Document ID: EPA-HQ-OLEM-2019-0087-0001
Agency: epa
Document Type: Proposed Rule
Title: Financial Responsibility Requirements Under CERCLA Section 108(b) for Facilities in the Petroleum and Coal Products Manufacturing Industry
Posted Date: 2019-12-23T05:00Z

[Federal Register Volume 84, Number 246 (Monday, December 23, 2019)]
[Proposed Rules]
[Pages 70467-70484]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27066]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 320

[EPA-HQ-OLEM-2019-0087; FRL-10003-10-OLEM]
RIN 2050-AH06

Financial Responsibility Requirements Under CERCLA Section 108(b) 
for Facilities in the Petroleum and Coal Products Manufacturing 
Industry

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA (or the Agency) is proposing to not impose financial 
responsibility requirements for facilities in the Petroleum and Coal 
Products Manufacturing industry under Section 108(b) of the 
Comprehensive Environmental Response, Compensation, and Liability Act 
(CERCLA). Section 108(b) addresses the promulgation of regulations that 
require classes of facilities to establish and maintain evidence of 
financial responsibility consistent with the degree and duration of 
risk associated with the production, transportation, treatment, 
storage, or disposal of hazardous substances.

DATES: Comments must be received on or before February 21, 2020.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ- 
OLEM-2019-0087, at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. EPA may publish any comment 
received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written

[[Page 70468]]

comment. The written comment is considered the official comment and 
should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e. on the Web, cloud, or other file sharing 
system). For additional submission methods, the full EPA public comment 
policy, information about CBI or multimedia submissions, and general 
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: For more information on this document, 
contact Charlotte Mooney, U.S. Environmental Protection Agency, Office 
of Resource Conservation and Recovery, Mail Code 5303P, 1200 
Pennsylvania Ave. NW, Washington, DC 20460; telephone (703) 308-7025 or 
(email) mooney.charlotte@epa.gov.

SUPPLEMENTARY INFORMATION: 

How can I get copies of this document and other related information?

    This Federal Register proposed rule and supporting documentation 
are available in a docket EPA has established for this action under 
Docket ID No. EPA-HQ-OLEM-2019-0087. All documents in the docket are 
listed in the http://www.regulations.gov index. Although listed in the 
index, some information is not publicly available, e.g., Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Certain other material, such as copyrighted 
material, will be publicly available only in hard copy. Publicly 
available docket materials are available either electronically at 
http://www.regulations.gov or in hard copy at EPA/DC, WJC West, Room 
3334, 1301 Constitution Ave. NW, Washington, DC 20460. This Docket 
Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, 
excluding legal holidays. The Docket Facility telephone number is (202) 
566-0276. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., 
Monday through Friday, excluding legal holidays. The telephone number 
for the Public Reading Room is (202) 566-1744.

Table of Contents

I. Executive Summary
    A. Overview
    B. Purpose of This Action
    C. Summary of the Major Provisions of the Regulatory Action
    D. Costs and Benefits of the Regulatory Action
II. Authority
III. Background Information
    A. Overview of Section 108(b) and Other CERCLA Provisions
    B. History of Section 108(b) Rulemakings
    1. 2009 Identification of Priority Classes of Facilities for 
Development of CERCLA Section 108(b) Financial Responsibility 
Requirements
    2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
    3. 2014 Petition for Writ of Mandamus
    4. Additional Classes 2017 Notice of Intent To Proceed With 
Rulemakings
IV. Statutory Interpretation
V. Approach To Developing This Proposed Rule
VI. Petroleum and Coal Products Manufacturing Industry Overview
    A. Identification of Petroleum and Coal Products Manufacturing 
Industry
    B. Current Industry Practices
    C. Industry Economic Profile
VII. Discussion of Cleanup Sites Analysis
    A. Cleanup Site Evaluations
    B. Role of Federal and State Programs and Voluntary Protective 
Industry Practices at Facilities in the Petroleum and Coal Products 
Manufacturing Industry
    C. Existing State and Federal Financial Responsibility Programs
    D. Compliance and Enforcement History
VIII. Decision to Not Propose Requirements
    A. Solicitation of Public Comment on This Proposal
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulation and Controlling 
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    I. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. Executive Summary

