Year Average)

Qualified Facilities	Total

Existing	337,000

New	7,260

Total	345,000

As with all of the options considered in developing amendments to the
rule, facility owners or operators would have the choice of complying
with the existing SPCC rule (as amended in 2002) or taking advantage of
the offered requirements for qualified facilities outlined in §112.6. 
EPA does not know how many facility owners or operators will choose to
avail themselves of the “qualified facility” options.  EPA assumed
that owners or operators would likely choose the alternative
requirements if their facility met the qualifying criteria because it
would be less costly than following the requirements that apply to all
other facilities.  In this analysis, EPA assumed that owners and
operators of all facilities that meet the qualified facilities criteria
would take advantage of the relief provided in these amendments.

Compliance Cost Savings

To assess the impact of §112.6, EPA estimated the difference in
compliance costs for owners and operators of qualified facilities
between the 2002 SPCC rule and the final rule amendments.

Based on the different compliance requirement options available to
owners and operators of qualified facilities, EPA estimated that annual
cost savings for owners and operators of existing and new qualified
facilities would be $72.30 and $1,880, respectively.    REF
_Ref140634087  Exhibit 6-5  itemizes the individual cost components
owners and operators of qualified facilities could be required to
fulfill based on the current SPCC requirements and the compliance cost
savings associated with the lessened requirements of the final rule. 
These costs are averaged over all qualified facilities, accounting for
the probability that owners and operators of individual facilities will
incur the cost in a particular year.  As a result, low probability costs
(e.g., complying with §112.4(c)) distributed across owners and
operators of many facilities yield only nominal per-facility costs.

Exhibit   STYLEREF 1 \s  6 -  SEQ Exhibit \* ARABIC \s 1  5 

Annual Compliance Costs and Potential Compliance Cost Savings per
Qualified Facility

Compliance Requirements	Annual Cost1	Annual Cost Savings  of SPCC Rule
without PE Certification Requirements

	2002 SPCC Rule	SPCC Rule without PE Certification Requirements

	Existing Qualified Facilities

Five -Year Review - 112.5(b)	$46.4	$41.9	$4.50

Oil Discharge – 112.4(c)	$0.17	$0.17	- 

Modification of Plan - 112.4(a) and 112.5(a)	$89.6	$21.8	$67.8 

Recordkeeping	$89.8	$89.8	- 

Total paperwork-related	$226	$154.0	$72.3 

Integrity Testing	$119	$119	- 

Other Capital	$206	$206	- 

Total Capital	$325	$325	- 

Total	$552	$479	$72.3

New Qualified Facilities

New Plan - 112.3(a)	$3,320	1,520 	$1,810

Oil Discharge - 112.4(c)	$0.17	$0.17	- 

Modification of Plan - 112.5(a)	$89.6	$21.8	$67.8

Recordkeeping	$130	$130	- 

Total paperwork-related	$3,540	$1,670	$1,880

Integrity Testing	$119	$119	 -

Other Capital	$3,590	$3,590	 -

Secondary Containment	$4,000	$4,000	 -

Total Capital	$7,710	$7,710	-

Total	$11,300	$9,380	$1,880

1    These cost estimates only reflect major compliance activities and
do not account for all costs associated with the SPCC requirements.

EPA calculated the total compliance cost savings for owners and
operators of qualified facilities using the projected number of existing
and new qualified facilities and their corresponding per-facility
compliance cost savings estimates.  The estimation process is summarized
in the following equation:

Using the equation above, EPA estimated that the final SPCC rule would
reduce compliance costs by $37.9 million and $37.7 million per year,
discounted at 3 percent and 7 percent, respectively.    REF
_Ref140572429  Exhibit 6-6  presents the annual, total, and annualized
cost savings for qualified facilities each year.

Exhibit   STYLEREF 1 \s  6 -  SEQ Exhibit \* ARABIC \s 1  6 

Total Projected Compliance Cost Savings for Qualified Facilities

	Projected Annual Compliance Cost Savings	Ten-Year Average	Annualized

	2008 Year 1	2009 Year 2	2010 Year 3	2011 Year 4	2012 Year 5	2013 Year 6
2014 Year 7	2015 Year 8	2016 Year 9	2017

Year 10

Total - not discounted	35.8	37.1	36.4	36.4	37.5	38.2	38.8	39.2	40.6	40.2
380.2	38.0

Total - 3% discounted	34.7	35.0	33.3	32.3	32.4	32.0	31.5	30.9	31.1	29.9
323.3	37.9

Total - 7% discounted	33.4	32.4	29.7	27.8	26.8	25.4	24.2	22.8	22.1	20.4
265.0	37.7

Alternative Considered

In November 2005, EPA proposed to amend the SPCC rule to provide an
option to allow the owner or operator of a facility that meets the
qualifying criteria to self-certify his/her SPCC Plan in lieu of
certification by a PE.  Under the proposed amendment, a qualified
facility would have been a facility subject to the SPCC rule that (1)
had an aggregate facility oil storage capacity of 10,000 gallons or
less; and (2) had no discharges as described in §112.1(b) during the 10
years prior to self-certification or since becoming subject to SPCC
requirements if it had been in existence less than 10 years.  Facilities
subject to SPCC for less than 10 years, including new facilities, would
have needed to demonstrate no discharges as described in §112.1(b) only
for the period of time they had been subject to the SPCC regulation. 
Self-certified Plans would not have been able to include
“environmentally equivalent” deviations to required Plan elements as
provided in §112.7(a)(2), or impracticability determinations with
respect to any secondary containment requirements as provided in
§112.7(d).  However, flexibility would have been provided for the
security (§112.7(g)) and integrity testing (§§112.8(c)(6) and
112.12(c)(6)) provisions of the rule.

The projected reduction in compliance costs associated with this
proposed amendment for owners and operators of qualified facilities was
based on an average of an estimated 324,000 qualified facilities being
eligible for the self-certification option and reduced integrity testing
requirements.  EPA estimated that compliance costs for owners and
operators of qualified facilities would have decreased by $36.3 million
and $36.2 million based on the relief offered to the owners and
operators by not requiring PE certification of their Plans and providing
lessened requirements for integrity testing, discounted at 3 percent and
7 percent, respectively.

Facilities with Qualified Oil-Filled Operational Equipment

EPA is amending the Oil Pollution Prevention regulation (40 CFR part
112) to provide a definition of oil-filled operational equipment (OFE)
and an optional alternative to the general secondary containment
requirements for oil-filled operational equipment that meets qualifying
criteria (hereafter referred to as "qualified oil-filled operational
equipment").  Section 112.7(k) of the final rule allows owners and
operators of facilities with qualified oil-filled operational equipment
to prepare 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 §112.7(d). 
Owners or operators who pursue this alternative are required to
establish and document an inspection or monitoring program to detect
equipment failure and/or a discharge from this qualified oil-filled
operational equipment, in lieu of providing secondary containment.

EPA is adding §112.7(k)(1) to define the eligibility criterion that
oil-filled operational equipment must meet in order to be considered
qualified.  This criterion specifically prohibits an owner or operator
from pursuing the option if the facility has had a single discharge as
described in §112.1(b) from any oil-filled operational equipment
exceeding 1,000 U.S. gallons or two discharges as described in
§112.1(b) from any oil-filled operational equipment each exceeding 42
U.S. gallons within any twelve month period in the three 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 three
years.

Universe of Affected Facilities

The final changes for qualified oil-filled operational equipment address
such items as hydraulic systems, lubricating systems (e.g., those for
pumps, compressors, pumpjacks, and other rotating equipment including
pumpjack lubrication systems), gear boxes, machining coolant systems,
heat transfer systems, transformers, circuit breakers, electrical
switches, and other systems that contain oil to enable operation of the
devices.

EPA does not have data on the number of facilities with oil-filled
operational equipment.  To estimate the number of facilities affected by
§112.7(k), EPA compiled a list of sectors using oil-filled operational
equipment based on a review of the type of equipment covered by the
definition and professional judgment regarding sectors that commonly use
this equipment.  EPA estimated the number of facilities in the electric
utility sector, all of which are assumed to have oil-filled operational
equipment, using data on the number of power plants provided by the EIA
and the number of substations listed by each major utility reporting to
the Federal Energy Regulatory Commission (FERC).

EPA assumed that existing SPCC-regulated facilities with qualified
oil-filled operational equipment would already have secondary
containment installed or a determination of the impracticability of
secondary containment in accordance with §112.7(d).  In such cases,
owners and operators of facilities would not benefit from the reduced
requirements.

EPA estimated that the total number of new facilities with oil-filled
operational equipment would be approximately 7,410 in the first year. 
Over the next 10 years, an average of approximately 7,960 new facilities
with OFE is projected to become regulated each year.    REF
_Ref140572497  Exhibit 7-1  presents the projected number of new
SPCC-regulated facilities each year by industry sector.  To estimate the
number of facilities within these sectors that have OFE, EPA arbitrarily
developed three scenarios whereby 25 percent, 50 percent, and 75 percent
of the facilities in sectors thought to have oil-filled operational
equipment may be affected by the 2006 rule amendments.  EPA estimated
that over the next 10 years, on average approximately 3,570 new
facilities would have oil-filled equipment under the 25-percent
scenario; 5,040 facilities under the 50-percent scenario; and 6,500
facilities under the 75-percent scenario.    REF _Ref140572497  Exhibit
7-1  also presents the projected annual number of new SPCC-regulated
facilities expected under each of these scenarios by industry sector.

Exhibit   STYLEREF 1 \s  7 -  SEQ Exhibit \* ARABIC \s 1  1 

Projected Number of New Facilities with Oil-Filled Operational Equipment
by Industry Sector1

Industry	Annual Number of New Facilities	10–Year Average

	2008

Year 1	2009

Year 2	2010

Year 3	2011

Year 4	2012

Year 5	2013

Year 6	2014

Year 7	2015

Year 8	2016

Year 9	2017

Year 10	All Fac.	25% of Fac.	50% of Fac.	75% of Fac.

Electric Utility Plants2	1,820	1,880	1,940	2,000	2,070	2,130	2,200	2,270
2,350	2,420	2,110	2,110	2,110	2,110

 Oil Production3	1,020	998	976	956	935	915	896	877	858	840	927	232	463
695

Farms4	1,340	1,330	1,330	1,320	1,310	1,310	1,300	1,300	1,290	1,280	1,310
328	655	983

Petroleum Refining and Related Industries	37	37	37	37	38	38	38	38	38	39
38	9	19	28

Chemical Manufacturing	64	64	64	64	64	65	65	65	65	65	65	16	32	48

Food Manufacturing	84	85	85	86	86	87	87	88	89	89	87	22	43	65

Manufacturing Facilities Using and Storing AFVO	180	181	181	182	183	184
185	185	186	187	183	46	92	138

Metal Manufacturing	41	41	41	42	42	42	42	42	42	43	42	10	21	31

Other Manufacturing	368	368	367	366	366	365	364	364	363	362	365	91	183
274

Contract Construction	454	463	472	481	490	499	509	519	529	539	495	124
248	372

Other Commercial	698	729	761	795	830	866	905	945	987	1,030	854	214	427
641

Transportation	443	453	464	476	487	499	511	524	536	549	494	124	247	371

Arts Entertainment & Recreation	363	373	383	394	404	415	426	438	449	461
411	103	205	308

Education 	341	356	371	388	404	422	440	459	479	500	416	104	208	312

Hospitals & Other Health Care	97	98	100	101	103	104	105	107	108	110	103
26	52	78

Mining	47	47	47	47	47	47	47	47	47	47	47	12	24	35

Pipelines	6	6	6	6	6	5	5	5	5	5	6	1	3	4

Government	9	9	9	9	9	9	10	10	10	10	9	2	5	7

Total5	7,410	7,520	7,630	7,750	7,880	8,010	8,140	8,280	8,430	8,580	7,960
3,570 	5,040 	6,500 

1    The level of precision of the numeric values reflects underlying
data.

2 	EPA assumed that all facilities with all oil-filled equipment in the
Electrical Utility Plant sector would be affected by this rule.  The 25,
50 and 75 percent scenarios 	do not apply to this industry.

3 	The number of oil production facilities was obtained from U.S. Energy
Information Administration’s Distribution and Production of Oil and
Gas Wells by State 
(http://www.eia.doe.gov/pub/oil_gas/petrosystem/petrosysog.html).  EPA
assumed that each facility has four oil wells.

4 	Growth rates for farms are based on data from U.S. Department of
Agriculture.	

5 	The numbers do not add up to the total due to rounding.

The main benefit of §112.7(k), described earlier in this section, is
to allow owners or operators of certain facilities to avoid the costs of
secondary containment for OFE without the need for an impracticability
determination.  EPA recognizes that some owners and operators of new
facilities will need to make an impracticability determination for their
facilities due to oil storage other than their OFE storage.  For owners
and operators of these facilities, the cost savings will be lower, since
they will be avoiding only an impracticability determination rather than
secondary containment.  EPA does not know what fraction of facilities
falls into this category, and has decided not to incorporate this
scenario in the analysis.  As a result, EPA's analysis may overestimate
the cost savings to owners and operators of facilities from the final
rule amendments.

Compliance Cost Savings

To assess the impact of §112.7(k), EPA estimated the cost of the
contingency plan and of a written commitment of the manpower, equipment,
and materials that owners or operators of affected facilities would
develop in lieu of providing secondary containment.  A contingency plan
prepared in accordance with 40 CFR 112.7(d) defines procedures and
tactics for responding to discharges of oil into navigable waters or
adjoining shorelines of the United States.  The contingency plan is
implemented whenever a discharge of oil has reached, or threatens,
navigable waters or adjoining shorelines.  EPA included the following
elements in the cost estimate for a contingency plan: emergency
response, hazard evaluation, discharge detection, discussion of spill
scenarios, and plan implementation.  The Agency estimated the total cost
of a contingency plan at $3,470, which includes the costs of
paperwork-related activities, such as Plan preparation, and capital
investments, such as equipment purchase and upgrade.

EPA calculated cost savings based on the assumption that owners and
operators of new facilities with qualified oil-filled operational
equipment would save 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.   EPA estimated annual
per-facility cost savings of $7,530 to $56,500 for new facilities,
depending on a facility size (Category I through IV facilities), as can
be seen in   REF _Ref140572572  Exhibit 7-2 .

Exhibit   STYLEREF 1 \s  7 -  SEQ Exhibit \* ARABIC \s 1  2 

Estimated Annual Affected Compliance Costs and Compliance Cost Savings
by Size Category

Activity	Burden Hours	O&M Costs	Total Cost

	Managerial

($55.7/hr)2	Technical

($47.9/hr)2	Clerical

($25.3/hr)2	Total Burden Hours	Categories I & II	Category III	Category
IV	Categories I & II	Category III	Category IV

Relief from Compliance Costs Associated with Secondary Containment (A)

Secondary containment cost savings	0.0	0.0	0.0	0.0	$11,000	$27,500
$60,000	$11,000	$27,500	$60,000

Added Compliance Costs Associated with Preparing a Contingency Plan (B)

Prepare a contingency plan	2.5	12.0	4.0	18.0	-	-	-	$815

Train personnel for contingency plan amendment	0.0	5.0	0.0	5.0	-	-	-
$240

Upgrade hand-held communication equipment	0.0	0.0	0.0	0.0	$300	$300	$300
$300

Response equipment (site-specific)	0.0	0.0	0.0	0.0	$2,120	$2,120	$2,120
$2,120

Total1	2.5	17.0	4	23.0	$2,420	$2,420	$2,420	3,470	3,470	3,470

Compliance Cost Savings per Facility with Qualified Oil-Filled
Operational Equipment  (equals A – B)1	$7,530	$24,000	$56,500

1 	The numbers do not add up to the total due to rounding.

2 	Wage rates are taken from the U.S. Department of Labor’s Employment
Cost Indexes and Levels, available at:
http://www.bls.gov/news.release/ecec.t11.htm.  Wage rates include wages
and salaries; benefit costs include paid leave, supplemental pay,
insurance, retirement and savings, legally required benefits, severance
pay, and supplemental unemployment benefits.  Overhead costs are
computed separately from BLS data and assumed to be an additional 17% of
the total wage rate, which comprises direct wages and salaries and
employee benefits, as reported by BLS.  The Employment Cost Index (ECI)
was used to adjust labor rates to current dollars (September 2005$).

To estimate the total compliance cost savings, EPA used the following
formula:

EPA calculated total compliance cost estimates based on the three
arbitrarily developed scenarios whereby 25 percent, 50 percent, and 75
percent of the facilities in sectors with oil-filled operational
equipment may be affected by the final rule.  The projected number of
new facilities under these three scenarios by facility size is shown in 
 REF _Ref140572608  Exhibit 7-3 .  EPA applied the cost savings
presented in   REF _Ref140572572  Exhibit 7-2  to the universe of
affected facilities (  REF _Ref140572608  Exhibit 7-3 ) to calculate the
total cost savings for each scenario (  REF _Ref140572663  Exhibit 7-4
).

Exhibit   STYLEREF 1 \s  7 -  SEQ Exhibit \* ARABIC \s 1  3 

Projected Number of New Facilities with Qualified Oil-Filled Operational
Equipment by Size Category

	Annual Number of New Facilities	10-Year Average

	2008

Year 1	2009

Year 2	2010

Year 3	2011

Year 4	2012

Year 5	2013

Year 6	2014

Year 7	2015

Year 8	2016

Year 9	2017

Year 10

	Category I & II Facilities

25% Scenario	2,600	2,650	2,710	2,770	2,830	2,890	2,960	3,020	3,090	3,170
2,870

50% Scenario	3,830	3,900	3,960	4,030	4,110	4,190	4,270	4,350	4,440	4,530
4,160

75% Scenario	5,060	5,140	5,220	5,300	5,390	5,480	5,580	5,680	5,780	5,890
5,450

Category III Facilities

25% Scenario	607	622	639	656	673	691	710	729	749	770	684

50% Scenario	762	779	797	816	835	855	875	896	918	941	848

75% Scenario	918	937	956	976	997	1,020	1,040	1,060	1,090	1,110	1,010

Category IV Facilities

25% Scenario	19	19	20	20	21	21	22	22	23	23	21

50% Scenario	27	28	28	29	29	30	31	31	32	33	30

75% Scenario	36	36	37	37	38	39	39	40	41	42	38

Exhibit   STYLEREF 1 \s  7 -  SEQ Exhibit \* ARABIC \s 1  4 

Projected Annual Compliance Cost Savings

	Total Cost Savings (Million $)

	2008

Year 1	2009

Year 2	2010

Year 3	2011

Year 4	2012

Year 5	2013

Year 6	2014

Year 7	2015

Year 8	2016

Year 9	2017

Year 10	10-year Total	Annualized

Not Discounted

25% Scenario	$35.2	$36.0	$36.9	$37.7	$38.6	$39.6	$40.5	$41.5	$42.6	$43.7
$392	$39.2

50% Scenario	$48.7	$49.6	$50.6	$51.6	$52.7	$53.7	$54.9	$56.0	$57.3	$58.5
$534	$53.4

75% Scenario	$62.2	$63.2	$64.3	$65.5	$66.7	$67.9	$69.2	$70.6	$72.0	$73.4
$675	$67.5

3% discounted 

25% Scenario	$34.2	$33.9	$33.7	$33.5	$33.3	$33.1	$33.0	$32.8	$32.6	$32.5
$333	$39.0

50% Scenario	$47.3	$46.8	$46.3	$45.8	$45.4	$45.0	$44.6	$44.2	$43.9	$43.6
$453	$53.1

75% Scenario	$60.4	$59.6	$58.9	$58.2	$57.5	$56.9	$56.3	$55.7	$55.1	$54.6
$573	$67.2

7% discounted 

25% Scenario	$32.9	$31.5	$30.1	$28.8	$27.5	$26.4	$25.2	$24.2	$23.2	$22.2
$272	$38.7

50% Scenario	$45.5	$43.3	$41.3	$39.4	$37.5	$35.8	$34.2	$32.6	$31.2	$29.8
$371	$52.8

75% Scenario	$58.1	$55.2	$52.5	$50.0	$47.5	$45.3	$43.1	$41.1	$39.1	$37.3
$470	$66.8

Under the 25-percent scenario, EPA estimated that the amendments to
§112.7(k) could reduce compliance costs by as much as $39.0 million and
$38.7 million per year, discounted at 3 percent and 7 percent,
respectively.  Under the scenario where owners and operators of 50
percent of the facilities in industries identified as having oil-filled
equipment will take advantage of the exemption, compliance costs would
decrease by $53.1 million and $52.8 million per year, discounted at 3
percent and 7 percent, respectively.  Under the 75-percent scenario,
annual compliance costs would decrease by $67.2 million and $66.8
million, discounted at 3 percent and 7 percent, respectively.

Alternatives Considered

In the proposed SPCC rule, EPA considered allowing owners and operators
of facilities with qualified oil-filled operational equipment to prepare
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 §112.7(d).  The proposed
rule contained an eligibility criterion that restricted exemptions to
owners and operators of facilities that had no reportable discharges
from oil-filled operational equipment within 10 years prior to the SPCC
plan certification date.  For the 2006 final rule, EPA narrowed this
restriction to owners and operators of facilities that have not had a
1,000-gallon discharge or two 42-gallon discharges (as described in
§112.4(a)) within 12 months in the last three years.

The projected reduction in compliance costs associated with this
proposed exemption for qualified oil-filled operational equipment was
based on the estimated cost savings for a projected 2,450 new electric
utility facilities expected to become regulated each year.  The cost
savings that EPA estimated in the proposed SPCC rule were as high as
$60.9 million and $60.1 million, discounted at 3 percent and 7 percent,
respectively.  The projected cost savings under the proposed rule were
estimated only for owners and operators of facilities in the electric
utility sector.  When estimating compliance cost savings for the 2006
final rule, EPA included facilities using oil-filled operational
equipment from other industry sectors.

By extending the proposed exemption for oil-filled operational equipment
to all potentially affected industries, EPA estimated changes in
compliance cost savings under the 25 percent, 50 percent, and 75 percent
scenarios.  Under the 25-percent scenario, cost savings are expected to
decrease by $21.9 million to $21.4 million discounted at 3 percent and 7
percent, respectively.  Under the 50-percent scenario, cost savings are
expected to decrease by $7.77 million and $7.36 million discounted at 3
and 7 percent, respectively.  Under the 75-percent scenario, cost
savings are expected to increase by $6.33 million and $6.69 million
discounted at 3 and 7 percent, respectively.

Facilities with Motive Power Containers

EPA is amending the Oil Pollution Prevention regulation (40 CFR part
112) to exempt motive power containers, defined 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.”  This definition includes only motor
vehicles that have the ability to move (provide propulsion) to another
physical location.  Examples of motive power containers include fuel
tanks that provide fuel for a motor vehicle’s movement, or the
oil-filled containers that provide the hydraulic and lubrication
ancillary functions of a motor vehicle.  This definition does not
include oil drilling or workover equipment.  Specifically, it does not
apply to the drilling or workover rigs themselves; however, other
earthmoving equipment (such as a bulldozer) located at a drilling or
workover facility is included in the scope of the definition. 

	Although EPA has no empirical data on the amount of such oil storage at
facilities regulated by the SPCC rule, EPA has little or no reason to
suspect that many facility owners and operators with existing SPCC Plans
have included motive power containers in their oil storage capacity
calculations and their Plans.  For those who have considered motive
power storage, EPA assumed that the volume that would be exempt under
the final rule would not represent a large fraction of the facility’s
aggregate capacity. 

Universe of Affected Facilities

	To identify industries that are potentially affected by motive power
exemptions, EPA started with information from industry comments to the
2002 SPCC rule.  Commenters from the crop production, forestry/logging,
and utilities industries indicated that they had motive power equipment.
 EPA identified additional industry categories by examining industries
targeted by major motive power equipment manufacturers such as
Caterpillar Inc., Deere & Company, Kubota Corporation, Joy Global Inc.,
CNH Global NV, and Terex Corporation.  Each of these companies lists the
industries targeted by their products.  EPA used these listings as the
basis for classifying industries likely to have motive power containers.

	EPA does not have data on the number of facilities with motive power
containers with oil storage capacity of 55 gallons or greater.  To
estimate the number of facilities affected by the “motive power”
final rule, EPA arbitrarily developed three scenarios whereby 10
percent, 25 percent, and 50 percent of the facilities in sectors with
motive power containers may be affected by the final rule amendments. 
EPA estimated that over the next 10 years, on average approximately
29,100 facilities would have “motive power” oil storage under the
10-percent scenario; 72,600 facilities under the 25-percent scenario;
and 145,000 facilities under the 50-percent scenario.  This represents
an increase of approximately one percent over estimates used in the
November 2005 proposed rule RIA and is due to adjustments made in the
SPCC universe estimates (as described earlier under Chapter   REF
_Ref140640052 \r  4  of this analysis).    REF _Ref140572923  Exhibit
8-1  presents the projected number of existing and new SPCC-regulated
facilities with motive power containers whose owners and operators of
are expected to take advantage of the final action.

Exhibit   STYLEREF 1 \s  8 -  SEQ Exhibit \* ARABIC \s 1  1 

Projected Number of Existing and New Facilities with Motive Power
Containers (10-Year Average)1

Industry	Existing	New	Total

	Total	10% of Fac.	25% of Fac.	50% of Fac.	Total	10% of Fac.	25% of Fac.
50% of Fac.	Total	10% of Fac.	25% of Fac.	50% of Fac.

Farms	147,000	14,700	36,800	73,700	1,310	131	328	655	149,000	14,900
37,200	74,300

Contract Construction	17,500	1,750	4,380	8,760	495	50	124	248	18,000
1,800	4,500	9,010

Gasoline Stations 	3,700	370	924	1,850	38	4	10	19	3,740	374	934	1,870

Transportation	16,100	1,610	4,020	8,040	494	49	124	247	16,600	1,660
4,140	8,290

Real Estate Rental and Leasing	30,800	3,080	7,690	15,400	663	66	166	332
31,400	3,140	7,860	15,700

Electric Utility Plants	66,200	6,620	16,600	33,100	2,110	211	527	1,060
68,300	6,830	17,100	34,200

Mining	3,140	314	785	1,570	47	5	12	24	3,190	319	797	1,590

Pipelines	643	64	161	321	6	1	1	3	648	65	162	324

Total	285,000	28,500	71,400	143,000	5,160	516	1,290	2,580	291,000	29,100
72,600	145,000

1    The level of precision of the numeric values reflects underlying
data.Compliance Cost Savings

	The main benefit of the 2006 rule amendments would be to provide
greater clarity of EPA’s regulatory intent.  EPA estimated that the
final rule would reduce compliance costs by $1.07 million and $1.07
million per year, discounted at 3 percent and 7 percent, respectively,
which were calculated using the equation below.

	EPA assumed that owners and operators of up to 10 percent of the
facilities in industries identified as having motive power storage might
take advantage of the exemption.  Other facilities could also have
motive power storage; EPA expects, however, that owners and operators of
those facilities have not considered such storage as part of their
compliance with the SPCC rule.  Because EPA expects most facilities with
motive power storage to meet the SPCC rule’s oil storage thresholds
regardless of oil storage for motive power, EPA assumed that the cost
savings from the exemption would be modest (perhaps five percent
compliance cost savings).  As a result of the changes, owners and
operators of existing and new facilities with motive power containers
would save approximately five percent of the major compliance costs,
which are presented in   REF _Ref140572998  Exhibit 8-2 .

Exhibit   STYLEREF 1 \s  8 -  SEQ Exhibit \* ARABIC \s 1  2 

Estimated Annual Compliance Costs1

Compliance Item	Annual Hours Burden	Total Burden Hours	Capital/ O&M
Costs	PE Cost	No Exemption

	Management

($55.7/hr)	Technical

($47.9/hr)	Clerical

($25.3/hr)

Existing Facilities

Five -Year Review - 112.5(b)	0.20	0.59	0.11	0.89	$0.00	$4.50	$46.4

Oil Discharge - 112.4(c)	0.00	0.00	0.00	0.00	$0.02	$0.00	$0.18

Modification of Plan - 112.4(a) and 112.5(a)	0.00	0.41	0.09	0.50	$0.00
$67.8	$89.6

Recordkeeping	0.00	1.64	0.45	2.09	$0.00	$0.00	$89.8

Total Paperwork-Related	0.20	2.63	0.65	3.48	$0.02	$72.3	$226

O&M Costs: Integrity Testing	-	-	- 	- 	- 	- 	$119

Capital Costs	 -	 -	- 	- 	- 	- 	$206

Total O&M and Capital Costs	 -	- 	- 	- 	- 	- 	$325

Total	- 	- 	- 	- 	- 	- 	$552

New Facilities

New Plan - 112.3(a)	5.43	23.4	3.62	32.4	$0.00	$1,810	$3,320

Oil Discharge - 112.4(c)	0.00	0.00	0.00	0.00	$0.02	$0.00	$0.18

Modification of Plan - 112.5(a)	0.00	0.41	0.09	0.50	$0.00	$67.8	$89.6

Recordkeeping	0.00	1.64	0.45	2.09	$40.0	$0.00	$130

Total Paperwork-Related	5.43	25.4	4.16	35.0	40.0	$1,880	$3,540

Integrity Testing	-	 -	- 	- 	 -	- 	$119

Other Capital	 -	 -	 -	 -	 -	 -	$3,590

Secondary Containment	 -	 -	 -	 -	 -	 -	$4,000

Total O&M and Capital Costs	-	-	-	-	-	-	$7,710

Total	5.43	25.4	4.16	35.0	$40.0	$1,880	$11,300

1 	Estimates are based on   REF _Ref140571179  \* MERGEFORMAT  Exhibit
5-2  and   REF _Ref140571258  \* MERGEFORMAT  Exhibit 5-3 .  These cost
estimates only reflect major compliance activities and do not account
for all costs associated with the SPCC requirements.

	Based on these total annual compliance costs, the estimated
per-facility cost savings associated with the final amendments are $28
for owners and operators of existing facilities and $563 for owners and
operators of new facilities.  The cost savings for owners and operators
of new facilities are higher than those for owners and operators of
existing facilities because of greater expenses associated with
preparing a new SPCC Plan and initial start-up and capital costs.

	

	Under the scenario where owners and operators of 25 percent of
industries identified as having motive power storage would take
advantage of the exemption, compliance costs would decrease by $2.69
million and $2.68 million per year, discounted at 3 percent and 7
percent, respectively.  Under the 50-percent scenario, annual compliance
costs would decrease by $5.37 million and $5.35 million, discounted at 3
percent and 7 percent, respectively.

Facilities with Mobile Refuelers

	EPA is amending the Oil Pollution Prevention regulation to exempt
mobile refuelers from the specifically sized bulk storage secondary
containment requirements of §§112.8(c)(2) and (11).  EPA defines a
mobile refueler as a “bulk storage container onboard a vehicle or
towed, that is designed or used solely to store and transport fuel for
transfer into or from an aircraft, motor vehicle, locomotive, vessel,
ground service equipment, or other oil storage container.”  The
general secondary containment requirements of §112.7(c) will still
apply to these mobile refuelers and to the transfers associated with
this equipment.  Since mobile refuelers are mobile or portable bulk
storage containers, the other provisions of §112.8(c) still apply.

	The industry sector most frequently associated with mobile refuelers is
the aviation industry.  EPA researched the regulatory compliance of
airports with SPCC requirements for secondary containment, and found
that some airports do not have sized secondary containment in place. 
EPA found that secondary containment for mobile refuelers is not a
common practice and that mobile refuelers rarely have a designated area
to park.  Factors such as the land value at many commercial airports
prohibits a single, designated parking area for mobile refuelers. 
Additionally, members of the regulated community have expressed concern
that requiring sized secondary containment for airport mobile refuelers
is not practical for safety and security reasons.

	EPA analyzed potential cost savings to all affected industries using an
assumption that owners and operators of new facilities would have to
provide sized secondary containment in accordance with §§112.8(c)(2)
and (11) for mobile refuelers.  Therefore, the estimated annual cost
savings consist of the avoided potential expenditures of providing sized
secondary containment for new mobile refuelers.

Universe of Affected Facilities

	For the aviation industry sector, EPA estimated the total number of new
airports would be approximately 515 in the first year.  Over the next 10
years, approximately 575 new airports are expected to be added annually
on average.  EPA does not have empirical data on the number of
facilities with mobile refuelers with oil storage capacity of 55 gallons
or greater outside the aviation industry sector.  To identify industries
besides aviation that will be potentially affected by the mobile
refueler exemption, EPA started with information from industry comments
in response to the SPCC rule.  Commenters from the following industry
categories indicated that they may have mobile refuelers at their
facilities: agriculture, automotive, chemical, construction, food,
military, paper/forestry, petroleum, railroad, retail fuel delivery,
transport/trucking, utilities, and waste management.  EPA identified and
confirmed additional industry sectors most likely to have mobile
refuelers based on information provided by manufacturers of mobile
refuelers and mobile refueling equipment, and from personal
communication with the Fire Marshalls’ offices in Henderson, NV, and
Houston, TX, which both require permits for mobile refueling activities.

	To estimate the number of facilities within non-aviation industry
sectors affected by the “mobile refuelers” amendment of the final
rule, EPA arbitrarily developed three scenarios whereby 25 percent, 50
percent, and 75 percent of the facilities in other identified sectors
with mobile refuelers may be affected by the 2006 final rule.  EPA
projected that over the next 10 years, on average there would be
approximately 1,760 new facilities with “mobile refuelers” under the
25-percent scenario; 2,940 new facilities under the 50-percent scenario;
and 4,130 new facilities under the 75-percent scenario.    REF
_Ref140573110  Exhibit 9-1  presents the projected number of new
SPCC-regulated facilities whose owners and operators are expected to
take advantage of the “mobile refuelers” amendment of the final
rule.

Exhibit   STYLEREF 1 \s  9 -  SEQ Exhibit \* ARABIC \s 1  1 

Projected Number of New Facilities with Mobile Refuelers (10-Year Annual
Average)

Industry	Projected Number of New Facilities

	Total	25%	50%	75%

Airports1	575	575	575	575

Farms	1,310	328	655	983

Transportation	494	124	247	371

Chemical Manufacturing	65	16	32	48

Contract Construction	495	124	248	372

Food Manufacturing	87	22	43	65

Government	9	2	5	7

Military Installations	12	3	6	9

Mining	47	12	24	35

Petroleum Bulk Stations and Terminals	70	17	35	52

Gasoline Stations	38	10	19	29

Electric Utility Plants	2,110	527	1,060	1,580

Total	5,310	1,760	2,940	4,130

1 	Airports are the only industry for which EPA has empirical evidence
to support the number 	of mobile refuelers per facility.  Other
potentially impacted industries were considered 	based on an arbitrary
range of scenarios (25%, 50%, and 75%) of affected facilities.

Compliance Cost Savings

To assess the impact of giving owners and operators of facilities an
exemption from sized secondary containment for mobile refuelers, EPA
estimated the compliance cost associated with providing sized secondary
containment to an individual mobile refueler.  Because insufficient data
are available to differentiate cost estimates for sized versus unsized
secondary containment, EPA used a general cost estimate for secondary
containment of $6,500 per mobile refueler at an average size facility. 
For both the aviation and other industry sectors, EPA estimated that
each facility has two mobile refuelers based on the assumption that
there are one to three mobile refuelers per airport.  To estimate the
total cost savings, the Agency multiplied the number of projected new
facilities believed to have mobile refuelers by the cost of providing
sized secondary containment, which is $13,000 per facility, as presented
in the following equation:

	

EPA calculated total compliance cost estimates based on the three
arbitrarily developed scenarios whereby 25 percent, 50 percent, and 75
percent of the facilities in sectors with mobile refuelers may be
affected by the final rule.  EPA applied the $13,000 per facility cost
savings to the projected universe of new affected facilities under these
three scenarios to calculate the total cost savings for each scenario. 
Then the Agency annualized the total cost savings over the ten-year
analytical period using the method described in Chapter   REF
_Ref140640066 \r  3  of this analysis, as shown in   REF _Ref140573157 
Exhibit 9-2 .

Exhibit   STYLEREF 1 \s  9 -  SEQ Exhibit \* ARABIC \s 1  2 

Estimated Annual Compliance Cost Savings

	Total Cost Savings (Million $)

	2008

Year 1	2009

Year 2	2010

Year 3	2011

Year 4	2012

Year 5	2013

Year 6	2014

Year 7	2015

Year 8	2016

Year 9	2017

Year 10	10-year Total	Annualized

Not Discounted

25% Scenario	16.0	16.2	16.5	16.8	17.1	17.4	17.7	18.0	18.3	18.7	172.7
$17.3

50% Scenario	32.0	32.5	33.0	33.6	34.2	34.8	35.4	36.0	36.7	37.3	345.4
$34.5

75% Scenario	48.0	48.7	49.5	50.4	51.2	52.1	53.1	54.0	55.0	56.0	518.0
$51.8

3% discounted 

25% Scenario	15.5	15.3	15.1	14.9	14.7	14.6	14.4	14.2	14.1	13.9	146.7
$17.2

50% Scenario	31.0	30.6	30.2	29.8	29.5	29.1	28.8	28.4	28.1	27.8	293.4
$34.4

75% Scenario	46.6	45.9	45.3	44.8	44.2	43.7	43.1	42.6	42.2	41.7	440.0
$51.6

7% discounted 

25% Scenario	14.9	14.2	13.5	12.8	12.2	11.6	11.0	10.5	10.0	9.49	120.1
$17.1

50% Scenario	29.9	28.4	27.0	25.6	24.4	23.2	22.0	21.0	19.9	19.0	240.2
$34.2

75% Scenario	44.8	42.6	40.4	38.4	36.5	34.7	33.0	31.4	29.9	28.5	360.4
$51.3

	Under the 25-percent scenario, EPA estimated that the 2006 rule
amendments would reduce compliance costs by $17.2 million and $17.1
million per year, discounted at 3 percent and 7 percent, respectively,
which EPA calculated assuming that owners and operators of all airports
and approximately 25 percent of the facilities in non-aviation
industries identified as having mobile refuelers might take advantage of
the exemption.  Under the scenario where owners and operators of 50
percent of the facilities in industries identified as having mobile
refuelers would take advantage of the exemption, compliance costs would
decrease by $34.4 million and $34.2 million per year, discounted at 3
percent and 7 percent, respectively.  Under the 75 percent scenario,
annual compliance costs would decrease by $51.6 million and $51.3
million, discounted at 3 percent and 7 percent, respectively.

Alternatives Considered

In the December 2005 proposed revisions to the Oil Pollution Prevention
Regulation, EPA proposed to exempt airport mobile refuelers from the
specifically sized bulk storage secondary containment requirements of
§§112.8(c)(2) and (11).  EPA’s definition of an airport mobile
refueler is a “vehicle with an onboard bulk storage container designed
for, or used to, store and transport fuel for transfer into or from
aircraft or ground service equipment.”

The proposed reduction in compliance costs associated with this
exemption for airport mobile refuelers was based on estimates of
approximately 535 new airports added annually, and the assumption that
each airport would have an average of two mobile refuelers.  The
estimated reductions in compliance costs that correspond to these cost
savings are $6.92 million and $6.86 million, discounted at 3 percent and
7 percent, respectively.  Based on adjustments in the universe of
affected airports and estimated growth rates used in this analysis, EPA
estimated that approximately 575 new airports would be added annually on
average over the next 10 years, an increase of 7.5 percent (40 airports)
over earlier estimates used in the November 2005 regulatory impact
analysis of the proposed rule.  

	

Upon receipt and review of public comments on the proposed changes to
sized bulk storage secondary containment requirements of §§112.8(c)(2)
and (11) for mobile refuelers, EPA agreed with stakeholders’ argument
that similar equipment and intra-facility operations merit the same
consideration and that the changes be extended beyond airports.  As
described earlier under Section   REF _Ref140641538 \r  9.1 , EPA
evaluated other forms and use of mobile refuelers at mining sites,
chemical complexes, construction sites, seaport terminals, facilities
with tank truck home base operations, and other scenarios.  By extending
the proposed exemption for airport mobile refuelers to all industries
with mobile refuelers, EPA estimated an increase in the reduction of
compliance costs beyond those proposed, ranging from $10.3 million to
$44.7 million discounted at 3 percent, and $10.2 million to $44.4
million discounted at 7 percent.  These estimates used for comparison
assume that owners and operators of all airports, and approximately 25
percent of the facilities in non-aviation industries identified as
having mobile refuelers, might take advantage of the exemption.

EPA also considered extending sized bulk storage secondary containment
relief to certain other mobile portable containers such as rail cars and
towed Ground Service Equipment (GSE) that are not themselves
self-powered.  However, no convincing justification could be made to
differentiate railcars used at non-transportation facilities as bulk
storage containers from other bulk storage containers.  EPA determined
that it is reasonable to plan and provide for the same level of
secondary containment in these situations.

Projected Impacts on Human Health, Welfare, and the Environment

The purpose of this chapter is to qualitatively describe the anticipated
environmental and socioeconomic impacts (Section   REF _Ref140641596 \r 
\* MERGEFORMAT  10.1 ), benefits (Section   REF _Ref140641611 \r  \*
MERGEFORMAT  10.2 ), and distributional impacts (Section   REF
_Ref140641626 \r  \* MERGEFORMAT  10.3 ) of the SPCC rule. 

Environmental and Socioeconomic Impacts of Oil Spills

Discharges of both petroleum and non-petroleum oils into the nation's
marine and freshwater environments can cause damage to public health and
welfare, and to the environment.  Discharges from SPCC facilities can
occur whenever oil is handled, stored, produced, transferred, used, or
disposed.  Causes of discharges include human error (e.g., overfilling
tanks during transfer operations), equipment failure (e.g., deteriorated
seals and ruptured pipes or tanks), and improper storage or abandonment.
 

The impact of such discharges into either the marine or freshwater
environment can be devastating in the short term, and some effects may
last for years or even decades.  Although studies have documented
nature's ability to recover over time from the damage caused by a large
oil discharge, both the extent of biological damage and the speed of
recovery depend on many factors, including the geographic location,
quantity of oil discharged, characteristics of the area affected,
weather conditions, the season, the type of oil, and the nature of the
response.

Physical, chemical, and biological transformations of discharged oil
begin immediately upon the oil’s introduction to marine or freshwater
environments.  The rate and degree of transformation depend on several
factors related to advective and spreading processes.  Advection is
caused by the influence of overlying winds and underlying currents on
the oil, while spreading results from the interplay among the forces of
gravity, inertia, friction, viscosity, and surface tension.

The toxicity of a discharge depends on the type of oil.  Freshly
discharged crude is more acutely toxic than weathered oil because of the
presence of the more toxic volatile constituents, which quickly
evaporate or dissolve.  Similarly, lighter refined products (e.g.,
diesel fuel and gasoline) are more acutely toxic than crude but
dissipate more rapidly.

The extent of environmental damage caused by an oil discharge also
depends on the physical, chemical, and biological characteristics of the
surrounding ecosystem.  These characteristics influence the intensity,
time, and spatial extent of contact of aquatic organisms with the oil
products.  In general, oil discharges that affect biologically sensitive
areas (e.g., near-shore areas that have high concentrations of aquatic
organisms, or provide spawning and nursing areas for fish, and nesting
habitat for birds or critical habitats for rare species) will have
greater ecological impacts than, for example, offshore spills.