A. Overview

    Section 108(b) of the Comprehensive Environmental Response, 
Compensation, and Liability Act (CERCLA) directs EPA to develop 
regulations that require classes of facilities to establish and 
maintain evidence of financial responsibility consistent with the 
degree and duration of risk associated with the production, 
transportation, treatment, storage, or disposal of hazardous 
substances. The statute further requires that the level of financial 
responsibility be established to protect against the level of risk the 
President, in his discretion, believes is appropriate, based on factors 
including the payment experience of the Hazardous Substance Superfund 
(Fund). The President's authority under this section for non-
transportation-related facilities has been delegated to the EPA 
Administrator.
    This proposal is based on EPA's interpretation of the statute and 
analysis of its record developed for this rulemaking.\1\ EPA has 
analyzed the need for financial responsibility based on risk of 
taxpayer funded cleanups at facilities in the Petroleum and Coal 
Products Manufacturing Industry operating under modern management 
practices and modern environmental regulations, i.e., the type of 
facilities to which financial responsibility regulations would apply.
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    \1\ EPA's interpretation of the statute was upheld by the D.C. 
Circuit in Idaho Conservation League v. Wheeler, No. 18-1141, slip 
op. at 9-12 (D.C. Cir. July 19, 2019).
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    That risk is identified by examining the management of hazardous 
substances at such facilities, as well as by examining Federal and 
state regulatory controls on that management and Federal and state 
financial responsibility requirements.
    Based on that examination, EPA is proposing that, in the context of 
CERCLA Section 108(b), the degree and duration of risk associated with 
the modern production, transportation, treatment, storage or disposal 
of hazardous substances by the Petroleum and Coal Products 
Manufacturing Industry does not present a level of risk of taxpayer 
funded response actions that warrant imposition of financial 
responsibility requirements for this sector.
    In August 2014, the Idaho Conservation League, Earthworks, Sierra 
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a 
Better Environment filed a lawsuit in the U.S. Court of Appeals for the 
District of Columbia Circuit, seeking a writ of mandamus requiring 
issuance of CERCLA Section 108(b) financial responsibility rules for 
the hardrock mining industry, and for the three additional industries 
identified by EPA in the 2010 Advance Notice of Proposed Rulemaking 
(ANPRM),\2\ that is, Chemical Manufacturing; Petroleum and Coal 
Products Manufacturing; and Electric Power Generation, Transmission, 
and Distribution. Following oral arguments, EPA and the

[[Page 70469]]

petitioners submitted a Joint Motion for an Order on Consent, filed on 
August 31, 2015, which included a schedule for further administrative 
proceedings under CERCLA Section 108(b). The court order granting the 
motion was issued on January 29, 2016. A copy of the order can be found 
in the docket for this rulemaking.
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    \2\ 75 FR 816 (Jan. 6, 2010).
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    In addition to requiring EPA to publish a proposed rule on hardrock 
mining financial requirements by December 1, 2016, the January 2016 
Order required EPA to sign for publication in the Federal Register a 
determination whether EPA will issue a notice of proposed rulemaking on 
financial assurance requirements under Section 108(b) in the (a) 
chemical manufacturing industry; (b) petroleum and coal products 
manufacturing industry; and (c) electric power generation, 
transmission, and distribution industry by December 1, 2016. EPA signed 
the required determination on December 1, 2016; the notice was 
published on January 11, 2017,\3\ and announced EPA's intent to proceed 
with rulemakings for all three of the classes.
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    \3\ 82 FR 3512 (Jan. 11, 2017).
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B. Purpose of This Action

    The purpose of today's action is to propose that financial 
responsibility requirements under CERCLA Section 108(b) at facilities 
in the Petroleum and Coal Products Manufacturing industry are not 
necessary, and to solicit comments on this proposal. EPA has reached 
this conclusion based on the analyses described in Parts VI and VII of 
this proposal. The evidence provided in these analyses contributed to 
EPA's proposed finding that the degree and duration of risk posed by 
the Petroleum and Coal Products Manufacturing industry does not warrant 
financial responsibility requirements under CERCLA Section 108(b).
    The analysis and proposed finding in this proposal are not 
applicable to and do not affect, limit, or restrict EPA's authority (1) 
to take a response action or enforcement action under CERCLA with 
respect to any facility in the Petroleum and Coal Products 
Manufacturing industry, including any currently operating facilities or 
those described in this proposal and in the background documents for 
this proposal, and (2) to include requirements for financial 
responsibility as part of such response action. The set of facts in the 
rulemaking record related to the individual facilities discussed in 
this proposed rulemaking support the Agency's proposal not to issue 
financial responsibility requirements under Section 108(b) for this 
class. At the same time, a different set of facts could demonstrate a 
need for a CERCLA response action at an individual site. This proposed 
rulemaking also does not affect the Agency's authority under other 
authorities that may apply to individual facilities, such as the Clean 
Air Act (CAA), the Clean Water Act (CWA), the Resource Conservation and 
Recovery Act (RCRA), and the Toxic Substances Control Act (TSCA).

C. Summary of the Major Provisions of the Regulatory Action

    EPA is proposing to not require evidence of financial 
responsibility under CERCLA Section 108(b) at facilities in the 
Petroleum and Coal Products Manufacturing industry. Thus, there are no 
proposed regulatory provisions associated with this action.

D. Costs and Benefits of the Regulatory Action

    EPA is proposing to not require evidence of financial 
responsibility under CERCLA Section 108(b) at facilities in the 
Petroleum and Coal Products Manufacturing industry. EPA, therefore, has 
not conducted a Regulatory Impact Analysis for this action.