Oil discharges can be particularly damaging to estuarine environments. 
Unlike ocean discharges that are dispersed by wind and wave action, oil
discharged near the shoreline

typically concentrates and mixes with near-shore waters or collects
along shorelines.  As a result, wetlands, seagrass beds, beaches, rocky
habitats, coral reefs, inter-tidal areas, and terrestrial ecosystems may
be damaged.  Oil deposited in near-shore sediments persists longer than
in ocean sediments.  Oil is particularly persistent in low-energy,
wetland habitats. 

To varying degrees, coastal marine and freshwater environments
throughout the United States serve as breeding and nursing areas for
resident and migratory species of fish and aquatic birds.  Fish can be
affected through ingestion of oil or oiled prey and uptake of dissolved
petroleum compounds through the gills, or by changes in the ecosystem. 
Damage to fish eggs and larvae also may occur.  Aquatic birds,
especially diving birds, are highly vulnerable to oil discharged in
coastal areas.  Feathers that are coated with oil become water-logged
and lose their insulating properties.  As a result, birds may drown or
die of hypothermia.

Oil discharges may also disrupt the structure and function of aquatic
ecosystems.  For example, oil spills may cause long-term damage to
wetlands by adversely affecting the root system of wetland vegetation. 
As a result, wetlands may not be able to provide suitable habitat for
fish and birds.  Differential rates of mortality resulting from oil
discharges also shift food web relationships.  Changes in resource
availability, competition, and predation affect individual organisms. 
Populations of species that are dependent on affected prey or habitats
(e.g., wetlands) will decline, while opportunistic species may increase.
 Rare species, small local populations, or species that are seasonally
concentrated in the impacted habitat are the most likely to decline as a
result of an oil discharge.

Coastal marine and freshwater environments also provide a variety of
resources and services to the public.  The public uses some of these
resources and services directly (e.g., the aesthetic qualities of the
waterfront, recreational fishing, swimming, boating, picnicking, and
waterfowl hunting) while others are useful indirectly.  These indirect
uses may include many ecological functions provided by wetlands (e.g.,
flood control, and the support of fish and wildlife habitats that in
turn have recreational uses).  Still other environmental resources and
services may support non-use values to the public (e.g., knowledge that
endangered species continue to exist, or that aquatic environments
provide healthy habitat to fish).

In response to oil spills, local authorities could close recreational
areas for several weeks, which may lead to significant welfare losses to
recreational users.  In addition to these welfare losses resulting from
lost user days, significant welfare effects may also be associated with
lost use and non-use values of the affected aquatic resources.  Consider
for example, the period over which environmental services provided by
wetlands are lost, which could be several years for areas of moderate to
heavy oil contamination and several months for lightly oiled wetlands. 
Although some of the wetlands affected by oil discharges may recover
over time, others may require restoration.  Returning the set of injured
resources to pre-spill conditions may be costly.  For example, the cost
per acre to plant new wetlands ranges from $2,000 to $4,200.

Oil pollution in aquatic environments can also pose risk to human
health.  The main concern regarding the risk to humans is the known
carcinogenicity of several oil components, and the exposure to toxic
elements in oil through direct exposure or through oil-tainted food. 
The most likely pathway for people to be exposed to oil contaminants is
by direct contact with bare skin.  Children may be at increased risk of
exposure to oil contaminants while playing.  In addition, oil
contaminants can adhere to the fur of pets, and the contamination can be
transferred to people who touch or groom their pets.  Human health risks
also include hazards encountered by workers during cleanup operations. 
Prolonged dermal contact with crude oil and petroleum products can cause
skin erythema (reddening), edema, and burning.  The dermal effects can
be exacerbated by subsequent exposure to ultraviolet light from the sun.
 Human epidemiological studies have shown that high-dose, chronic,
occupational exposure to mineral oils can cause skin cancer.  An
increased risk of skin cancer, sinonasal cancer, gastrointestinal
cancer, and bladder cancer have been reported in occupations with
prolonged contact with mineral oils.

Additionally, oil dischargers may impact drinking water and industrial
water intakes.  Thick oil may clog the equipment.  Other oil types could
make the source water unusable for drinking or other uses.

Benefits of the Final Regulation 

The main benefit of the final rule is lower compliance costs for owners
and operators of certain types of facilities and equipment.  EPA expects
these reduced expenditures to translate to net social benefits.  These
benefits may be partially offset by potential increases in risk of oil
discharges due to the final rule’s having less-stringent requirements
than the existing SPCC rule.  For example, owners and operators of
qualified oil-filled operational equipment that implement a contingency
plan and a written commitment of manpower, equipment, and materials,
instead of implementing preventive measures such as secondary
containment, could see an increase in the risk of discharges. 
Nevertheless, it is reasonable to assume that any non-compliance with
SPCC regulations is at least partially attributable to the costs of
compliance.  To the extent that this is true, reducing the costs of
complying with SPCC requirements may induce owners and operators of some
previously non-compliant facilities to implement oil pollution
prevention measures – thereby reducing risk of discharge.

EPA has designed the final rule to minimize increases in environmental
risk.  For example, regulatory relief for owners and operators of
qualified facilities focuses on facilities that store relatively small
amounts of oil and demonstrate that they have had no discharge greater
than 1,000 gallons or no two discharges greater than 42 gallons in a
12-month period during the past three years.  Furthermore, EPA allows
owners and operators of qualified facilities the option of avoiding PE
certification, but maintains that any decision to apply environmental
equivalence or pursue an impracticability claim still requires PE
certification.

For qualified oil-filled operational equipment, EPA believes the
complexity and the nature of the equipments’ use may not lend itself
to traditional secondary containment methods for bulk storage
containers.  Flexibility for such equipment is appropriate in this area,
and may improve compliance with oil pollution prevention measures.  Most
facilities where these units are located will have general secondary
containment to help prevent discharges as described in §112.1(b).  In
summary, although the final rule may increase the risk of discharge by
an unknown magnitude, EPA believes that any environmental impact will be
minimal, and will be offset by the benefits of increased compliance with
the SPCC rule.

Distributional Analysis

The SPCC rule results in direct and indirect effects that may
precipitate the transfer of economic benefits among various industry
sectors.  One direct impact of the rule is the alternative offered to
owners and operators of qualified facilities that allows them to avoid
using a licensed PE to certify their Plans.  Additionally, facilities
that store oil solely for motive power are no longer regulated, while
owners and operators of facilities with oil storage in addition to
motive power containers will incur lower compliance costs.  This revised
SPCC rule also allows greater use of contingency plans with a written
commitment of manpower, equipment, and materials without requiring an
impracticability determination as an alternative to secondary
containment for qualified oil-filled operational equipment.  Finally,
the rule allows mobile refuelers to fall under a facility's general
secondary containment requirements rather than requiring specific sized
secondary containment.  

Indirect effects of the rule include changes in demand for secondary
containment for mobile refuelers as well as the reduced plan
certification requirements.  The reduction in demand for secondary
containment results in a transfer of income from suppliers to owners and
operators of facilities with mobile refuelers.  In the same way the fee
that was previously charged by professional engineers for Plan
certification is instead transferred back to owners and operators of
qualified facilities who choose self certification. The net impact on a
comprehensive measure of social welfare such as social cost has not been
estimated. 

Another aspect of the distributional analysis is the spatial impact of
the rule with respect to the location of industry-wide regulated
facilities.  EPA’s technique for estimating the SPCC universe
described in Chapter   REF _Ref140640080 \r  4  limits the capacity to
meaningfully consider the spatial distribution of SPCC-regulated
facilities.  However, EPA acknowledges that clustering of SPCC-regulated
facilities exists (such as oil production facilities in the Gulf of
Mexico coastal states), and, therefore, nationally estimated impacts on
owners and operators of regulated facilities may be spatially
disproportional.  

  SEQ CHAPTER \h \r 1 Small Business Analysis

The Regulatory Flexibility Act (RFA) requires federal agencies to
determine whether their regulatory actions will have a significant
economic impact on a substantial number of small entities.  If an agency
does not or cannot certify that a final regulation will not have a
significant economic impact on a substantial number of small entities,
it must prepare a regulatory flexibility analysis and examine
alternatives to the regulation that may reduce adverse economic effects
on significantly impacted small entities. 

	In 1996, Congress enacted the Small Business Regulatory Enforcement
Fairness Act (SBREFA), which amended the RFA to strengthen its
analytical and procedural requirements and to expedite Congressional
review of rules.  SBREFA amended the RFA to reference the definition of
a “small entity” found in the Small Business Act, which itself
authorizes the Small Business Administration (SBA) to further define
“small business” by regulation.  The SBA’s small business
definitions are codified at 13 CFR 121.601 and the SBA reviews and
reissues these definitions every year.  

In determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the primary
purpose of the regulatory flexibility analyses is to identify and
address regulatory alternatives "which minimize any significant economic
impact of the final rule on small entities." 5 U.S.C. 603 and 604. 
Thus, an agency may certify that a rule will not have a significant
economic impact on a substantial number of small entities if the rule
relieves regulatory burden, or otherwise has a positive economic effect
on all of the small entities subject to the rule. 

	The amendments to the SPCC rule reduce the burden on small businesses
to the extent that these businesses are eligible for reduced regulatory
requirements for qualified facilities, facilities with qualified
oil-filled operational equipment, facilities with motive power
containers, and facilities with mobile refuelers.  Because the SPCC rule
categorizes affected entities based on oil storage capacity while SBA
defines small businesses based on the business’ total number of
employees or total annual revenue, EPA does not know how many
SPCC-regulated facilities are also SBA-defined small businesses. 
Nevertheless, given their resource constraints, owners and operators of
small businesses are likely to take advantage of and benefit from the
regulatory burden relief offered by the current amendments.  

  REF _Ref140573259  Exhibit 11-1  summarizes cost savings for these
rule components for owners and operators of Category I facilities
(10,000 gallons or less).  Because some facilities fall into more than
one rule component category, the number of facilities and cost savings
across rule categories are not additive.  The cost saving estimates
presented for each of these components are based on the estimated number
of Category I affected facilities described in Chapter   REF
_Ref140640093 \r  4 , which are mapped into the rule categories for
which they are eligible, and the unit cost estimates for affected
compliance activities described in Chapter   REF _Ref140640103 \r  5  of
this report.  Thus, the Agency concludes that the final amendments to
the 2002 SPCC rule provide regulatory relief for relatively small
entities based on oil storage capacity, and therefore do not have any
adverse impact on small businesses.

Exhibit   STYLEREF 1 \s  11 -  SEQ Exhibit \* ARABIC \s 1  1 

Estimated Cost Savings for Category I SPCC-Regulated Facilities

Rule Component	Number of Facilities

(10-Year Average)	Total Cost Savings (millions $, discounted 3%)	Total
Cost Savings 

(millions $, discounted 7%)

	Existing	New	Total

Qualified Facilities	       337,000 	           7,260 	       345,000 
37.9	37.7

Qualified OFE	 N/A 	           2,580 	           2,580 	31.2	31.0

Motive Power	         21,700 	              329 	         22,000 	1.1
1.1

Mobile Refuelers	 N/A 	           1,400 	           1,400 	34.4	34.2

Total	       359,000 	         11,600 	       371,000 	105.0	104.0

	It is important to note that cost savings for owners and operators of
Category I facilities under the amendments to the SPCC rule (  REF
_Ref140573259  Exhibit 11-1 ) represent a higher level of overall
savings as compared to the proposed rule for two primary reasons. 
First, this regulatory impact analysis used the most currently available
data to estimate a larger number of SPCC-regulated facilities than the
analysis conducted for the proposed rule.  Second, the final SPCC
amendments offer a greater degree of regulatory relief to owners and
operators of SPCC-regulated facilities than the proposed revisions.

  SEQ CHAPTER \h \r 1 Limitations and Key Assumptions

According to Executive Order 12866, agencies are required to assess all
costs and benefits of regulatory activities, including quantitative and
qualitative measures.  The Executive Order also requires assessment of
social benefits and costs including but not limited to those related to
the environment, public health and safety, distributive impacts, and
issues of equity. 

This regulatory impact analysis estimates the reductions in compliance
costs resulting from the final rule.  The benefits of the major
components of the final rule are assessed qualitatively and limited to
reductions in expenditures accruing from lower compliance costs.  The
Agency also considered whether the streamlined requirements in the final
rule might increase the risk of discharges, with adverse consequences
for the environment, human health, and welfare.  Because EPA has
designed the final rule to minimize increases in environmental risk, the
frequency of oil spills is not expected to increase.  While this
regulatory impact analysis provides an assessment of projected impact on
human health, welfare, and the environment, as well as estimated
reductions in compliance costs, it is not a full accounting of all
social costs and benefits as required by Executive Order 12866.

Many of the assumptions as well as the estimates of unit cost savings
and the number of affected facilities presented in this RIA are
inherently uncertain.  EPA made the best use of the available data to
make informed decisions regarding assumptions used in the analysis.  To
address major uncertainties involved in estimating the total cost
savings from the final SPCC rule, the Agency examined up to three
scenarios for various components of the final rule to provide a
sensitivity approach to estimating the range of cost savings.  Major
limitations of the analysis are described in this chapter.  In Section  
REF _Ref140641641 \r  12.6 , a potential impact of technology
innovations is described in relation to compliance requirements of the
SPCC rule.

General Limitations

Estimated Number of Facilities

  SEQ CHAPTER \h \r 1 One of the main limitations of the regulatory
analysis is EPA’s lack of data on facilities regulated under the SPCC
rule.  The rule does not include a notification requirement and, with
certain exceptions, regulated entities do not need to submit any
information to EPA.  Without conducting a statistically valid survey,
EPA is limited to data already collected by state or federal agencies or
by proprietary sources.  Such data are collected for diverse purposes
and are not ideal for identifying SPCC-regulated facilities, as the data
do not normally provide information on smaller storage tanks or
non-petroleum oil.  Therefore, evaluating regulatory changes involves
some uncertainties because the collected data often omit portions of the
regulated universe or lack sufficient detail to ascertain the impacts of
changes in certain requirements.

Estimated Cost of Compliance

Compliance costs incurred by owners and operators of facilities in the
baseline depend not only on the volume of oil stored and handled, but
also on the types of oil at a site, the number of tanks (and their
volume), and the locations of the tanks across the site.  Given a wide
range of industries and facility sizes affected by the SPCC rule – as
well as geographical and climatic conditions that affect facility’s
configuration and operation patterns – a realistic baseline against
which regulatory changes are measured cannot be reliably determined. 
Therefore, uncertainty is involved in estimating the changes in
compliance costs that could occur under final regulatory actions.

M  SEQ CHAPTER \h \r 1 any of the cost estimates used in the regulatory
analysis are based on interviews with a limited number of PEs.  The data
provided by these PEs represent anecdotal information and are not
statistically valid, so they cannot be reliably extrapolated to a larger
universe.  In addition, the PEs were hesitant to provide “typical”
costs when the costs of compliance depend significantly on site-specific
factors.  Ideally, a regulatory analysis would explicitly account for
such variability in costs.  However, in this analysis EPA was unable to
differentiate compliance costs due to the lack of information on site
characteristics of entities affected by the final SPCC rule.

Qualified Facilities

Estimated Number of Qualified Facilities

As described in Chapter   REF _Ref140640118 \r  6 , to identify
facilities with total storage capacity of 10,000 gallons or less that
had reportable discharges in the past three years, EPA used National
Response Center (NRC) Incident Data.  The main limitation of the NRC
database for this analysis is the lack of information on the total
amount of oil stored at a facility, whose owner or operator reported an
oil discharge.  The Agency identified individual facilities whose owner
or operator reported oil discharges of 10,000 gallons or less and used
that figure as a proxy for the number of facilities with total storage
capacity of 10,000 gallons or less.  This approach likely results in
overestimating the number of facilities with total storage capacity of
10,000 gallons or less that have had reportable discharges in the past
three years, given that most facilities are not expected to discharge
their total oil storage capacity.  That is a portion of the discharges
at 10,000 gallons or less could have been from facilities with much
larger oil storage capacities.  Because it is not feasible to establish
a relationship between the amount of oil discharged and total storage
capacity at a facility, EPA examined three scenarios  SEQ CHAPTER \h \r
1 : 25 percent, 50 percent, and 75 percent of facilities that reported
oil discharges of 10,000 gallons or less have total oil storage capacity
of 10,000 gallons or less.

Facilities with Qualified Oil-Filled Equipment

Estimated Number of Facilities with Qualified Oil-Filled Equipment

The availability of data on facilities with oil-filled operational
equipment regulated under the SPCC rule was significantly limited. 
Facility owners or operators are not required to report the number of
oil-filled operational equipment pieces they possess, or the oil storage
capacity of their oil-filled operational equipment.  

	Because self-reported data were not available, EPA relied on available
data sources to estimate the number of facilities that have oil-filled
operational equipment on site.  A list of industries using oil-filled
operational equipment was determined, based on a review of the type of
equipment covered by the definition of oil-filled operational equipment,
and on EPA’s expectations regarding the industries that commonly use
this equipment.  Thus, the industries included in the universe of
facilities with oil-filled operational equipment were determined using
professional judgment rather than industry data.

The number of SPCC-regulated facilities within each industry was
estimated as part of the SPCC universe research described in Chapter  
REF _Ref140640131 \r  4 .  Those data represent the estimated number of
SPCC-regulated facilities in each industry sector, and not the actual
number of facilities that use oil-filled operational equipment.  As a
result, EPA   SEQ CHAPTER \h \r 1 examined the impact of the final SPCC
rule changes for the facilities with oil-filled operational equipment
under the three possible scenarios: 25 percent, 50 percent, and 75
percent of facilities in the industries identified as having oil-filled
operational equipment will obtain regulatory relief.  The number of
facilities with oil-filled operational equipment that EPA presents in
the RIA may overestimate or underestimate actual figures.  This
uncertainty causes similar imprecision in the estimates for the total
cost savings associated with the final rule changes for owners and
operators of facilities with qualified oil-filled operational equipment.

Estimated Cost Savings for Owners and Operators of Facilities with
Qualified OFE

	In the final SPCC rule, EPA is providing owners and operators of
facilities with certain types of oil-filled operational equipment the
option of preparing an oil contingency plan and a written commitment of
manpower, equipment, and materials in lieu of providing secondary
containment.  EPA acknowledges that in the absence of the final rule,
some fraction of new facilities would, according to the 2002 SPCC rule
requirements, provide an impracticability determination with a
contingency plan and a written commitment of manpower, equipment, and
materials, rather than pursue secondary containment.  In these cases,
the cost savings resulting from the final rule would be lower, since
owners and operators would be avoiding only an impracticability
determination rather than secondary containment.  EPA does not know the
fraction of facilities that falls into this situation, and did not
incorporate this scenario in the analysis.  As a result of this
limitation, the RIA may overestimate the cost savings to owners and
operators of facilities with qualified oil-filled operational equipment
resulting from the final action.  On the other hand, uncertainties
associated with the unit cost saving estimates for owners and operators
of facilities with oil-filled operational equipment may cause
underestimation of the total cost savings.

  SEQ CHAPTER \h \r 1   SEQ CHAPTER \h \r 1 

Motive Power 

	Since owners and operators of facilities are not required to report the
number of oil storage tanks or storage capacity of their motive power
equipment, the availability of data on SPCC-regulated facilities with
motive power equipment is limited.    SEQ CHAPTER \h \r 1 To identify
industries that are potentially affected by the motive power exemption,
EPA used the information from industry comments for the NODA submitted
to EPA as well as from research on equipment manufacturers.  Commenters
from the crop production, forestry/logging, and utilities industries
indicated that they had motive power equipment.  EPA identified
additional industry categories by examining sectors targeted by the
major motive power equipment manufacturers such as Caterpillar, Deere &
Company, Kubota Corporation, Joy Global Inc., CNH Global NV, and Terex
Corporation.  EPA used the industries targeted by these manufacturers as
the basis for classifying industries likely to have motive power
containers.

	The number of SPCC-regulated facilities within each industry was
estimated as part of the SPCC universe research described in Chapter  
REF _Ref140640143 \r  4  of this report.  Those data represent the
estimated number of SPCC-regulated facilities in each industry sector
and not the actual number of facilities with motive power containers. 
Since EPA had no empirical data on the fraction of facilities with
motive power containers with oil storage capacity of 55 gallons or
greater, it estimated the number of affected facilities by examining
three scenarios: 10 percent, 25 percent, and 50 percent of the
facilities in sectors with motive power containers will be affected by
the final regulatory action.  Therefore, the universe of facilities with
motive power containers presented in the RIA may overestimate or
underestimate the actual numbers.  This uncertainty causes similar
imprecision in the estimated cost savings resulting from the final rule
changes.

Mobile Refuelers

	Aside from the aviation industry, EPA had limited data regarding
industries with mobile refuelers on site that fall under EPA's
jurisdiction.  To identify potentially affected industries, EPA used the
following data sources: (1) NODA comments submitted to EPA; (2) publicly
available information on manufacturers of mobile refueling equipment;
and (3) state fire marshall offices that require permits for mobile
refueling activities.  The Agency used the estimated number of
SPCC-regulated facilities within each industry, as described in Chapter 
 REF _Ref140640154 \r  4 . 

	However, no data were available on the number of facilities within
these industry sectors that actually have mobile refuelers.  As an
alternative, EPA examined three potential scenarios: owners and
operators of 25 percent, 50 percent, and 75 percent of facilities in the
affected industries would take advantage of the regulatory action.  The
three scenarios are designed to yield a reasonable range of estimates
and help EPA evaluate the range of cost savings that could occur as a
result of the final rule changes.  Each of these scenarios could result
in an under- or overestimate of the affected number of facilities with
mobile refuelers.

	An additional uncertainty comes from the possibility that owners and
operators of facilities in many industries have adjusted their processes
in order to avoid falling under EPA's jurisdiction (O'Neil, 2006).  For
example, a construction company may have changed its practices so that
multiple job sites are serviced by one or more mobile refuelers rather
than having an individual refueler at each job site.  For this company,
all but one site, where the refuelers are parked, will be covered under
the Department of Transportation's jurisdiction, with only the single
site being covered under the SPCC rule. 

Impact of Technological Innovations

	OMB’s guidance to federal agencies on the development of regulatory
analysis recommends that estimates of costs should be based on credible
changes in technology over time.  The estimates presented in this report
are based on currently available technologies.  The figures do not
capture possible cost savings from implementing new future technologies
or the reduction in costs due to greater market penetration of existing
technologies.  Because the final SPCC rule allows owners and operators
of facilities to choose alternative requirements that primarily involve
paperwork-related activities over capital-intensive compliance measures
(e.g., providing secondary containment), the nature of evolving
technology could affect the estimated cost savings.  For example, if new
technologies were to lower the cost of capital-intensive compliance
measures, the cost savings attributed to the final rule would decrease. 

	As a performance-based regulation, the SPCC rule provides facility
owners and operators significant flexibility in the methods, equipment,
and procedures they implement to comply with the rule requirements. 
Most rule requirements are written in terms of their ultimate goal of
preventing oil discharges from reaching navigable waters, giving
facility owners and operators considerable leeway in the selection and
specific design of spill prevention measures implemented at the
facility. 

	The rule provides further flexibility by allowing the use of
alternative measures that provide equivalent environmental protection
for most provisions, with the exception of secondary containment
requirements.  Finally, rather than incorporating specific industry
standards or procedures, the rule relies on the application of good
engineering judgment in determining appropriate, and cost effective,
methods for preventing oil discharges.  Industry standards and good
engineering practice evolve over time to incorporate new technologies,
which can lower the cost of preventing discharges.  

	For example, the cost of integrity testing for bulk storage containers,
as required under §112.8(c)(6), may decrease as new non-destructive
evaluation technologies are developed.  The development of robotic
inspection technologies may enable tank owners or operators to assess
the tank floor’s condition without taking the tank out of service and
cleaning it for safe confined space entry.  These technologies not only
reduce the health and safety hazards and the amount of waste generated
by the cleanup operations (and therefore the cost), but also avoid the
two to six weeks of downtime that are sometimes required to complete
cleanup and inspection.  A recent study performed for the New York State
Energy Research and Development Authority (NYSERDA) favorably compared
the results of conventional tank floor inspections with robotic
inspections, and concluded that the use of robotic inspections could
achieve significant cost savings. Companies that currently use such
techniques report savings of $500,000 to over $3 million, depending on
the number, size, and contents of the tanks.  Robotic inspection
technologies are currently being used on a limited basis and may in time
become more widely available – and cheaper. 

Key Assumptions

EPA made three key assumptions in the analysis.  First, the Agency
assumed cost minimization behavior applied to owners or operators of all
facilities that qualify for reduced regulatory requirements, whereby all
those affected would seek burden relief.  Second, EPA assumed that
owners or operators of existing SPCC-regulated facilities would forgo
alternative compliance activities that required capital investments
because they would have already incurred a one-time cost.  For example,
a facility owner or operator, who had secondary containment for
qualified oil-filled operational equipment in place, would not take
advantage of the provided alternative to prepare a contingency plan
instead.  Third, EPA assumed compliance was nationally consistent
despite variability in state regulations, political climate, and the
distribution of affected facilities.

  SEQ CHAPTER \h \r 1 Conclusions

Under Executive Order 12866 (58 FR 51735, October 4, 1993), EPA must
determine whether a regulatory action is “significant” and therefore
subject to Office of Management and Budget (OMB) review and the
requirements of the Executive Order.  The order defines “significant
regulatory action” as one that is likely to result in a rule that may:

Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local, or tribal governments or communities;

Create a serious inconsistency or otherwise interfere with an action
taken or planned by another agency;

Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or

Raise novel legal or policy issues arising out of legal mandates, the
President’s priorities, or the principles set forth in the Executive
Order.

The final rule is expected to have an annual effect on the economy of
$100 million or more and, therefore, is considered economically
significant.  For such rules, the Executive Order requires an
“assessment of the potential costs and benefits of the regulatory
action, including an explanation of the manner in which the regulatory
action is consistent with a statutory mandate and, to the extent
permitted by law, promotes the President's priorities and avoids undue
interference with state, local, and tribal governments in the exercise
of their governmental functions.”  

EPA performed a regulatory impact analysis in accordance with Executive
Order 12866 (and OMB Circular A-4) requirements to the fullest extent
possible; however, the study is not a comprehensive analysis of the
social benefits and costs.  Many of the assumptions presented throughout
this regulatory analysis are inherently uncertain, as are many of the
estimates of unit cost savings and the number of affected facilities. 
EPA made the best use of the available data to make informed decisions
regarding assumptions used.  To address major uncertainties involved in
estimating the total cost savings from the final SPCC rule, the Agency
examined up to three scenarios for various components of the final rule
to provide a sensitivity approach to estimating the range of cost
savings.  

Data limitations prevented the analysis from complying with the "good
practices" outlined in OMB Circular A-4 guidance for regulatory analyses
of social benefits and costs.  However, EPA believes the analytical
technique and results generated are useful, informative, and based on
the best available information given time and resource constraints
associated with the final rulemaking schedule.

Overall, the analysis concluded that the SPCC amendments will result in
significant compliance cost savings to industry as compared to the 2002
rule, by reducing regulatory requirements for owners and operators of
qualified facilities, qualified oil-filled operational equipment, motive
power storage, and mobile refuelers.    REF _Ref140573363  Exhibit 13-1 
summarizes the estimated annualized compliance cost savings resulting
from the SPCC amendments, using 3 and 7 percent discount rates.  The
amendments are expected to yield annualized cost savings of roughly $38
million for owners and operators of qualified facilities, $39 to $67
million for owners and operators of qualified oil-filled equipment, $1
to $5 million for owners and operators of facilities with motive power
containers, and $17 to $52 million for owners and operators of
facilities with mobile refuelers.  These estimates are not necessarily
additive, given that they do not account for interactions among the
various components of the amendments.  EPA improved the estimation
methodology and refined main assumptions used in the analysis for the
proposed rule.  The comparison of the estimated cost savings between the
proposed and the final rule are presented in Appendix E.  

Exhibit   STYLEREF 1 \s  13 -  SEQ Exhibit \* ARABIC \s 1  1 

Summary of Estimated Cost Savings Associated with the 2006 Final Rule
Amendments

($2005 Millions)

Rule Component/Scenario1	Annualized Cost Savings (3%)	Annualized Cost
Savings (7%)

Qualified Facilities	$37.9 	$37.7 

Qualified OFE

25%	$39.0 	$38.7 

50%	$53.1 	$52.8 

75%	$67.2 	$66.8 

Motive Power

10%	$1.07 	$1.07 

25%	$2.69 	$2.68 

50%	$5.37 	$5.35 

Mobile Refuelers

25%	$17.2 	$17.1 

50%	$34.4 	$34.2 

75%	$51.6 	$51.3 

1 	Estimated savings are presented for final rule components and
scenarios as discussed in this report. 

EPA is aware of industry concerns regarding potential non-compliance
among certain facility sizes or sectors, although no reliable empirical
data exist to assess the scope and magnitude of such non-compliance. 
Even if facilities that should have been in compliance with SPCC
requirements – dating back to 1973, if applicable – EPA acknowledged
that they have already effectively incurred the costs of meeting SPCC
requirements given the active status of the rule for these facilities. 
In other words, facilities that are currently non-compliant are merely
postponing the actual expenditures of compliance.  Therefore, facilities
that are currently non-compliant will incur expenditures associated with
coming into compliance, but these costs, to the extent that they are
attributable to the 2002 SPCC rule, are not attributable to the current
rulemaking.  

The main benefit of the final rule is lower compliance costs for owners
and operators of certain types of facilities and equipment, which EPA
expects will yield net social benefits.  However, as discussed in
Chapter   REF _Ref140640170 \r  10  of this report, these benefits may
be partially offset by potential increases in oil discharge risk
pursuant to the less stringent requirements of the current rulemaking as
compared to those of the existing 2002 SPCC rule.  At the same time, by
reducing the costs of complying with SPCC requirements, the current
rulemaking may induce owners and operators of previously non-compliant
facilities to conform to SPCC requirements, thereby lowering oil
discharge risk.  While quantifying net social benefits precisely is not
possible due to these unknown future impacts of the rule, EPA believes
that cost reductions resulting from the amendments will not be offset by
any significant losses in environmental protection.

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APPENDIX A

DATA SOURCES USED TO ESTIMATE THE UNIVERSE OF SPCC-REGULATED FACILITIES

State Databases

Florida

Florida Department of Environmental Protection, Storage Tank Facility
Information–All Locations and Tank Information

The Florida Department of Environmental Protection’s Storage Tank
Program regulates underground storage tanks (USTs) larger than 110
gallons and aboveground storage tanks (ASTs) with capacities greater
than 550 gallons storing petroleum products and hazardous substances. 
The regulations apply only to owners and operators of non-residential
facilities.   USTs and ASTs with a capacity of less than 30,000 gallons
that store heating oil for use on the premises where they are stored are
exempt from regulation.  Tanks storing asphalt or asphalt products,
tanks directly related to oil production and gathering, pipeline
facilities, loading racks, oil-filled operational and electrical
equipment, and flow-through process tanks are not regulated.  Mobile
tanks and tanks constructed prior to 1998 located within a vault or
building are also exempt.  The data include information on tank
capacity, the material stored, and the facility name and address. 
Facilities are classified into 17 types.

Kansas

Kansas Department of Health and the Environment (KDH&E), Permitted Tanks
Database

KDH&E requires owners of petroleum storage tanks to apply for permits. 
For ASTs and USTs in farm and residential use, tanks larger than 1,100
gallons are regulated.  For other tanks, the minimum size for which a
permit is required is 660 gallons for ASTs and 110 gallons for USTs. 
The database contains records of 6,445 USTs at 2,375 facilities and
9,576 ASTs at 3,362 facilities.  It includes facility names and
addresses, and tank status, capacity, and contents.

Maryland

Maryland Department of the Environment (MDE), AST Oil Operations
Database

The MDE Oil Control Program regulates petroleum storage tanks. 
Registration is required for ASTs at facilities with at least 10,000
gallons of storage capacity or at least 1,000 gallons of storage
capacity for used oil.  The state provides data that include facility
name and address, tank capacity, substance stored, and the facility’s
four-digit U.S.  Standard Industrial Classification (SIC) code.  Only
tanks currently in use or temporarily closed are included in the
database used in the analysis.  The Maryland AST database contains
records of 6,330 active tanks at 691 facilities.

Maryland Department of the Environment (MDE), UST Oil Operations
Database

Owners of USTs that store petroleum products are required to register
their tanks.  Farm and residential USTs smaller than 1,100 gallons are
exempt.  Facility name and address, tank capacity, and substance stored
are listed for each tank.  The database includes only tanks that are
currently in use or temporarily closed.  The facilities are grouped into
23 categories, with 29 percent designated as “other” or “not
listed.”  The database includes 13,015 USTs at 5,656 facilities.

This database was used in EPA’s 1991 facilities study.  The advantage
of using Maryland’s databases is that they record information on SIC
codes or industry groups.  The main disadvantage of this database is
that it does not contain information on facilities that store 10,000
gallons or less of oil.

Minnesota

Minnesota Pollution Control Agency (MnPCA), Tanks Database

The MnPCA's Tanks Database covers both ASTs and USTs.  Registration is
required for ASTs larger than 500 gallons and USTs covered by the EPA
UST program.  The requirements exempt farm and residential ASTs and USTs
smaller than 1,100 gallons storing motor fuel for noncommercial purposes
and those smaller than 1,100 gallons storing heating oil for consumptive
use.  For each tank, the database provides the facility name and
address, tank capacity, and tank contents.  Facilities are also
designated as one of 35 facility categories.  Only active and
temporarily closed tanks are included for the 12,799 facilities in the
database.  Of these, 6,014 facilities have ASTs and 7,569 have USTs. 
The database shows 13,706 active USTs and 22,857 active ASTs at these
facilities.

As with the other state databases, the main disadvantage of this
database is that it covers only petroleum and related oils.  It does not
include SIC or North American Industry Classification System (NAICS)
codes, but there are 35 broad industry sectors assigned to the
facilities.

New York

New York State Department of Environmental Conservation (DEC), Petroleum
Bulk Storage Database

The Petroleum Bulk Storage Program regulates petroleum storage at
facilities with at least 1,100 gallons of storage capacity.  Information
on regulated tanks is contained in the Petroleum Bulk Storage Database. 
The database contains information on facility name and address and tank
status, capacity, and contents.  The database includes information on
65,534 tanks at 55,757 facilities.

New York State DEC, Major Oil Storage Facilities Database

The Major Oil Storage Facilities Program regulates petroleum terminals
and transport vessels operating in New York waters with a total storage
capacity of 400,000 gallons or more.  The database contains information
on 9,181 tanks at major oil storage facilities.  Information includes
facility name and address, tank capacity, tank contents, and tank
status.

Oklahoma

Oklahoma Corporation Commission (OCC), Petroleum Storage Tank Database

The Petroleum Storage Tank Database contains registration information on
USTs and ASTs.  For residential and noncommercial agricultural use, USTs
over 1,100 gallons must register.  For all other uses, owners of tanks
greater than 110 gallons must register their tanks.  The only ASTs that
require registration are those at airports, marinas, retail facilities,
water and sewage treatment plants, emergency generators at hospitals,
commercial facilities, and bulk plants.  Tanks larger than 110 gallons
must be registered, except at bulk plants and commercial facilities
(where tanks of any size must be registered).  The OCC database divides
tanks into eight categories of public facilities and eight categories of
private facilities.

The coverage of the Oklahoma AST database is limited.  This database
could be useful, but EPA is not able to examine the number of facilities
or types of information included.  For security reasons, this database
is not normally available to the public and requires a formal request to
obtain it.

Virginia

Virginia Department of Environmental Quality (DEQ), Registered Tanks
Database

The Virginia DEQ maintains a database of ASTs and USTs storing petroleum
products.  ASTs over 660 gallons or facilities with a total capacity
over 1,320 gallons are required to register.  For USTs, the database
covers tanks subject to regulation under the EPA UST program.  Facility
name and address, tank status, tank capacity, and tank contents are
included.  Partially buried tanks with at least 10 percent of their
volume below ground level are defined as USTs.  Facilities are
designated as one of 21 industry categories.  The database covers 25,769
facilities, of which 12,804 have tanks that are currently in use or
temporarily closed.  Approximately 3,000 facilities have ASTs, and
10,490 have USTs.

Wisconsin

Wisconsin Department of Commerce, Storage Tank Database

Wisconsin's Storage Tank Database contains information on registered
ASTs and USTs in the state.  Registration is required for tanks storing
petroleum products and CERCLA hazardous substances.  All USTs larger
than 60 gallons must register.  The size threshold is 1,100 gallons for
farm and residential ASTs, and 110 gallons for other USTs.  The database
includes facility name and address, and tank status, capacity, and
content.  The database includes 70,549 tanks that are currently in use.

Other Databases

2002, 1997, and 1992 Economic Census, United States

The Economic Censuses cover nearly all of the U.S. economy in its basic
collection of establishment statistics.  The Economic Census measures
activity during each calendar year, 1992, 1997, and 2002.  

Economic Census statistics are collected and published primarily by
"establishment."  An establishment is a business or industrial unit at a
single physical location that produces or distributes goods or performs
services, for example, a single store or factory.  Many companies own or
control more than one establishment, and those establishments may be
located in different geographic areas and may be engaged in different
kinds of business.

The number of establishments for various industry sectors was used in
this analysis.  The Economic Census does not generally include
governmental organizations, even when their primary activity would be
classified in industries covered by the census.  Exceptions have been
made to include certain governmental activities in the Economic Census,
such as hospitals, government-owned liquor stores, university
publishers, and Federal Reserve Banks.

2002, 1997 and 1982 Census of Agriculture and USDA Agricultural
Statistics Service

EPA used Census of Agriculture data on production expenses related to
petroleum-related purchases from 2002 and 1997, and on diesel storage
data from 1982 to estimate the number of farms.  EPA also used Census of
Agriculture data on the number of farms reported from 1996 to 2005.

The National Agricultural Statistical Service (NASS) collects census
data from a list of all known potential agriculture operators.  This
list is assembled from previous census records, state and federal
agencies, trade associations and similar organizations that could be
identified as associated with agriculture.  However, the list is not
complete.  Producers go in and out of business every day and many small
operations are never identified.  The coverage adjustments are
generated, and therefore most accurate, at the state level.

Commercial Building Energy Consumption Survey (CBECS), 1995 and 2003

The CBECS is a national sample survey that collects data on
energy-related building characteristics, and energy consumption and
expenditures, including information on fuel oil used and stored (this
activity was discontinued after 1995) for commercial buildings in the
United States.  The CBECS was first conducted in 1979; the eighth, and
most recent survey, was conducted in 2003.  CBECS is currently conducted
every four years.

 

Form EIA-906 Monthly Utility Power Plant Database, 2000

EPA used summary statistics on oil capacity at electric utilities from
the Energy Information Administration (EIA).  The data are compiled by
EIA based on the stocks information reported on Form EIA-906, "Power
Plant Report" and EIA-920, "Combined Heat and Power Plant Report." 
These forms collect data from electric power generators with at least
one megawatt (MW) of total plant nameplate capacity.  Reporting plants
are either operating or in a standby mode from which they can be quickly
returned to service.  Stocks are estimated by EIA for non-respondents
based on the historical stocks information for those plants.

The main limitation of these data is that the EIA does not collect data
on power plants with less than one MW of nameplate capacity.  The data
used are for 2003, the most recent year for which EIA has final data.

EIA, U.S. Department of Energy

The Energy Information Administration (EIA) of the U.S. Department of
Energy provides official energy statistics from the U.S. government. 
The EIA reports estimates for the number of oil wells in the country. 
EIA databases contain historical data on oil and gas wells, including
marginal wells for 1919 through 2004.  EIA compiled the database using
government and commercial data sources.  In its Annual Energy Outlook,
EIA reports forecasts for total oil production data through 2030.

APPENDIX B

DETERMINING INDUSTRY CATEGORIES FOR SPCC-REGULATED FACILITIES BASED ON
THE DUN&BRADSTREET DATABASE

In order to obtain industry information for facilities in the eight
state databases used in the SPCC universe study, EPA matched facility
names and addresses contained within the state databases with the Dun &
Bradstreet (D&B) Market Spectrum database.  The matching process
involved an automated process developed by Abt Associates Inc.  For
records identified by the automated process as possible matches, the
records were visually inspected to confirm or reject the associations.

The eight state databases used in the analysis include records on
140,438 facilities.  The automated process could not match most records,
as shown in   REF _Ref140575548  Exhibit B-1 , which presents the
percentage of records for each state that could be matched.  Due to
resource constraints, manual matching for each record was not possible,
as manual matching takes approximately one minute per record.  The
following sections describe the fuzzy matching methodology in
detail.Exhibit B-  SEQ Exhibit \* ARABIC \s 1  1 

Percentage of Matched Facilities Achieved by Automated and Manual
Matching

State	Total Number of Records	Percentage Matched	Scale Factor1

Florida	24,613	35%	2.9

Kansas	3,062	81%	1.2

Maryland	6,432	53%	1.9

Minnesota	6,932	43%	2.4

New York	38,735	28%	3.6

Oklahoma	1,193	45%	2.3

Virginia	11,935	36%	2.8

Wisconsin	47,536	21%	4.8

1 	The scale factor is calculated as one divided by the percentage of
matched facilities, and reflects the proportion of facilities that
matched relative to the total number of SPCC-regulated facilities from
the state databases.  The number of matched facilities is multiplied by
the scale factor to estimate the total number of SPCC-regulated
facilities for each industry within each state database.  By using the
scale factor, EPA assumed that the distribution of facilities across
industries is identical for matched and unmatched facilities.  To the
extent that this assumption is incorrect, the estimate of total
facilities per industry in each state may be an over- or underestimate.

Fuzzy Matching

EPA matched facilities from the state databases to industries reported
in the D&B Market Spectrum data using the fuzzy matching methodology. 
The term “fuzzy” refers to logical systems that do not require exact
equality of two values in order to classify the two values as equal. 
The matching procedure assigns D&B records to a facility in a state
database even if some identifying fields do not match exactly.  This
approach accommodates misspelled words and inconsistencies in how a
facility owner or operator reports its identifying information to
different sources, and how the information reported by the facility
owner or operator is stored in different databases.  For example,
“Tosco Santa Maria Refinery” and “Tosco Refining Co. Santa Maria
Facility” refer to the same facility despite the differences in
presentation.  The fuzzy matching algorithm identifies a possible match
based on similarities in two datasets, rather than exact equality in the
field.

Standardization Procedure as Part of Record Linking

 

Prior to performing fuzzy matching, Abt Associates Inc. standardized the
variables (names, addresses, and ZIP codes) used by the matching program
to link records from the two datasets in order to maximize successful
matches.  To compensate for common typographical errors and
abbreviations, Abt developed a function to normalize (or standardize)
the data.  With appropriate standardization, comparison of corresponding
components of information becomes more effective.  The standardization
procedure also corrects common spelling errors made in alphanumeric
strings as well as inconsistencies in data.  For instance, “Ahsland”
is replaced with “Ashland”, etc.  

In addition to the functions described above, Abt Associates undertook
several other steps to normalize variables.  For example, Abt Associates
converted all characters to uppercase and replaced special characters (/
\ , . _ - + =, etc) with blanks.  Abt Associates also removed spaces by
shifting characters to the left.  The cleaned datasets were used as
input files to the fuzzy matching program.  

Matching Procedure

The first step of the fuzzy matching process is to read one record from
one dataset and hold it open while reading through another dataset to
look for potential matches.  Every combination of records from two
datasets receives a matching score.  The overall score represents the
weighted average of name, address, and ZIP code scores.  A score of zero
means that no characters in common occur within the required distance
from each other in the compared records from two datasets.  A score of
1.00 means that all characters of a string in one dataset are in exactly
the same order as a string from another dataset.  As a last step, the
program selects the best match for a given facility and reports matches
with a score greater than a threshold value of 0.75.

The decision rule for identifying matched facilities is as follows:

Records with a score greater than 0.9 are automatically defined as
perfect matches, as confirmed through visual inspection.

Records with a score between 0.75 and 0.9 are designated as a possible
match.  Possible matches are pairs of facilities for which identifying
information is not sufficient to determine whether a pair is a match or
a non-match.  These pairs of facilities are subject to the manual
matching process in which Abt Associates identified matches using
additional information on the facility.  If discrepancies occurred in
the company’s name, Abt Associates completed a search on the firm’s
acquisitions, merges, and name changes.  When address information
contained coordinates in one of the matched records, Abt Associates
obtained the facility’s physical address based on the information
provided using mapping techniques.

Records with the score below 0.75 are automatically defined as
non-matches.  Visual inspection of facilities matched with a score below
0.75 showed an insignificant percentage of records that could be matched
to the D&B data.  

Abt Associates ran the comparing procedure in both directions (i.e.,
left to right and right to left).  This method allowed Abt to disregard
irrelevant (for matching purposes) information that often appears in the
beginning or end of a string.  Left-to-right comparison of some records
may not yield a high score due to the large distance between common
characters in the two strings.  Under the backwards comparison on such
records, all the common characters might be found in precisely the same
positions and the string combination would receive a high matching
score.

Abt Associates performed the string comparison for each of the three
variables used in the matching procedure: name, address, and ZIP code. 
If all three fields participated in the matching process, Abt Associates
calculated an overall score as 1/3*Name Score + 1/3*Street Address Score
+ 1/3*Zip Code Score.  The primary reason for assigning equal weights
was the lack of justification for giving a higher significance to
strings in one of the datasets over another.  Where ZIP code information
was missing, Abt Associates matched records on the basis of name and
address, assigning equal weights to each.

APPENDIX C

SPCC UNIVERSE ESTIMATION USING INDUSTRY-SPECIFIC DATA SOURCES

EPA used industry-specific data and methodologies to estimate the number
of SPCC-regulated facilities in the following industry sectors:  

Farms; 

Petroleum bulk station and terminals; fuel oil dealers; pipelines; and
petroleum refinery and related industries; 

Oil production; 

Electric utilities; 

Military installations; 

The animal fats and vegetable oils (AFVO) industry; and 

Education facilities; government establishments; information, finance
and insurance; and religious organizations.  

Farms

To accurately estimate the number of farms regulated under the SPCC
rule, data showing the size and location of oil storage tanks on all
farms in the United States would be required; however, these data do not
exist.  As an alternative approach, EPA relied on U.S. Census of
Agriculture data on farm fuel expenses and supplementary data, and
reasonable assumptions regarding the quantity of fuel represented by
farm expenditures and the quantity of purchased fuel that is stored. 
This information was used to estimate probable storage quantities on
farms to identify the SPCC-regulated universe of farms.  The
methodological steps and associated data sources are summarized in   REF
_Ref140632362  Exhibit C-1 .

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  1 

Methodological Steps Used to Estimate the Universe of SPCC-Regulated
Farms

Step Number	Step Description	Data Sources Used

1	Identify the number of farms and fuel production expense ranges for
gasoline and diesel	2002 Census of Agriculture, Farm Production
Expenses, 2002 and 1997, Gasoline, fuels, and oils.

1997 Census of Agriculture, Petroleum Products Expenses, 1997, 1992, and
1987, Gasoline, diesel, natural gas, and LP gas, fuel oil, kerosene,
motor oil, grease, etc., Table 49: Summary by Size of Farm.

2	Convert production expense ranges to quantity ranges using fuel price
data	United States Energy Information Administration, Gasoline and
Diesel Fuel Update, 2002.

3	Estimate the quantity of purchased fuel that is stored on farms	1982
U.S. Census of Agriculture, Volume 1, County Table 6.

4	Estimate the percentage of farms in each quantity range that are
regulated	Professional judgment.

5	Project estimated number of farms from 2002 to 2005	10-year average
growth rate calculated from USDA National Agricultural Statistics
Service, Number of Farms, 1996 to 2005.

6	Distribute regulated farms across oil storage capacity categories	U.S.
EPA, “Analysis of the Number of Facilities Regulated by EPA’s SPCC
Program” July 1996.

The first step started with the 2002 Census of Agriculture, which
includes data on the number of farms by the range of production expenses
on fuel.  However, the 2002 data are available only in aggregate form
for all fuel types.  In order to disaggregate farm expenditures on all
fuels in 2002 to expenditures on diesel and gasoline separately, EPA
relied on the 1997 Census of Agriculture, which provided data on
expenditures for a variety of fuel types, including diesel and gasoline.
 Using the 1997 data, EPA calculated the ratios of diesel and gasoline
expenditures to total expenditures for all farms, and then multiplies
the total expenditure on fuels in 2002 by these ratios to arrive at
estimated expenditures on diesel and gasoline in 2002.  The derivation
of these ratios is summarized in   REF _Ref140632427  Exhibit C-2 .  

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  2 

Derivation of Farm Production Expenditures on Diesel and Gasoline, 1997

Fuel Type	Number of Farms	Total Expenditures ($1,000)

Petroleum products farms	1,760,642	6,371,515

Gasoline and gasohol farms	1,366,915	1,886,600

Diesel fuel farms	1,315,397	2,845,951

Natural gas farms	71,069	432,893

LP gas, fuel oil, kerosene, motor oil, grease, etc. farms	1,276,331
1,206,070

Percentage of total expended on diesel

44.7%

Percentage of total expended on gasoline

29.6%

Source: 1997 US Census of Agriculture, Table 49, Summary by Size of
Farm.

There are two primary caveats to this methodological step.  First, EPA
assumed that the percentage of diesel and gasoline expenditures to total
fuel expenditures by farms was identical in 1997 and 2002.  To the
extent that actual expenditures on diesel and gasoline in 2002 varied
from 1997, the estimates presented may be over- or underestimates. 
Second, EPA excluded consumption of other fuels from the estimates
because price estimates that would allow conversion from expenditures to
quantities of fuel are not available for the aggregate bundle of fuels. 
This exclusion may yield actual quantity ranges of fuel use on farms
that are higher than the estimates presented in the analysis.

  

For the second step, EPA converted total estimated expenditures on
diesel and gasoline in 2002 into quantities of diesel and gasoline
purchased.  EPA divided the expenditure ranges by the average price of a
gallon of gasoline/diesel as summarized in   REF _Ref140632643  Exhibit
C-3 .  As   REF _Ref140632643  Exhibit C-3  shows, EPA estimated that in
2002, a gallon of gasoline cost $1.39 on average while a gallon of
diesel cost $1.32 on average.  

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  3 

Derivation of Average Gasoline and Diesel Price ($2002)

Region	Retail Price ($ per gallon)

	Gasoline1	Diesel Fuel2

Central Atlantic	1.41	1.40

Gulf Coast	1.32	1.28

Lower Atlantic	1.33	1.28

MidWest	1.36	1.31

New England	1.42	1.40

Rocky Mountain	1.40	1.34

West Coast	1.51	1.41

Regional Average3	1.39	1.35

US Average4	1.39	1.32

Notes: 

1 Gasoline prices represent the average of retail prices recorded weekly
by the EIA in 2002 for all grades and formulations of gasoline. 

2 Diesel prices represent the average of on-highway retail diesel prices
of No. 2 diesel fuel with a sulfur level no higher than 0.05 percent by
weight recorded weekly by the EIA in 2002. 

3 The regional average is calculated as the average of all regional
averages.

4 The US average is calculated as the average of overall US
gasoline/diesel prices in 2002. For this reason, the regional and U.S.
average prices for diesel fuel differ; however, the regional and US
average prices for gasoline do not differ.  EPA uses the US average
price in estimating the quantity of gas and diesel purchased by farms.

Source: United States Energy Information Administration, Gasoline and
Diesel Fuel Update, http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp,
accessed on June 8, 2006.

For the third step of the analysis, EPA adjusted the quantities of
gasoline and diesel purchased to represent the proportion of purchased
gasoline and diesel that is stored on farms.  The best federal source of
on-farm fuel storage data is the 1982 U.S. Census of Agriculture, which
contains specific data on fuel storage and expenditures on farms.  As
shown in   REF _Ref140632703  Exhibit C-4 , EPA estimated that, on
average, approximately one-fourth of the annual quantity of diesel and
gasoline purchased is stored on farms.  Because data on the type of
storage – aboveground or underground – is not available, EPA assumed
that all gasoline and diesel storage on farms is aboveground. Exhibit
C-  SEQ Exhibit \* ARABIC \s 1  4 

Derivation of Ratio of Gasoline and Diesel Stored to Purchased Using
1982 On-Farm Fuel Storage Census Data

State	Gasoline	Diesel	Total Gallons (1,000)	Gasoline	Diesel

	Number of Farms	Gallons Stored (1,000)	Expenditure on Gas ($1,000)
Number of Farms	Gallons Stored (1,000)	Expenditure on Diesel ($1,000)

Gallons Purchased1	% Stored	Gallons Purchased2	% Stored

Alabama	11,075	5,295	35,338	15,422	8,790	38,495	14,085	28,079	19%	33,423
26%

Alaska	308	173	517	175	130	275	303	Data Not Available

Arizona	2,645	2,782	20,422	2,099	4,262	24,272	7,044	16,227	17%	21,074
20%

Arkansas	13,155	7,575	55,077	16,527	20,729	91,981	28,304	43,763	17%
79,862	26%

California	36,277	26,582	166,455	27,012	32,402	184,669	58,984	132,262
20%	160,338	20%

Colorado	16,301	10,370	53,911	11,725	9,937	49,614	20,307	42,837	24%
43,077	23%

Connecticut	1,438	960	5,391	909	558	2,599	1,518	4,284	22%	2,257	25%

Delaware	1,821	1,048	5,192	1,255	949	5,019	1,997	4,125	25%	4,358	22%

Florida	7,361	6,189	51,850	10,867	11,256	62,456	17,445	41,199	15%	54,227
21%

Georgia	14,779	8,214	52,877	20,224	14,479	68,994	22,693	42,015	20%
59,904	24%

Hawaii	682	621	7,778	643	733	9,465	1,354	Data Not Available

Idaho	14,930	10,194	56,310	11,675	10,324	50,244	20,518	44,743	23%	43,624
24%

Illinois	72,184	40,919	178,238	55,038	41,969	206,365	82,888	141,625	29%
179,175	23%

Indiana	50,537	23,007	99,356	34,722	21,914	108,389	44,921	78,947	29%
94,108	23%

Iowa	84,877	41,709	186,833	67,518	41,968	203,866	83,677	148,454	28%
177,005	24%

Kansas	47,457	24,864	127,211	37,183	27,258	155,737	52,122	101,080	25%
135,218	20%

Kentucky	30,292	11,857	64,995	29,592	12,152	50,739	24,009	51,644	23%
44,054	28%

Louisiana	9,101	5,004	34,836	12,273	13,903	67,906	18,907	27,680	18%
58,959	24%

Maine	2,488	1,541	9,200	1,956	1,048	5,401	2,589	7,310	21%	4,689	22%

Maryland	8,726	4,183	18,858	6,038	3,455	16,316	7,638	14,984	28%	14,166
24%

Massachusetts	1,672	970	6,750	1,180	511	2,465	1,481	5,363	18%	2,140	24%

Michigan	38,825	19,897	70,711	25,874	16,856	70,978	36,753	56,186	35%
61,626	27%

Minnesota	70,149	34,163	154,989	53,362	34,409	158,621	68,572	123,152	28%
137,722	25%

Mississippi	10,326	5,357	40,063	15,797	17,057	73,659	22,414	31,833	17%
63,954	27%

Missouri	61,850	26,786	118,723	36,730	21,438	101,735	48,224	94,335	28%
88,331	24%

Montana	16,324	12,278	65,881	12,444	12,101	54,491	24,379	52,348	23%
47,311	26%

Nebraska	42,953	24,415	130,353	36,342	33,328	165,835	57,743	103,576	24%
143,985	23%

Nevada	1,565	1,479	7,728	1,144	1,256	5,194	2,735	6,141	24%	4,510	28%

New Hampshire	939	478	2,542	669	358	1,434	836	2,020	24%	1,245	29%

New Jersey	4,255	2,414	12,762	2,143	1,414	7,028	3,828	10,140	24%	6,102
23%

New Mexico	4,452	2,933	20,045	2,851	2,247	13,515	5,180	15,927	18%	11,734
19%

New York	24,965	11,508	62,319	18,340	9,187	48,902	20,695	49,518	23%
42,459	22%

North Carolina	27,645	14,102	74,441	27,645	14,755	68,889	28,857	59,150
24%	59,812	25%

North Dakota	29,817	20,441	100,713	26,483	25,933	120,501	46,374	80,025
26%	104,624	25%

Ohio	52,253	21,290	87,968	39,488	19,792	92,042	41,082	69,898	30%	79,915
25%

Oklahoma	21,423	10,003	65,442	24,882	15,989	76,415	25,992	51,999	19%
66,347	24%

Oregon	17,894	11,226	44,142	11,892	8,816	33,086	20,042	35,074	32%	28,727
31%

Pennsylvania	32,577	14,380	61,662	22,558	10,426	41,563	24,806	48,996	29%
36,087	29%

Rhode Island	208	148	782	155	81	501	229	621	24%	435	19%

South Carolina	8,603	4,532	25,745	9,086	6,010	30,081	10,542	20,457	22%
26,118	23%

South Dakota	28,166	15,732	91,513	22,227	15,462	89,470	31,194	72,715	22%
77,682	20%

Tennessee	23,750	9,234	46,827	26,526	11,951	46,748	21,185	37,208	25%
40,589	29%

Texas	55,381	28,076	185,907	55,924	44,259	233,269	72,335	147,718	19%
202,534	22%

Utah	4,924	2,975	17,809	4,512	2,596	12,449	5,571	14,151	21%	10,809	24%

Vermont	2,787	1,317	7,358	2,681	1,129	6,131	2,446	5,847	23%	5,323	21%

Virginia	20,196	9,158	42,320	17,192	7,272	31,091	16,430	33,627	27%
26,995	27%

Washington	18,898	12,788	56,718	13,586	12,637	54,159	25,425	45,067	28%
47,023	27%

West Virginia	5,237	2,092	8,278	4,167	1,239	4,170	3,331	6,578	32%	3,621
34%

Wisconsin	62,904	25,946	121,860	41,808	18,777	89,513	44,723	96,828	27%
77,719	24%

Wyoming	6,091	4,649	24,139	4,322	3,104	13,356	7,753	19,180	24%	11,596
27%

U.S. Average	24%

24%

1 	Gallons of gasoline purchased in 1982 are estimated by dividing
expenditures on gasoline by farms in this year by the average gasoline
price in the U.S. ($1.26 per gallon) in 1982, as reported in monthly
unleaded regular gas price data compiled by the EIA. 

2 	Gallons of diesel purchased in 1982 are estimated by dividing
expenditures on diesel by farms in this year by the average diesel price
in the U.S. ($1.15 per gallon) in 1982, as reported in monthly diesel
fuel price data compiled by the EIA.

In the fourth step of the analysis, professional judgment was used to
assign the percentage of farms regulated within the each gasoline and
diesel storage quantity range under low-end, medium-end, and high-end
assumptions.  These assumptions are presented in   REF _Ref140632765 \h 
Exhibit C-5  for each gasoline and diesel storage quantity.

In the fifth step, EPA projected the number of SPCC-regulated farms
estimated from 2002 to 2005 using an estimated annual rate of growth of
-0.44 percent, calculated from the change in the number of farms from
1996 to 2005 as recorded in the U.S. Census of Agriculture for these
years. 

  REF _Ref140632765  Exhibit C-5  presents the results of the analysis
of SPCC-regulated farms.  As shown, the analysis suggests that the SPCC
rule regulates approximately 151,000 farms (the medium estimate).  The
low- and high-end assumptions yielded approximately 148,000 and 154,000
SPCC-regulated farms, respectively.  

Because the derived capacity ranges estimated for each
farm-fuel-expenditure range are not the same as the four capacity
categories used in the analysis, in the sixth step EPA distributed the
SPCC-regulated farms across the capacity categories using the same
distribution as that used in EPA’s 1995 survey.    REF _Ref140632943 
Exhibit C-6  contains the results of the analysis distributed across oil
storage capacity categories.

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  5 

Derivation of the Number of SPCC-Regulated Farms in 20051 

Production Expenditure Ranges

(all oils and LP gas)	Equivalent diesel and gasoline quantity purchased2
(gallons)	Equivalent diesel and gasoline storage capacity (gallons)3
Total number of Farms4	SPCC-Regulated Farms Estimates

High	Medium	Low

Fraction	Number	Fraction	Number	Fraction	Number

$1 to $1,000	< 600	< 100	1,180,194	0%	0	0%	0	0%	0

$1,000 to $5,000	600 to 2,800	100 to 700	535,635	0%	0	0%	0	0%	0

$5000 to $10,000	2,800 to 5,500	700 to 1,300	137,802	7%	9,646	5%	6,890
3%	4,134

$10,000 to $25,000	5,500 to 13,900	1,300 to 3,300	101,046	100%	101,046
100%	101,046	100%	101,046

$25,000 to $50,000	13,900 to 27,600	3,300 to 6,700	28,667	100%	28,667
100%	28,667	100%	28,667

> $50,000	> 27,600	> 6,700	14,193	100%	14,193	100%	14,193	100%	14,193

  Total	1,997,538	8%	153,553	8%	150,797	7%	148,041

Notes: 

1 	The estimate assumes that all oil storage on farms is in aboveground
storage tanks.  Calculated values are rounded to three significant
figures.  Numbers may not add to totals because of rounding.

2 	In 2002, expenditures on gasoline, diesel, and other fuels were not
separately available.  To calculate the diesel (gasoline) expenditure in
2002, EPA multiplied the total expenditure on fuel oils in 2002 by the
ratio of diesel (gasoline) expenditure with respect to the total
expenditure on fuel oils from the 1997 Census data.  To arrive at the
quantity of diesel (gasoline) purchased, EPA divided the expenditure on
diesel (gasoline) by the average diesel (gasoline) price in 2002
available from the Gasoline and Fuel Update, Energy Information
Administration (www.eia.doe.gov).

3 	To estimate the storage capacity, EPA multiplied the diesel
(gasoline) expenditure in 2002 by the ratio of expenditure on diesel
(gasoline) with respect to storage from the 1982 Census of Agriculture,
which collected information on fuel storage.  Information on fuel
storage was not collected after 1982.  

4 	These numbers reflect the total number of farms for which expense
data were reported in the 2002 Census of Agriculture.  The total number
of farms in 2002 was 2,128,982, of which production data were available
for 2,024,139.

			

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  6 

SPCC Universe Estimates for Farms (Medium Estimate)

Industry Sector	NAICS Code	Category I	Category II	Category III	Category
IV	Total

Farms	111112	143,152	6,970	562	113	150,797

Petroleum Bulk Station and Terminals, Fuel Oil Dealers, Pipelines, and
Petroleum Refinery and Related Industries

Similar to EPA’s approach in its 1991 and 1995 studies, the estimates
for petroleum bulk station and terminals, fuel oil dealers, pipelines,
and petroleum refinery and related industries are based on the
assumption that all such facilities are regulated by the SPCC rule.  EPA
used data on the total number of facilities for petroleum bulk station
and terminals, pipelines, and petroleum refinery and related industries
from the 2002 U.S. Economic Census, and projected these data to 2005
using industry-specific growth rates.  As a result, EPA estimated that
approximately 6,600 petroleum bulk stations and terminals, 4,600 fuel
oil dealers, 700 pipelines, and 2,000 petroleum refining and related
industries are regulated by the SPCC rule in the United States.  

Because these data do not include information on the oil-storage
capacity at each facility, EPA used the distribution of these facilities
from EPA’s 1995 to allocate facilities across the four capacity
categories.  Further, EPA assumed that the size distribution would be
constant over the ten-year period of analysis, which may or may not
adequately represent actual trends during this period.    REF
_Ref140633015  Exhibit C-7  contains the results of the analysis
distributed across oil storage capacity categories.

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  7 

SPCC Universe Estimates for Petroleum Refinery and Related Industries,
Pipelines, Petroleum Bulk Stations and Terminals, and Fuel Oil Dealers

Industry Sector	NAICS

Code	Category I	Category II	Category III	Category IV	Total

Petroleum Refinery and Related Industries	324	85	212	1,270	424	1,990

Pipelines	4861, 48691	704	0	0	0	704

Petroleum Bulk Stations and Terminals	4247	564	846	4,370	799	6,580

Fuel Oil Dealers	45431	318	1,700	2,340	212	4,560

Total	1,671	2,758	7,980	1,435	13,834

Oil and Gas Production

EPA assumed all oil production facilities are regulated under the SPCC
rule.  Certain gas production facilities may also be regulated, given
that some gas wells have tanks for storing condensate oil generated
during the gas-production process.  EPA used EIA data to estimate the
total number of oil-production wells as well as gas wells that produce
condensate oil.  All active wells that were producing in 2004 are
considered in the analysis.  The EIA database contains historical data
on oil and gas wells, including marginal wells, compiled from government
and commercial sources.  Key data fields included in the database are
state, production year, number of wells, and annual oil and/or gas
production.  EIA provides data on oil and oil-condensate produced at oil
and gas production wells according to various production-rate classes. 
Gas wells that do not produce oil condensate are not included.

To convert the number of wells that produce oil and oil condensate to
the total number of SPCC-regulated production facilities, EPA assumed
four wells per facility based on personal communication with industry
experts.  Under this assumption, EPA estimated that approximately
166,000 oil production facilities are SPCC-regulated.

To determine the distribution of oil production facilities across the
four capacity categories, EPA used the distribution of these facilities
derived in EPA’s 1995 study.  By taking this approach, EPA assumed
that the distribution of oil production facilities across the four oil
storage capacity categories has not changed over the last 10 years. 
Therefore, the distribution of estimated SPCC-regulated oil production
facilities across capacity categories presented in this analysis may
over- or underestimate the actual distribution.    REF _Ref140633057 
Exhibit C-8  contains the estimated number of oil production facilities
distributed across oil storage capacity categories.

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  8 

SPCC Universe Estimates for Oil Production

Industry Sector	NAICS

Code	Category I	Category II	Category III	Category IV	Total

Oil Production	211111	21,200	114,000	30,100	295	166,000

Electric Utilities

EPA calculated the number of SPCC-regulated electric utility facilities
as the total number of power plants and substations in the United States
using data collected by the EIA.  

To estimate the number of SPCC-regulated power plants, EPA used
information from Form EIA-906, which reports the oil stock at each power
plant that has a generation capacity greater than 1 megawatt (MW), and
that is connected to a local or regional electric power grid and can
draw power from the grid or deliver power to the grid.  Because data at
the plant level is confidential, EIA provided summary statistics on the
total number of plants in each capacity category, using information on
oil stocks at each plant.  EPA assumed that the information on oil stock
held is a reasonable proxy for plant-specific capacity.  While this
estimate does not include plants that generate less than 1 MW of
electricity, EPA assumed that the majority of plants with less than 1 MW
of generation capacity store oil in volumes that are below the SPCC
threshold.

EPA estimated the number of substations using data reported to the
Federal Energy Regulatory Commission (FERC) on Form No. 1. 
One-hundred-and-seventy-six major regulated utilities must file FERC
Form No. 1 and are required to provide information on their substations
and electrical equipment.  EPA estimated the number of substations owned
by major utilities as the number of substations with unique names listed
by each major utility on their FERC Form No. 1.  A national estimate for
the number of substations was obtained by extrapolating from these data
using the ratio of the megawatt hours sold by owners and operators of
major regulated facilities that filed Form No. 1 to the estimated total
retail megawatt hours of electricity sold nationwide according to the
EIA’s March 2005 Electric Power Monthly.

EPA distributed substations across the four capacity categories based on
information contained within an EPA study on the applicability of the
SPCC rule to the electric utility industry (EPA, 1996b).  This analysis
estimated the percentage of substations storing oil in each size group
and included information from EPA Pollution Prevention Program.  Using
this approach, EPA estimated that approximately 52,100 electric utility
facilities (1,700 power plants and 50,400 substations) are
SPCC-regulated.    REF _Ref140633099  \* MERGEFORMAT  Exhibit C-9 
presents the estimated number of electric utility plants and substations
by oil storage capacity category.  

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  9 

Estimated Number of Electric Utility Plants and Substations

Facility Type	Category I	Category II	Category III	Category IV	Total

Power Plants	243	368	777	309	1,700

Substations	19,200	19,200	12,100	0	50,400

Total	19,400	19,500	12,900	309	52,100

Military Installations

Military installations include Army, Navy, Air Force, National Guard,
Marine Corps, and Coast Guard bases, stations, schools, and commands,
and associated infrastructure such as medical centers.  Accurately
estimating the number of SPCC-regulated military installations is
difficult, because data on oil storage within these facilities are not
readily available or do not allow for division of facilities into
oil-storage-capacity tiers.  For this reason, EPA used available data on
current military installations in the United States and employed
simplifying assumptions to identify potentially regulated military
facilities.

A recent report published by the Department of Defense on base closure
and realignment contains a list of current military installations by
economic region in the United States (DOD, 2005).  According to the
report, there are 711 currently active military installations in the
United States.  As in EPA’s 1991 study, the Agency assumed that all of
these military installations store enough oil to reach the SPCC
threshold.  Then, in the absence of oil storage capacity information for
each facility, EPA used the distribution from EPA’s 1995 study to
allocate military facilities across the four capacity tiers.  Using this
distribution yielded estimates of military installations by capacity
tier as summarized in   REF _Ref140633131  Exhibit C-10 .  EPA estimated
148 regulated military facilities in Category I; 148 regulated military
facilities in Category II; 296 regulated military facilities in Category
III; and 118 regulated military facilities in Category IV.  

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  10 

Derivation of Number of Regulated Military Facilities

Oil Storage Capacity Category	1995 Survey Estimates	Percentage of Total
Facilities (1995)	Number of Military Installations 

(2005)1 

I	239	21%	148

II	239	21%	148

III	477	42%	296

IV	190	17%	118

Total	1145	100%	711

1 	The number of military facilities in 2005 was estimated by
multiplying total military facilities in 1995 by the percentage of total
facilities in each capacity tier as represented by the 1995 survey.

Animal Fats and Vegetable Oil

Previous EPA estimates focused on petroleum and petroleum-related oil,
even though facilities handling or storing non-petroleum oil are also
subject to SPCC rule regulations.  Non-petroleum oil includes, but is
not limited to, animal fats, oils, and greases; fish and marine mammal
oils; and oils of vegetable origin, including oils from seeds, nuts,
fruits, and kernels.  These types of substances are referred to
collectively as “animal fats and vegetable oils” (AFVO) within SPCC
regulations.  Animal fats and vegetable oils are used both as primary
edible products and as inputs to production in the manufacture of other
edible and inedible products.    SEQ CHAPTER \h \r 1 Examples of
inedible use include soap, paint and varnish, animal feed, resins and
plastics, fuel, drilling fluids, lubricants, and fatty acids.  

Animal fats and vegetable oils are processed to varying degrees
depending on the end use of the product, and chemical composition
changes at each step in processing.  Chemical composition can also be
changed by storage, heating, or reactions in the environment. 
Processing steps in vegetable oil facilities are generally independent
operations that are not connected by continuous flow.  Between each
processing step there may be one or more storage tanks.  Many crude
vegetable oil storage tanks, which are usually constructed of welded
carbon steel, have a capacity of 1 million pounds (approximately 140,000
gallons); these tanks may be located in the open or enclosed in a
structure.  Storage tanks for finished fats and oils are generally made
of iron, stainless steel, or aluminum, and typically hold between 75 and
200 tons (about 21,000 to 56,000 gallons) of product.

While animal fats and vegetable oils are consumed widely in the United
States for edible and inedible uses, developing estimates of the
quantity stored or handled by industry is difficult due to the wide
range of industries that use AFVO as inputs to production, the multiple
processing steps for these oils, and the lack of a centralized database
with information on AFVO storage for each industry.  In addition, the
state databases identified for this analysis contain information only on
petroleum and petroleum-related oils.  For this reason, EPA used
available data on likely AFVO-related industries, and plausible
assumptions, to estimate the number of AFVO facilities that are
SPCC-regulated.

Specifically, EPA started with data on the number of manufacturing
establishments from the 2005 U.S. Census of Manufacturing.  Four
possible types of AFVO facilities were considered:  (1) industries that
produce AFVO; (2) industries that use AFVO as a primary input; (3)
industries that use AFVO in moderate amounts; and (4) industries that
use AFVO as a minor component of their input.  EPA assumed that all
facilities that produce AFVO (group 1) are SPCC-regulated.  Then, low,
medium, and high estimates were developed using professional judgment
for industries in the remaining three groups regarding the percentage of
each industry group assumed to be regulated by the SPCC rule.  EPA also
identified a category of “other” facility types that may produce or
use AFVO.  For these facilities, specific information on the number of
regulated facilities was available and was used instead of the assumed
percentages.  These assumptions are summarized in   REF _Ref140633168 
Exhibit C-11 .  

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  11 

Derivation of Potentially Regulated AFVO Facilities

Facility Type	Description of Facility Type	Assumed Percentage of Total
Facilities Regulated1

Low	Medium	High

AFVO producer	Comprises facilities that are engaged primarily in the
production and/or processing of AFVO.	100%

User of AFVO as major input	AFVO is a major input in production of other
goods; however, not all facilities may use AFVO.	50%	70%	90%

User of AFVO as moderate input	Several facilities likely use large
quantities of AFVO; however, many may not, depending on the specific
products the facility manufactures.	20%	50%	80%

User of AFVO as minor input	AFVO use by facilities is limited to
alternative or unconventional products.  For example, industries such as
pesticide, paint and coating, printing ink, and soap and other detergent
manufacturing use vegetable oil as an alternative to their conventional
inputs, and are included in this category.  Also included in this
category are facilities that may have minor AFVO storage capacity, or
industries that use significant quantities of petroleum oils but may
also use AFVO.	1%	5%	10%

Other2	Specific information on the number of regulated facilities is
available for the industry sector and is used instead of the assumed
percentages.	N/A	N/A	N/A

 

1 	In the absence of publicly available data that would allow an
accurate estimate of storage capacity at facilities that produce or use
AFVO, EPA developed a range of percentages for each facility type
identified above to reasonably bound the universe of potentially
regulated facilities under the SPCC rule.  Given that these percentages
are based on assumptions regarding the relative production or use of
AFVO within each facility type, they are subject to a considerable
degree of uncertainty.

2 	EPA identified a category of “other” facility types that may
produce or use AFVO.  For these facilities, specific information on the
number of regulated facilities was available and was used instead of the
assumed percentages.  

  REF _Ref140633202  Exhibit C-12  presents the results of applying
these assumed percentages to the total number of relevant manufacturing
establishments based on U.S. Census of Manufacturing data.  As shown,
EPA estimated that between 3,000 and 12,000 manufacturing facilities
that produce, use, or store AFVO might be SPCC-regulated, or on average
approximately 7,600 manufacturing facilities.  

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  12 

Analysis of Potentially Regulated AFVO Facilities under the SPCC Rule

NAICS Code	Industry Title	Total Number of Facilities1	Production/Level
of Use of AFVO2	Assumed Percentage of Total Facilities Regulated3	SPCC
Universe Estimate

Low	Medium	High	Low	Medium	High

311111	Dog and Cat Food Manufacturing	188	      Moderate	20%	50%	80%	38
94	150

311119	Other Animal Food Manufacturing	1,514	Moderate	20%	50%	80%	303
757	1,211

311221	Wet Corn Milling4	58	Other	Other	Other	Other	25	25	25

311222	Soybean Processing5	93	Other	Other	Other	Other	9	9	9

311223	Other Oilseed Processing	54	Producer	100%	100%	100%	54	54	54

311225	Fats and Oils Refining and Blending	132	Producer	100%	100%	100%
132	132	132

31123	Breakfast Cereal Manufacturing	71	Moderate	20%	50%	80%	14	36	57

31132	Chocolate and Confectionery Manufacturing from Cacao Beans	164
Moderate	20%	50%	80%	33	82	131

31133	Confectionery Manufacturing from Purchased Chocolate	861	Moderate
20%	50%	80%	172	431	689

31134	Nonchocolate Confectionery Manufacturing	625	Moderate	20%	50%	80%
125	313	500

311412	Frozen Specialty Food Manufacturing	412	Moderate	20%	50%	80%	82
206	330

311423	Dried and Dehydrated Food Manufacturing	156	Moderate	20%	50%	80%
31	78	125

311512	Creamery Butter Manufacturing	34	Producer	100%	100%	100%	34	34	34

311513	Cheese Manufacturing	525	Not Used	0%	0%	0%	0	0	0

311514	Dry, Condensed, and Evaporated Dairy Product Manufacturing	215
Not Used	0%	0%	0%	0	0	0

31152	Ice Cream and Frozen Dessert Manufacturing	451	Moderate	20%	50%
80%	90	226	361

311611	Animal (except Poultry) Slaughtering	1,393	Not Used	0%	0%	0%	0	0
0

311612	Meat Processed from Carcasses	1,297	Moderate	20%	50%	80%	259	649
1,038

311613	Rendering and Meat Byproduct Processing	240	Producer	100%	100%
100%	240	240	240

311615	Poultry Processing	472	Moderate	20%	50%	80%	94	236	378

311711	Seafood Canning	166	Moderate	20%	50%	80%	33	83	133

311712	Fresh and Frozen Seafood Processing	678	Not Used	0%	0%	0%	0	0	0

311812	Commercial Bakeries	2,766	Moderate	20%	50%	80%	553	1,383	2,213

311813	Frozen Cakes, Pies, and Other Pastries Manufacturing	238	Moderate
20%	50%	80%	48	119	190

311821	Cookie and Cracker Manufacturing	380	Moderate	20%	50%	80%	76	190
304

311823	Dry Pasta Manufacturing	266	Moderate	20%	50%	80%	53	133	213

31183	Tortilla Manufacturing	235	Moderate	20%	50%	80%	47	118	188

31191	Snack Food Manufacturing	565	Moderate	20%	50%	80%	113	283	452

311911	Roasted Nuts and Peanut Butter Manufacturing	146	Moderate	20%	50%
80%	29	73	117

311919	Other Snack Food Manufacturing	419	Moderate	20%	50%	80%	84	210
335

311941	Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing	328
Major	50%	70%	90%	164	230	295

311991	Perishable Prepared Food Manufacturing	445	Moderate	20%	50%	80%
89	223	356

311999	All Other Miscellaneous Food Manufacturing	856	Moderate	20%	50%
80%	171	428	685

32532	Pesticide and Other Agricultural Chemical Manufacturing	260	Minor 
1%	5%	10%	3	13	26

32551	Paint and Coating Manufacturing	1,497	Minor 	1%	5%	10%	15	75	150

325611	Soap and Other Detergent Manufacturing	807	Minor 	1%	5%	10%	8	40
81

32591	Printing Ink Manufacturing6	567	Other	Other	Other	Other	50	100	150

49311	General Warehousing and Storage	3,921	Minor 	1%	5%	10%	39	196	392

49312	Refrigerated Warehousing and Storage	877	Minor 	1%	5%	10%	9	44	88

49313	Farm Product Warehousing and Storage	486	Minor 	1%	5%	10%	5	24	49

49319	Other Warehousing and Storage	1,213	Minor 	1%	5%	10%	12	61	121

4931901	Household goods warehousing & storage	317	Not Used	0%	0%	0%	0	0
0

4931902	Specialized goods warehousing & storage	896	Not Used	0%	0%	0%	0
0	0

Total	27,284

	3,337	7,623	12,000

1 	Data on the number of facilities by NAICS code are from the 2002
Economic Census of the United States. 

2 	The selected NAICS codes include facilities that may produce AFVO or
use AFVO as a major, moderate, or minor input to production of other
goods.  The assigned type of facility indicates whether the facilities
associated with a particular NAICS code may produce AFVO as their
primary good or, for facilities that may use AFVO as an input to
production, indicates the assumed relative use of AFVO as an input in
these facilities.  EPA also identified a category of “other”
facility types that may produce or use AFVO.  For these facilities,
specific information on the number of regulated facilities is available
and is used instead of the assumed percentages.  

3	For an explanation of the assumed percentage of facilities that are
regulated for each NAICS code under the low, medium, and high estimates,
see   REF _Ref140633168  Exhibit C-11 .  

4 	The Corn Refiners Association provided specific information on this
NAICS code, identifying 25 corn-refining plants that are owned by its
members.  According to the Association, these 25 plants represent the
majority of the industry.

5 	The 2002 Economic Census of the United States data for NAICS code
311221 identifies nine soybean oil facilities.  While this number
provides a specific estimate of soybean oil facilities, EPA notes it may
be an underestimate if some soybean processing facilities are included
under other NAICS codes but also produce soybean oil.  

6 	According to www.soyink.com, there are approximately 100 U.S. ink
manufacturers that produce at least one soy ink product.  In addition,
77 U.S. companies manufacture SoySeal Certified ink.

This methodology yielded estimates of the number of facilities that may
be regulated based only on their anticipated storage of AFVO.  Some of
these facilities may be regulated because they also store petroleum
oils.  Therefore, some double counting of the facilities may be present.
 In the absence of more specific data on this industry, this source of
error cannot be measured or addressed.  

Given the lack of information on the oil storage capacity at each
facility, the distribution of facilities across different size
categories was assumed the same as that for Food Manufacturing
Facilities (NAICS 311) based on their petroleum and related oil
capacity.    REF _Ref140633242  Exhibit C-13  presents the estimates of
AFVO facilities (medium estimate) distributed across oil storage
capacity categories.

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  13 

Estimated Number of Animal Fats and Vegetable Oil Facilities

Manufacturing facilities using and storing AFVO	Category I	Category II
Category III	Category IV	Total

	2,610	3,430	1,580	0	7,620

Education, Religious Organizations, and Government Establishments 

The 1997 U.S. Economic Census data used to extrapolate the number of
facilities from state databases to the entire universe of SPCC-regulated
facilities do not include religious organizations, educational
facilities, or government-owned establishments.  Therefore,
extrapolation using state databases was not possible for these
facilities.  For this reason, EPA estimated the number of storage tanks
in commercial buildings using the 1995 and the 2003 Commercial Buildings
Energy Consumption Survey (CBECS).  The CBECS is a national sample
survey that collects energy-related building characteristics data as
well as energy consumption and expenditures data for commercial
buildings in the United States.  It includes information on the
principal business activity of the given building and information on the
ownership of the building by government or private institutions.  Until
1995, the CBECS also collected information on the oil storage capacity
of tanks at these buildings. 

Because data on storage tank capacity have not been collected since the
1995 survey, EPA estimated the total tank capacity at each building from
the 1995 survey data and projected it to 2003 using the growth in the
square footage of buildings during this time period as a proxy for the
growth in the total storage capacity.  Using this approach, EPA
estimated a 1.03 percent annual growth rate in total storage capacity at
educational buildings, a 1.04 percent annual growth rate in total
storage capacity at religious buildings, and a 1.02 percent annual
growth rate at government facility buildings from 1995 through 2003. 
These annual growth rates correspond to overall adjustment factors of 28
percent for educational buildings, 34 percent for religious buildings,
and 16 and 72 percent for government buildings over the entire period. 
To arrive at the estimate for 2005, EPA extrapolated the number of
buildings assuming this same rate of growth for each sector.    REF
_Ref140633282  Exhibit C-14  summarizes the derivation of the adjustment
factor for each industry considered in this section.

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  14 

Derivation of Adjustment Factor for Education, Religious, and Government
Establishments

Industry	1995 Data	2003 Data	Estimated Adjustment Factor1

	Number of Buildings	Total Square Footage	Average Square Feet	Number of
Buildings	Total Square Footage	Average Square Feet

	Education	308,980	7,740,293,721	25,051	386,000	9,874,000,000	25,600	28%

Religion	269,380	2,792,077,403	10,365	370,000	3,754,000,000	10,100	34%

Government 	704,931	10,478,076,064	14,864	824,000	12,208,000,000	14,800
16%

Other 2	67,332	1,003,620,004	14,906	79,000	1,738,000,000	21,900	72%

1 	Oil storage capacity data were collected for buildings in these
industries in 1995 but not in 2003.  For this reason, the adjustment
factor is calculated as the percentage increase in total square footage
for buildings in each industry category from 1995 to 2003, and is used
to adjust the 1995 oil storage capacity data to 2003 by assuming the
factor is a proxy for growth in total oil storage capacity within these
buildings.

2  	Federal and state government buildings that are contained within the
“other” category in the 1995 and 2003 CBECS.

Sources:

1995 data are from the U.S. Energy Information Administration CBECS,
available at
http://www.eia.doe.gov/emeu/cbecs/detailed_tables_1995.html. 

2003 data are from the 2003 CBECS, available at
http://www.eia.doe.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/detaile
d_tables_2003.html.

Finally, given that the CBECS does not distinguish between aboveground
and underground storage, EPA assumed that buildings in metropolitan
areas have underground storage due to scarcity of aboveground storage,
and that buildings in non-metropolitan areas have aboveground storage. 
EPA assumed that all the underground storage tanks comply with UST
requirements and are exempt from SPCC requirements.    REF _Ref140633309
 Exhibit C-15  summarizes the results of the analysis.  As shown, EPA
estimated that approximately 6,900 educational facilities, 1,400
religious organization, and 550 government facilities are
SPCC-regulated.

  REF _Ref140633361  Exhibit C-16  summarizes results across the
oil-storage-capacity categories used in the analysis.  The presence of
tank capacity data in the 1995 CBECS allows for direct distribution of
facilities into the capacity categories.  However, to the extent that
estimated 2005 tank capacities deviate from the actual capacities, the
estimated distribution may over- or underestimate the actual
distribution of facilities across the capacity categories.  Exhibit C- 
SEQ Exhibit \* ARABIC \s 1  15 

Estimation of the Number of Regulated Educational, Religious, and
Government Facilities in 20051

Industry	1995 Data	Adjustment Factor2	2003 Estimate	Industry Growth Rate
(%)3	2005 Estimate	Total Regulated Facilities (2005)

	Category I	Category II

Category I	Category II

Category I	Category II

	Education	1,380	3,719	28%	1,761	4,748	1.03	1,872	5,047	6,900

Religion	978	0	34%	1,309	0	1.04	1,407	0	1,400

Government3	171	0	16%	199	0	1.02	552	0	550

Other (Labs)4	193	0	72%	333	0

Total	2,721	3,719

3,602	4,748

3,832	5,047	8,880

1	These industries do not contain facilities with oil storage capacity
greater than 42,000 gallons; for this reason, these capacity tiers are
not included in this table.

2	The adjustment factor was calculated as the annual increase in total
square footage of buildings in each industry.  EPA used these factors as
the industry growth rate to forecast 2003 results to 2005. 

3	EPA uses the calculated adjustment factor as the industry growth rate.
 The industry growth rate for government is calculated using office
building data only.

4	Facilities owned by federal and state governments are contained within
the "office" and "laboratory" categories in the 1995 survey.

5	The 1995 survey includes government laboratories as a separate data
category; the 2003 survey does not.  For this reason, the analysis
subsumes government-owned laboratories into the "other" category in
2003.

Source: 1995 data are from the U.S. Energy Information Administration
CBECS, available at
http://www.eia.doe.gov/emeu/cbecs/detailed_tables_1995.html.

 

	

Exhibit C-  SEQ Exhibit \* ARABIC \s 1  16 

Estimated Number of Education, Religious Organizations, and Government
Establishments

Industry	Category I	Category II	Category III	Category IV	Total

Education	1,872	5,047	0	0	6,920

Religious Organizations	1,407	0	0	0	1,407

Government	552	0	0	0	552

Total	3,381	5,047	0	0	8,878

APPENDIX D

PROJECTING SPCC UNIVERSE ESTIMATES USING DERIVED INDUSTRY GROWTH RATES

Growth Rates for Existing Facilities in All Industry Categories
Excluding Farms and Oil Production 

To estimate industry-specific growth rates for all SPCC-related industry
categories except farms and oil production, EPA used 1992, 1997, and
2002 U.S. Economic Census data on the number of establishments in each
industry.  One issue with this approach is the transition in the Census
data, around 1997, from the U.S. Standard Industrial Classification
(SIC) system to the North American Industry Classification System
(NAICS) to provide a more accurate representation of the changing
economy.  This transition resulted in a reshaping of certain industry
sectors.  As a result of the transformation of the industry
classification system, the Census reports the data on the number of
establishments as follows:

Year 1992 - SIC;

Year 1997 - SIC and NAICS; and 

Year 2002 - NAICS.

Because the data for 1992 and 2002 are reported in different
classification systems, EPA identified corresponding NAICS sectors for
SIC industry sectors in 1992 using a concordance developed by the U.S.
Census Bureau that links sectors in the two classification systems.  The
major drawback of sector mapping is that some NAICS sectors comprise one
or more SIC sectors, and some SIC sectors partially correspond to NAICS
sectors.  While not all sectors align fully between NAICS and SIC, some
of the key SPCC industry categories (e.g., oil production and petroleum
refining) correspond precisely.  To reconcile differences introduced by
two industry classification systems, EPA developed a methodology to
allow use of the data on the number of establishments reported in SIC
for 1992 and NAICS for 2002:

NAICS and SIC sectors are linked to the corresponding SPCC-regulated
industry categories used in the analysis.

Data are obtained on the number of establishments for SPCC industry
categories for three years (1992, 1997 and 2002).

For 1997, a ratio is estimated of the number of establishments reported
in the NAICS and SIC classification systems.  For each SPCC industry
category, a ratio is then calculated of the number of establishments
reported in NAICS to the number of establishments reported in SIC.

The ratio estimated in the previous step is used to translate the number
of establishments reported for 1992 from SIC to NAICS.

Industry-specific growth rates are estimated based on the change in the
number of establishments reported in NAICS from 1992 to 2002.

The use of an extended time period to estimate industry-specific growth
rates attempted to account for diverse economic conditions under which
SPCC-regulated industries operate.  Economic indicators, including gross
domestic product (GDP), suggest a noticeable decline in industrial
productivity beginning in 1998 that contributed to a recession period in
the early 2000s.  Therefore, the use of 1997 and 2002 Economic Census
data to forecast the annual change in the total number of SPCC
facilities beyond 2002 would not always be appropriate.  The purpose of
integrating Economic Census data for 1992 was to capture changes in
industry growth under the more favorable economic conditions that
existed between the early 1990s and 1997.

Growth Rates for Existing Agricultural Facilities

To estimate annual growth rates for agricultural establishments, EPA
used data reported by the USDA National Agricultural Statistics Service
on the number of farms in the United States over the past 10 years (1996
through 2005).  The data for the past 10 years were expected to be more
representative of the latest developments in the agricultural business
than data for years prior to 1996. 

Growth Rates for New Facilities in All Industry Categories except Oil
Production

In this analysis, SPCC-regulated facilities were divided into existing
and new facilities to reflect the differences in compliance activities
between the two groups.  Therefore, EPA estimated the number of both new
and existing facilities for each year of the analysis.  While the number
of existing facilities subject to the SPCC rule was estimated using
industry-specific growth rates as described above, these growth rates
are likely to underestimate growth in the number of new facilities
because they also incorporated the rate at which facilities go out of
business.  The cost differential between new facilities coming under
compliance with SPCC requirements versus facilities that close annually
may not be zero.  As a result, EPA disaggregated the industry-specific
growth rates to separate trends in the number of new facilities from
trends in the total number of facilities.

EPA estimated the growth rates for new facilities only using
commercially available data obtained on the number of businesses (by
NAICS code) in 2005 from the D&B Market Spectrum database.  These data
allowed for an estimation of the fraction of businesses that became
operational in 2005 relative to the total number of businesses in that
year.    SEQ CHAPTER \h \r 1  When comparing the growth rates for
existing facilities to those for new facilities, the following
adjustment was made: when the industry growth rate for new facilities
was less than that for existing facilities, the growth rate for new
facilities was set equal to the rate for existing facilities.  This
discrepancy occurred because growth rates were calculated using data for
different years (1992 to 2002 for existing facilities and 2005 for new
facilities); the adjustment was needed because data for the ten-year
period was expected to be more representative of future growth than one
year’s worth of data.  

This analysis assumed that industry growth rates would be constant over
the ten-year analytical period for all industries except oil production,
which may or may not adequately represent the trends for individual
sectors.  A list of estimated growth rates for existing and new
facilities for all industry groups included in the analysis is presented
in   REF _Ref140571039  Exhibit 4-9 .  Growth rates for new and existing
oil production facilities are discussed in the following section.

 

Growth Rates for New Oil Production Facilities

Because oil production facilities account for the largest fraction of
SPCC-regulated facilities across all industry categories and represent a
dynamic industry, an alternative approach was used for estimating future
oil production industry growth rates.  EPA relied on industry-specific
forecasting information, which was expected to reflect growth rates
better than an approach based on historical trends.  Using a constant
growth rate for the entire analytic period is unlikely to adequately
reflect future growth dynamics in the oil production industry.

EPA derived the number of oil production facilities from the number of
oil wells as discussed in Appendix C.  Complete data on the projected
number of oil wells beyond 2004 were not available.  However, a study
conducted for the U.S. Department of Energy (DOE) includes a forecast of
marginal natural gas and oil well counts through 2025.  The approach
used in the DOE analysis relied on two main data sources: the Annual
Energy Outlook (AEO) published annually by the EIA, and the Marginal Oil
and Gas annual publication of the Interstate Oil and Gas Compact
Commission (IOGCC).

Due to the lack of readily available data on oil well forecasts, EPA
projected the number of oil production facilities over the period of
analysis (through 2018), following the methodology developed in the DOE
study on marginal wells:

Acquired historical total U.S. oil production data for the years 1995
through 2004.  EIA reports the annual values of crude oil production in
barrels per day for 1919 through 2004.

Obtained forecasted total oil production data through 2018 from EIA. 
EPA used the data on domestic crude oil production for 1990 through 2030
from the Annual Energy Outlook 2006, with Projections to 2030. 

Projected the average oil well rate into the future.  EPA first
estimated the daily production rate per well (barrels of oil produced
per well per day) by dividing annual oil production by the number of
wells and the number of days in a year.  Then, EPA regressed the year
versus historical daily well rate data to derive a linear function for
forecasting future average production rates. 

For each year of the forecast, 2005 through 2018, EPA estimated the
number of wells by dividing the predicted oil production by forecasted
average production rate.

Estimated the number of oil production facilities based on the total
number of oil wells using four wells per facility.

Calculated annual growth rates for the oil production facilities for
2005 through 2018.  

  REF _Ref140633505  Exhibit D-1  presents the projected number of oil
production facilities in the U.S. and the annual growth rates estimated
using this methodology. 

Exhibit D-  SEQ Exhibit \* ARABIC \s 1  1 

Projected Number of Oil Production Facilities and Estimated Growth Rates

Year	Number of Facilities	Annual Growth Rate

2005	166,046	-2.31%

2006	176,770	6.46%

2007	183,645	3.89%

2008	193,211	5.21%

2009	206,646	6.95%

2010	215,063	4.07%

2011	221,352	2.92%

2012	230,405	4.09%

2013	239,801	4.08%

2014	249,568	4.07%

2015	258,518	3.59%

2016	270,736	4.73%

2017	278,686	2.94%

2018	287,809	3.27%

A sharp increase is expected in the number of oil production facilities,
as demonstrated in   REF _Ref140633505 \h  Exhibit D-1 , due to a
continuously decreasing production rate at oil wells and relatively
stable total oil production in the United States.  EIA states in its
2006 Annual Energy Outlook that a large proportion of the total U.S.
resource base of onshore conventional oil has been produced, and new oil
reservoir discoveries are likely to be smaller, more remote, and
increasingly costly to exploit.

APPENDIX E

COMPARISON OF THE TOTAL COST SAVINGS RESULTING FROM THE 2006 FINAL RULE
WITH THOSE PROJECTED FOR THE 2005 PROPOSED RULE

For all rule components except for the qualified facilities, the final
rule yields an increase in compliance cost savings over the 2005
proposed rule.  The changes in the cost saving estimates for the
individual rule components between the proposed and final rule are
primarily attributed to the following four factors:

Modified regulatory requirements such as additional paperwork-related
requirements for qualified facilities, inclusion of additional industry
sectors covered by the exemption for mobile refuelers previously offered
only for airports;

Adjustments to the input variables such as updated labor wages and O&M
and capital cost estimates;

A new analysis period from 2008 thought 2017; and 

Changes in the estimation methodology such as revised industry sector
growth rates and SPCC-regulated facility universe estimates.

For qualified facilities, the difference in the estimates is explained
by the revised growth rates for industries that contain qualified
facilities and other updated inputs in the estimation process. 

For the oil-filled operational equipment components of the rule, the
difference in the cost savings between the proposed and final rule is
mainly due to the two following reasons: (1) inclusion of additional
industry sectors in the analysis of facilities using oil-filled
operational equipment as opposed to just the electric utilities sector
considered for the proposed rule and (2) revised growth rates for the
analyzed industries including electric utilities, for which the growth
rate has been revised downward.  One of the main reasons that do not
allow a side-by-side comparison of the cost savings between the proposed
and final rule is that EPA considered three scenarios in this analysis
to consider a range in the potential number of facilities from the
industries other than electric utilities identified as having oil-filled
equipment whose owners and operators would take advantage of the offered
flexibility.  

 The increase in estimated compliance cost savings for owners and
operators of facilities with motive power containers from the proposed
to the final rule is due solely to the analytical adjustments outlined
above.  No changes were made to the regulatory requirements for this
component of the SPCC rule.  

It is important to note that cost savings for owners and operators of
facilities with mobile refuelers under the amendments to the SPCC rule
represent a considerably higher level of overall savings as compared to
the proposed rule for two primary reasons (1) the inclusion of similar
mobile refuelers in other industry sectors including mining sites,
chemical complexes, construction sites, seaport terminals, and tank
truck home base operations and (2) the adjustments made to the
estimation methodology, revised growth rates, etc.

  REF _Ref140633544  Exhibit E-1  compares the total cost savings
resulting from the 2006 final rule with those projected for the 2005
proposed rule, given a baseline of the 2002 SPCC rule requirements.  

Exhibit E-  SEQ Exhibit \* ARABIC \s 1  1 

Estimated Cost Savings Associated with the 2006 Final Rule Amendments
Compared to the 2005 Proposed Rule Amendments ($2005 Millions)

Rule Component/Scenario1	2005 Proposed Rule	2006 Final Rule

	Annualized Cost Savings (3%)	Annualized Cost Savings (7%)	Annualized
Cost Savings (3%)	Annualized Cost Savings (7%)

Qualified Facilities	$36.33 	$36.23 	$37.89 	$37.74 

Qualified OFE

25%	$60.90 	$60.10 	$39.00 	$38.70 

50%

	$53.10 	$52.80 

75%

	$67.20 	$66.80 

Motive Power

10%	$0.99 	$0.98 	1.07 	$1.07 

25%	$2.47 	$2.45 	$2.69 	$2.68 

50%	$4.93 	$4.91 	$5.37 	$5.35 

Mobile Refuelers

25%	$6.92 	$6.86 	$17.20 	$17.10 

50%

	$34.40 	$34.20 

75%

	$51.60 	$51.30 

1  	Estimated savings are presented for final rule components and
scenarios as discussed in this report. 

  SEQ CHAPTER \h \r 1 APPENDIX F

ALTERNATIVE ECONOMIC IMPACT ANALYSIS

Rationale for Conducting Alternative Analysis	

	The main body of the regulatory impact analysis (RIA) accounts for cost
savings resulting from the 2006 SPCC final rule amendments compared to a
baseline, which is compliance with the SPCC rule requirements under 40
CFR part 112, as amended in 2002 (67 FR 47042).  The cost savings may in
fact be greater or lower for reasons and limitations of the analysis
explained in Section 12 of the RIA.  EPA is treating costs to comply
with the current SPCC rule as liabilities that owners and operators of
the regulated entities currently have – whether or not they have
actually made the capital expenditures to comply.  In this analytical
construct, owners and operators of these firms are assumed to simply
delay the expenditures for the costs they already carry.

	

	EPA is aware of industry concerns regarding potential non-compliance
among owners and operators of facilities of certain sizes or industry
sectors, although no reliable empirical evidence exists to assess the
extent or magnitude of such non-compliance.  Therefore, there might be
some level of non-compliance during the period of analysis, ten years
after the established compliance date of October 31, 2007. Owners and
operators of facilities that are complying with the baseline SPCC
requirements would save money when some of those requirements are
relaxed under the final rule amendments.  Owners and operators of
facilities that are not currently in compliance with 2002 SPCC rule
requirements, however, have not incurred expenditures in the baseline,
and thus would not incur any savings as a result of this rule, unless
they come into compliance during the analysis period.

The purpose of this alternative economic impact analysis is to better
understand the changes in cost savings associated with different rates
of compliance with the 2002 SPCC rule.  The following section, Estimated
Change in Cost Savings for the Alternative Baseline, describes the
estimated changes in cost savings resulting from the 2006 SPCC final
rule assuming partial (50 percent) compliance during the analysis
period.  For this alternative analysis, EPA assumed 50 percent
compliance with both the 2002 and 2006 rules.  The Agency anticipates
the compliance rate under the 2006 final rule to be at the same level as
it would have been under the 2002 rule or higher.  The section,
Per-Facility Cost Savings for Affected SPCC Requirements, presents cost
saving estimates for owners and operators of facilities that could come
into compliance during the analysis period and take advantage of the
reduced requirements.

		

Estimated Change in Cost Savings for the Alternative Baseline

Under the partial (50 percent) compliance scenario, anticipated cost
savings would be less than the total cost savings presented in the
regulatory impact analysis.  The reason for less cost savings in this
scenario is that the fraction of SPCC-regulated facilities whose owners
and

operators are assumed to be in non-compliance would not be affected by
the rule changes, and therefore, would not be able to lower their costs.
 Therefore, under a 50 percent compliance scenario, owners and operators
of half of all facilities (all non-compliant facilities) will have no
cost savings.  This is equivalent to cost savings equal to 50 percent of
the total cost savings calculated under the full compliance scenario. 
The estimated cost savings under the full and partial compliance
scenarios are presented in   REF _Ref149638591  Exhibit F-1 .

							

Exhibit F-  SEQ Exhibit \* ARABIC \s 1  1 

Estimated Cost Savings Associated with Final Changes to the SPCC Rule

under Full and Partial Compliance Scenarios

Rule Component	

Cost Savings ($ million/year)

	Full (100 percent) Compliance	Partial (50 percent) Compliance

	Not

Discounted	3% Discounted	7% Discounted	Not

Discounted	3% Discounted	7% Discounted

Qualified Facilities	$38.0	$37.9	$37.7	$19.0	$18.9	$18.9

Qualified OFE1

25%	$39.2	$39.0	$38.7	$19.6	$19.5	$19.4

50%	$53.4	$53.1	$52.8	$26.7	$26.5	$26.4

75%	$67.5	$67.2	$66.8	$33.7	$33.6	$33.4

Motive Power1

10%	$1.08	$1.07	$1.07	$0.54	$0.54	$0.54

25%	$2.69	$2.69	$2.68	$1.35	$1.34	$1.34

50%	$5.39	$5.37	$5.35	$2.69	$2.69	$2.68

Mobile Refuelers1

25%	$17.3	$17.2	$17.1	$8.6	$8.6	$8.6

50%	$34.5	$34.4	$34.2	$17.3	$17.2	$17.1

75%	$51.8	$51.6	$51.3	$25.9	$25.8	$25.7

1 To estimate the number of facilities affected by the final rule
changes within each industry sector, EPA developed three scenarios: 25,
50, and 75 percent for qualified facilities and mobile refuelers and 10,
25, and 50 percent for facilities with motive power.  See Chapters 6
through 9 of the RIA for more details.

Per-Facility Cost Savings for Affected SPCC Requirements

The reduced requirements offer regulatory relief to owners and operators
of certain facilities with regard to several rule components presented
in   REF _Ref149638636  Exhibit F-2 .  Owners and operators of
SPCC-regulated facilities that are not currently in compliance with
existing rule requirements but would like to take advantage of the
offered flexibility would compare the cost of compliance before and
after the final rule changes.  Owners and operators of facilities that
come into compliance after the final rule goes into effect would realize
reduced expenditures associated with SPCC requirements.    REF
_Ref149638636  Exhibit F-2  summarizes the SPCC requirements affected by
the final rule, presents per facility unit cost estimates associated
with the existing and new requirements, and cost savings resulting from
the reduced requirements.  If owners and operators of some facilities
come into compliance after the 2006 final rule goes into effect, the
estimated cost savings reported in the RIA would represent an
underestimate because owners and operators of those facilities would
incur additional cost savings as presented in   REF _Ref149638636 
Exhibit F-2 .  

Exhibit F-  SEQ Exhibit \* ARABIC \s 1  2 

Per-Facility Unit Cost Estimates and Savings for Affected SPCC
Requirements ($/Year)

Existing 2002 Requirement	Cost Estimate	Final 2006 Requirement	Cost
Estimate	Cost Savings

Qualified Facilities:

PE certification of SPCC Plan for qualified facilities	$1,880
Self-certification of SPCC Plan in lieu of PE certification	$0	$1,880

Qualified OFE:

Secondary containment for oil-filled equipment	Small: $11,000

Medium: $27,500

Large: $60,000	Contingency plan in lieu of secondary containment	$3,470
Small: $7,530

Medium: 24,030

Large: $56,530

Motive Power:

Motive power containers are subject to the rule	$563	Exempted motive
power containers	$0	$563

Mobile Refuelers:

Sized secondary containment for mobile refuelers	$13,000	Removed
requirement for sized secondary containment	$0	$13,000

AFVO:

Inapplicable provisions related to AFVO are not removed/reserved	-
Removed and reserved certain SPCC requirements for AFVO	-	-

Farms:

Farms are subject to the rule	-	Issued an extension of the compliance
dates for owners and operators of farms	-	-

Major underlying assumptions and considerations for the estimates in  
REF _Ref149638636  Exhibit F-2  are as follows:

General: Only substantive per-facility unit costs associated with
requirements affected by the 2006 SPCC final rule are estimated.  EPA
did not analyze cost savings associated with non-substantive changes to
requirements for facilities that handle, store, or transport animal fats
and vegetable oils or the extension of the compliance dates for owners
and operators of farms.  For data sources used to obtain unit cost
estimates for individual rule requirements, see Chapter 5 of the RIA.

Qualified Facilities: Qualified facilities whose owners and operators
would come into compliance after the final rule goes into effect are
expected to avoid a PE cost of Plan certification when preparing a new
SPCC Plan.  The rest of components associated with SPCC Plan
requirements would not be affected by the final rule.

Qualified OFE: Owners and operators of facilities with OFE are expected
to choose a less expensive option offered by the final rule and prepare
a contingency plan instead of secondary containment.  EPA recognizes
that owners and operators of some facilities would need to make an
impracticability determination.  In those cases, the cost savings would
be lower, since owners and operators would be avoiding only an
impracticability determination rather than secondary containment.  

Motive Power: Savings for owners and operators of facilities with motive
power containers reflect reduced expenditures associated with smaller
regulated storage capacities.

Mobile Refuelers: The estimated annual cost savings for owners and
operators of facilities with mobile refuelers consist of the avoided
potential expenditures of providing sized secondary containment.  

Implications of the Alternative Compliance Baseline

Facilities whose owners and operators are not complying with existing
SPCC requirements are not providing the concomitant levels of
environmental protection assumed by the rule.  Under the partial
compliance baseline, therefore, any increased risks associated with
reduced levels of regulation under the final rule also diminish, since
there is no reduction in environmental protection for those facilities. 
Owners and operators of these facilities do experience the benefits of
avoided compliance costs accrued during the period of non-compliance. 
These cost savings would further offset the current overall costs of
compliance.

Limitations of the Analysis Used to Estimate Cost Savings

It is important to note that the cost savings presented in the main body
of the RIA may overestimate or underestimate actual figures because of
the limitations of the analysis.  Major limitations and assumptions used
in the RIA are described below.  

Since the rule does not include a notification requirement, EPA is
limited to data already collected by state or federal agencies or by
proprietary sources to estimate how many SPCC-regulated facilities of
different sizes with different types of equipment and oil storage and
utilization techniques exist.  

Another major limitation concerns m  SEQ CHAPTER \h \r 1 any of the cost
estimates used in the analysis, which are based on interviews with a
limited number of PEs.  The data provided by these PEs represent
anecdotal information and are not statistically valid, so they cannot be
reliably extrapolated to a larger universe.  

In order to account for similar requirements imposed by state
regulations regarding the storage, handling, and containment of oil, EPA
developed a nation-wide estimate for the degree of overlap for each
facility size category.  The Agency used the developed overlap measure
in estimating total burden associated with each compliance activity. 
The nationwide estimate for the overlap does not reflect differences in
state regulations and the degree of compliance that is likely to vary
across states.  Additionally, the developed estimates do not account for
overlaps with other state and federal regulations that are not focused
on oil pollution prevention. 

One of the major assumptions EPA made in the regulatory impact analysis
is to assume that owners or operators of existing SPCC-regulated
facilities would forgo compliance activities offered as alternatives to
activities that required capital investments because they would have
already incurred a one-time cost.  For example, a facility owner or
operator, who had secondary containment for qualified oil-filled
operational equipment in place, would not take advantage of the provided
alternative to prepare a contingency plan instead.  However, if there
were a certain number of existing facilities currently in
non-compliance, the final rule changes would result in additional cost
savings for owners and operators of facilities that come into compliance
during the analysis period, as presented in   REF _Ref149638636  Exhibit
F-2 .

 33 U.S.C. 1321(j)(1)(C).

  56 FR 54757 (October 22, 1991), superseding Executive Orders 11735, 38
FR 21243 (August 7, 1973) and 11548, 35 FR 11677 (July 20, 1970).

 		Economic Analysis for the Final Revisions to the Oil Pollution
Prevention Regulation (40 CFR part 112), May 2002; Information
Collection Request for the final rule to amend the oil pollution
prevention regulation  (40 CFR part 112), May 2002.

 	The Agency’s first effort, completed in 1991 and titled the Spill
Prevention, Control, and Countermeasure Facilities Study, summarized
information on small, medium, and large facilities in 16 industry
sectors that store oil in above ground and underground tanks (EPA,
1991).  In 1995, EPA followed this study with a survey of approximately
30,000 facilities within the industries examined in 1991.  The 1995
survey yielded detailed information on the oil storage characteristics
of surveyed facilities, and was designed to allow statistical
extrapolation to a broader universe.  EPA used the results of the 1995
survey, the 1991 facility study, and a 1989 American Petroleum Institute
report to calculate a 1996 Adjusted National Estimate of (approximately
438,000) affected facilities.  The 1996 estimate has been the basis of
subsequent EPA analyses of regulatory burdens associated with the SPCC
rule (EPA, 1996a).  On July 17, 2002, EPA published revisions to SPCC
requirements in 40 CFR part 112.  In its economic analysis for the
proposed SPCC rule, EPA estimated that approximately 419,000 facilities
were covered by the requirements in 2002 (EPA, 2002).  However, various
industry representatives have suggested that the actual number could be
higher.  

 	EPA’s 1996 estimate included a large number of facilities under the
broad category "Other Commercial Facilities," making it difficult to
accurately identify industry sectors included in this study that were
previously excluded.  In addition, the current study attempts to include
facilities that may store animal fats and vegetable oil, which were
previously excluded from the 1996 estimate. 

 	A similar comparison is not made to EPA’s 1995 survey, because the
current analysis is modeled after EPA’s 1991 study.

 See Exhibit 4-2 for a summary of information contained within each
state database used in the analysis.

 	D&B Market Spectrum is a suite of related products and services that
allows companies to combine their customer data and third-party data
with D&B’s global database, resulting in the most targeted, accurate,
and complete database of businesses in the United States.

 	In the matching process, the following facilities and tanks are
dropped from the estimation:  facilities with less than 1,320 gallons of
aggregate storage, tanks with less than 55 gallons of storage,
underground tanks subject to EPA UST requirements, inactive tanks, and
tanks that do not store oil substances. 

   EPA uses D&B Market Spectrum data to match facilities to industries
in order to use state databases that do not contain industry
information.  Exhibit 4-3 summarizes the data fields contained within
each state database that is used in the analysis.  As shown, six of the
eight state databases do not contain industry information for each
facility.

 	EPA uses the 1997 U.S. Economic Census data because the 2002 U.S.
Economic Census data were not complete when the analysis was being
conducted.

 	The facility ratio is calculated using the eight state databases for
all capacity categories except Category I.  Because the Maryland
database does not include information on Category I facilities, the
ratio for Category I facilities is calculated using seven state
databases (excluding Maryland).  

 	United States Department of Labor, Bureau of Labor Statistics,
Employer Costs for Employee Compensation, December 2005.

 	Overhead costs were computed separately from BLS data and were assumed
to be an additional 17 percent of the total wage rate, which is composed
of direct wages and salaries and employee benefits, as reported by BLS.

 	For the final rule requirements allowing self-certification of SPCC
Plans, see Section 6. 

 	Information Collection Request for the final rule to amend the oil
pollution prevention regulation  (40 CFR part 112), May 2002; Economic
Analysis for the Final Revisions to the Oil Pollution Prevention
Regulation (40 CFR part 112)."  May 2002.

 	The contacted firms are: Core Engineered Solutions; ENSR
International; GZA GeoEnvironmental, Inc.; SCS Engineers; and Woodard &
Curran.

 	See Section 5.1.3 for the assumption on the fraction of facilities
expected to submit information due to oil discharges.

 	Information Collection Request for the final rule to amend the oil
pollution prevention regulation  (40 CFR part 112), May 2002.

 	Information Collection Request for the final rule to amend the oil
pollution prevention regulation  (40 CFR part 112), May 2002.

 	The contacted individuals are: Peter Wolberg at Western Gas Resources,
Jerry Steckard at Hyperion Energy, Joanne Lupa at Massachusetts Electric
Co., Kyle Mullens at Kaneb Pipe Line Partners, L.P., Jim Baker at
Colonial Group Inc., Matt Yost at Martin Midstream Partners L.P., Sally
Rogers at Sinclair Oil Corp. Casper Refinery, Block Andrews at Aquila,
Inc., and Brad Bergman at Sun Ray Energy Co.

 	Screening Analysis of the Spill Prevention, Control, and
Countermeasure Program Impacts on Small Entities, March 2002.

 	The estimate was based on interviews with engineers at (1) InterSpec,
LLC, an inspection and engineering services firm, in February 2004, and
(2) engineering firms that specialize in SPCC-related activities at
facilities that store oil, in July 2005.

 	The number of tanks per facility estimated using state oil tank
databases was two, four, nine, and 16 tanks for Category I, II, III, and
IV facilities, respectively.

 	The estimate was based on the interview with Bill Lawson at Portland
General Electric in July 2005 and the NODA comments submitted to EPA.

 	Information Collection Request for the proposed rule to amend the oil
pollution prevention regulation  (40 CFR part 112), August 2005.

 	For details, see (Regulatory Impact Analysis of Revisions to the Oil
Pollution Prevention Regulation (40 CFR 112) to Implement the Facility
Response Planning Requirements of the Oil Pollution Act of 1990," June
1994.

 	Source: Dawg Inc. at   HYPERLINK
"http://www.dawginc.com/spill-kits/spill-kit-95-gallon-overpack.php" 
http://www.dawginc.com/spill-kits/spill-kit-95-gallon-overpack.php 

 	Source: New Pig at   HYPERLINK
"http://www.newpig.com/en_US/spill-absorbents/oil-spill-containment-boom
s.htm;jsessionid=UU2OUIFSN11ZUCTGIQVSFEQKMZCCWJVC" 
http://www.newpig.com/en_US/spill-absorbents/oil-spill-containment-booms
.htm;jsessionid=UU2OUIFSN11ZUCTGIQVSFEQKMZCCWJVC 

 	Source: Versatech Products Inc. at
http://www.versatech.com/recovery/RBS_skimmers.html.

 	These discount rate values reflect guidance from the Office of
Management and Budget regulatory analysis guidance document, Circular
A-4 (OMB, 2003).

 	Guidelines for Preparing Economic Analyses, Chapter 6 “Analysis of
Social Discounting”, EPA, September 2000.

 	See Chapter 4 on the SPCC universe for more information regarding how
the industry estimates were calculated.

 	The projected number of affected facilities under the SPCC
requirements includes farms.  Although EPA is extending the compliance
dates for farms until it determines specific requirements for this
industry, the Agency does not expect these requirements to be more
stringent than the rule requirements for qualified facilities.
Therefore, EPA expects farms to accrue the cost savings as much as
qualified facilities from other industries.

 For detailed description of the methodology used to estimate the number
of electric utilities, see Appendix C.

 	See Chapter 5 on Unit Compliance Costs for more information regarding
the cost estimates associated with preparing a contingency plan.

 	For example, under the 25-percent scenario, there are, on average, a
projected 24 new Category IV facilities with estimated compliance cost
savings of $56,500 per facility, which results in total cost savings of
$1.37 million for this category of new facilities.

 	Caterpillar, Inc.  2006.  List of Industries Served.  Available at:  
HYPERLINK "http://www.cat.com/cda/layout?m=37403&x=7" 
http://www.cat.com/cda/layout?m=37403&x=7 .

 	Deere & Company.  2006.  List of Industries Served.  Available at:  
HYPERLINK "http://www.deere.com/en_US/deerecom/usa_canada.html" 
http://www.deere.com/en_US/deerecom/usa_canada.html .

 	Kubota Corporation.  2006.  List of Products.  Available at:  
HYPERLINK "http://www.kubota.com/f/products/products.cfm" 
http://www.kubota.com/f/products/products.cfm . 

 	Joy Global, Inc.  2006.  Company Overview.  Available at:   HYPERLINK
"http://www.joyglobal.com/company_overview/index.jsp" 
http://www.joyglobal.com/company_overview/index.jsp .

 	CNH Global NV.  2006.  Lines of Business.  Available at:   HYPERLINK
"http://www.cnh.com/home.asp"  http://www.cnh.com/home.asp . 

 	Terex Corp.  2006.  List of Industries Served.  Available at:  
HYPERLINK
"http://www.terex.com/main.php?obj=industries&action=BROWSE&nav=indust&t
exsess=46f350a492cf096942b6e7c55d34e7c0" 
http://www.terex.com/main.php?obj=industries&action=BROWSE&nav=indust&te
xsess=46f350a492cf096942b6e7c55d34e7c0 . 

 	Estimated reductions in compliance costs are on an annualized basis.

 	The definition is intended to describe vehicles of various sizes
equipped with a bulk storage container such as a cargo tank (tank
trucks, tank full trailers, tank semitrailers, etc.) that are used to
fuel or defuel aircraft, motor vehicles, locomotives, and vessels.  The
definition does not include other mobile or portable oil storage
containers, which must comply with §112.8(c)(11).  In addition, EPA
intends the exemption to cover vehicles used for fueling, and not
vehicles used primarily for the bulk storage of oil, in place of
stationary containers.

 	Based on the estimated number of existing airports and the estimated
annual growth in the airport universe (see   HYPERLINK
"http://www.faa.gov/airports_airtraffic/airports/resources/data_stats/" 
http://www.faa.gov/airports_airtraffic/airports/resources/data_stats/ 
and Section 4 of this analysis). 

 	The contacted individual is Kovatch Corporation – Sales Department .

 	Scully Signal Company.  2006.  List of Industries Served Product
Transferring Equipment.  Available at:   HYPERLINK
"http://www.scully.com/is_index.html" 
http://www.scully.com/is_index.html .

 	The contacted individual is Deputy Fire Marshall JT O’Neil at
Henderson, NV Fire Marshall’s Office.

 	The contacted individual is Charles Key at Houston, TX Fire
Marshall’s Office.

 	U.S. Department of Energy, Report to Congress on Candidate Sites for
Expansion of the Strategic Petroleum Reserve to One Billion Barrels,
Office of Strategic Petroleum Reserve, March 1991, Document Number
DOE/FE-0221P.

 	Mazzotta, Marisa J., J. J. Opaluch and T. Grigalunas.  1994.  Natural
Resource Damage Assessment: The Role of Resource Restoration.  Natural
Resources Journal.  Vol. 34.  Winter, 1994.

 	According to the economic analysis of the 2002 SPCC final rule, EPA
estimated that 94 percent or more of the total number of SPCC-regulated
facilities were also SBA-defined small businesses.  U.S. Environmental
Protection Agency (EPA).  "Economic Analysis for the Final Revisions to
the Oil Pollution Prevention Regulation (40 CFR Part 112)", May 2002.

 	This assumption is consistent with an earlier study of PE
certification cost impacts on small businesses conducted by the SBA. 
Jack Faucett Associates for SBA Office of Advocacy, “Proposed Reforms
to the SPCC Professional Engineer Certification Requirement: Designing a
More Cost Effective Approach for Small Facilities", June 2004.

 	The regulatory analysis for the 2005 proposed rule estimated a
universe of 335,000 Category I facilities, whereas this analysis
estimated a universe of 345,000 Category I facilities.  The 2006
estimates are not equal to individual estimates for the Category I
capacity categories as presented in Exhibit 11-1, due to double counting
of facilities across rule components.  

 See Chapter 7 for derivation of the unit cost saving estimates.

 	The contacted individual is Deputy Fire Marshall JT O’Neil at
Henderson, NV Fire Marshall’s Office.

 	Circular A-4, OMB, September 2004.

 	http://www.intank.com/PDF/NYFinalReport.pdf

 	http://www.intank.com/PDF/NYFinalReport.pdf

 	Cost savings reported by InTank, a provider of robotic inspection
services.

 	The specific regulatory requirements for each of these rule components
are discussed in Chapters 6 through 9 of this report.

 	The EPA UST program applies to USTs larger than 110 gallons that store
petroleum or hazardous products identified by the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA).
Certain tanks are exempt from UST program regulation.  These exemptions
include farm and residential tanks smaller than 1,100 gallons storing
motor fuel used for noncommercial purposes, tanks storing heating oil
used on the premises where it is stored, tanks on or above the floor of
underground areas such as basements or tunnels, flow-through process
tanks, and emergency spill and overfill tanks.  Partially buried tanks
with at least 10 percent of their volume below ground level are defined
as USTs under this program.

 	D&B Market Spectrum is a suite of related products and services that
allows companies to combine their customer data and third-party data
with D&B’s global database, resulting in the most targeted, accurate,
and complete database of businesses in the United States.

 	Other oil-based fuel types are reported in aggregate in the 1997
Census of Agriculture.

 	To check the reasonableness of calculations of storage of oil on
farms, extension services in a few states were consulted.  A
conversation with Tim Hewitt, a farm management specialist at the
University of Florida, was notable.  He categorically stated that the
majority of the farmers in Florida, Georgia, and Alabama store oil in
500-gallon containers and, at most, 1,000-gallon tanks.  Dennis
Kauppila, a farm management specialist at the University of Vermont,
also estimated that most farms store oil in 1,000-gallon tanks.

 	USDA's National Agricultural Statistics Service, County Table 6, 1982
U.S. Census of Agriculture, Volume 1.

 	Appendix C provides detailed information on the derivation of
industry-specific growth rates used in the analysis.

 	U.S. Energy Information Administration, Distribution and Production of
Oil and Gas Wells by State, data available at   HYPERLINK
"http://www.eia.doe.gov/pub/oil_gas/petrosystem/petrosysog.html" 
http://www.eia.doe.gov/pub/oil_gas/petrosystem/petrosysog.html .

 	Personal communication with a Federal On-Scene Coordinator for EPA
Region 6 and Mark England, Texas Railroad Commission, 2005.

 	Facilities report the amount of oil stored regardless of the type of
oil they use.  This definition of a facility differs from the definition
of an "establishment" developed by the U.S Census Bureau, which was used
for other industry sectors in the analysis.  The U.S. Census Bureau
definition is:  “An establishment is a single physical location at
which business is conducted or where services or industrial operations
are performed.”  Therefore, EPA assumed that the information on oil
stock held is a reasonable proxy for plant-specific capacity.

 	EPA’s 1991 study assumed that all electric utility plants store oil
in excess of SPCC capacity thresholds.  The 1995 survey, however, found
that 40 to 60 percent of facilities did not meet the SPCC capacity
criterion.  Because the current estimates are based on the capacity at
each plant and cover the majority of utility plants, the current
estimates should be fairly accurate in representing the universe of
SPCC-regulated electric power plants.

 	Major regulated utilities must file FERC Form No. 1, on which
utilities report information on their substations and electrical
equipment.  “Major” is defined as having (1) 1,000,000 megawatt
hours or more; (2) 100 megawatt hours of annual sales for resale; (3)
500 megawatt hours of annual power exchange delivered; or (4) 500
megawatt hours of annual wheeling for others (deliveries plus losses).

 	A “major” substation is defined as having (1) one million Megawatt
hours or more; (2) 100 megawatt hours of annual sales for resale; (3)
500 megawatt hours of annual power exchange delivered; or (4) 500
megawatt hours of annual wheeling for others (deliveries plus losses).
Information from the Federal Energy Regulatory Commission, available at 
 HYPERLINK "http://www.ferc.gov/doc-filing/eforms.asp" 
http://www.ferc.gov/doc-filing/eforms.asp .  

 	Data presented in this paragraph are from U.S. Environmental
Protection Agency, "Denial of petition requesting amendment of the
Facility Response Plan rule," 62 FR 54510, October 20, 1997.

 	EPA assumed that most AFVO facilities are in the food manufacturing
industry, and that facilities that store larger quantities of petroleum
and related oils (and are therefore large facilities) may store similar
quantities of AFVO.  Such facilities may have different storage of AFVO
as compared to petroleum oil.  In particular, small facilities that
produce AFVO may store much larger quantities of AFVO as compared to
petroleum and related oils that are used for energy. 

 	EPA uses these two years because 1995 is the most recent year for
which data on oil storage capacity of tanks at commercial buildings were
collected, and 2003 is the most recent year in which the survey was
conducted.

 	Two adjustment factors are estimated for government buildings because
the 1995 and 2003 surveys include government buildings in two
categories: “office” and “other”. 

 	USDA National Agricultural Statistics Service data, available at  
HYPERLINK
"http://www.nass.usda.gov:8080/QuickStats/Create_Federal_All.jsp" 
http://www.nass.usda.gov:8080/QuickStats/Create_Federal_All.jsp .

   See the next section for description of derivation of growth rates
for oil production.

 	For detail, see Don J. Remson, “A Forecast of Marginal Natural Gas
and Oil Well Data”, June 2005. U.S. Department of Energy, National
Energy Technology Laboratory, available at   HYPERLINK
"http://www.netl.doe.gov/technologies/oil-gas/publications/AP/MarginalWe
llData_Topical.pdf" 
http://www.netl.doe.gov/technologies/oil-gas/publications/AP/MarginalWel
lData_Topical.pdf .

 	U.S. Energy Information Administration, data available at   HYPERLINK
"http://www.eia.doe.gov/pub/oil_gas/petrosystem/petrosysog.html" 
http://www.eia.doe.gov/pub/oil_gas/petrosystem/petrosysog.html .

 	U.S. Energy Information Administration, data available at
http://www.eia.doe.gov/oiaf/aeo/graphic_data.html.

 	U.S. Energy Information Administration, Annual Energy Outlook 2006.

 For a discussion on associated risks, see Section 3.1 of the RIA.

Regulatory Impact Analysis for the Final Revisions to the Oil Pollution
Prevention Regulations (40 CFR PART 112)

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NPV = NB0+ d1NB1 + d2NB2 + ... + dnNBn

where,

NBt is the net benefits that accrue at the end of period, t, and the
discounting weights are given by:

dt = 1/(1+r)t

where r is the discount rate and n is the last year of the analysis.

 

where,

AC = annualized cost accrued at the end of each of n periods;

PVC = present value of costs;

r = the discount rate per period; and

n = the analysis period.

Total Cost Savings = ( [(EFac * ECost Savings) + (NFac * NCost Savings)]

where,

EFac = the projected number of existing affected qualified facilities

NFac = the projected number of new affected qualified facilities

ECost Savings = the per facility cost savings based on compliance
options available to existing qualified facilities

NCost Savings = the per facility cost savings based on compliance
options available to new qualified facilities

Total Cost Savings = ( [(NFacs * Cost Savingss)]

where,

NFac = the projected number of new affected facilities by size category,
s

Cost Savings = the per facility cost savings based on exemptions for
oil-filled operational equipment by size category, s

s = facility size categories: Categories I & II, Category III, and
Category IV

Total Cost Savings = ( [(EFac * ECost Savings) + (NFac * NCost Savings)]

where,

EFac = the projected number of existing affected facilities

NFac = the projected number of new affected facilities

ECost Savings = the per existing facility cost savings based on SPCC
Rule Exemptions

NCost Savings = the per new facility cost savings based on SPCC Rule
Exemptions

Total Cost Savings = ( (NFac * Cost Savings)

where,

NFac = the projected number of new affected facilities

Cost Savings = the per facility cost savings based on exemptions from
sized secondary containment for mobile refuelers