II. Authority

    This proposed rule is issued under the authority of Sections 101, 
104, 108 and 115 of the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. 9601, 
9604, 9608 and 9615, and Executive Order 12580 (52 FR 2923, January 29, 
1987).

III. Background Information

A. Overview of Section 108(b) and Other CERCLA Provisions

    CERCLA, as amended by the Superfund Amendments and Reauthorization 
Act of 1986 (SARA), establishes a comprehensive environmental response 
and cleanup program. Generally, CERCLA authorizes EPA \4\ to undertake 
removal or remedial actions in response to any release or threatened 
release into the environment of ``hazardous substances'' or, in some 
circumstances, any other ``pollutant or contaminant.'' As defined in 
CERCLA Section 101, removal actions include actions to ``prevent, 
minimize, or mitigate damage to the public health or welfare or to the 
environment,'' and remedial actions are ``actions consistent with [a] 
permanent remedy[.]'' Remedial and removal actions are jointly referred 
to as ``response actions.'' CERCLA Section 111 authorizes the use of 
the Hazardous Substance Superfund established under title 26, United 
States Code, to finance response actions undertaken by EPA. In 
addition, CERCLA Section 106 gives EPA \5\ authority to compel action 
by liable parties in response to a release or threatened release of a 
hazardous substance that may pose an ``imminent and substantial 
endangerment'' to public health or welfare or the environment.
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    \4\ Although Congress conferred the authority for administering 
CERCLA on the President, most of that authority has since been 
delegated to EPA. See Exec. Order No. 12580, 52 FR 2923 (Jan. 23, 
1987). The executive order also delegates to other Federal agencies 
specified CERCLA response authorities at certain facilities under 
those agencies' ``jurisdiction, custody or control.''
    \5\ CERCLA Sections 106 authority is also delegated to other 
Federal agencies in certain circumstances. See Exec. Order No. 
13016, 61 FR 45871 (Aug. 28, 1996).
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    CERCLA Section 107 imposes liability for response costs on a 
variety of parties, including certain past owners and operators, 
current owners and operators, and certain generators, arrangers, and 
transporters of hazardous substances. Such parties are liable for 
certain costs and damages, including all costs of removal or remedial 
action incurred by the Federal Government, so long as the costs 
incurred are ``not inconsistent with the national contingency plan'' 
(the National Oil and Hazardous Substances Pollution Contingency Plan 
or NCP).\6\ Section 107 also imposes liability for natural resource 
damages and health assessment costs.\7\
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    \6\ CERCLA Section 107(a)(4)(A).
    \7\ CERCLA Section 107(a)(4)(C)-(D).
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    Section 108(b) establishes authority to require owners and 
operators of classes of facilities to establish and maintain evidence 
of financial responsibility. Section 108(b)(1) directs EPA to develop 
regulations requiring owners and operators of facilities to establish 
evidence of financial responsibility ``consistent with the degree and 
duration of risk associated with the production, transportation, 
treatment, storage, or disposal of hazardous substances.'' In turn, 
Section 108(b)(2) directs that the level of financial responsibility 
shall be initially established, and, when necessary, adjusted, to 
protect against the level of risk that EPA in its discretion believes 
is appropriate based on the payment experience of the Fund, commercial 
insurers, court settlements and judgments, and voluntary claims 
satisfaction. Section 108(b)(2) does not, however, preclude EPA from 
considering other factors in addition to those specifically listed. The 
statute

[[Page 70470]]

prohibited promulgation of such regulations before December 1985.
    In addition, Section 108(b)(1) provides for publication within 
three years of the date of enactment of CERCLA of a ``priority notice'' 
identifying the classes of facilities for which EPA would first develop 
financial responsibility requirements. It also directs that priority in 
the development of requirements shall be accorded to those classes of 
facilities, owners, and operators that present the highest level of 
risk of injury.

B. History of Section 108(b) Rulemakings

1. 2009 Identification of Priority Classes of Facilities for 
Development of CERCLA Section 108(b) Financial Responsibility 
Requirements
    On March 11, 2008, Sierra Club, Great Basin Resource Watch, Amigos 
Bravos, and Idaho Conservation League filed suit in the U.S. District 
Court for the Northern District of California against then EPA 
Administrator Stephen Johnson and then Secretary of the U.S. Department 
of Transportation Mary E. Peters. Sierra Club, et al. v. Johnson, No. 
08-01409 (N. D. Cal.). On February 25, 2009, that court ordered EPA to 
publish the Priority Notice required by CERCLA Section 108(b)(1) later 
that year. The 2009 Priority Notice and supporting documentation 
presented the Agency's conclusion that hardrock mining facilities would 
be the first class of facilities for which EPA would issue CERCLA 
Section 108(b) requirements.\8\ Additionally, the 2009 Priority Notice 
stated EPA's view that classes of facilities outside of the hardrock 
mining industry may warrant the development of financial responsibility 
requirements.\9\ The Agency committed to gather and analyze data on 
additional classes of facilities and to consider them for possible 
regulation. The court later dismissed the remaining claims.
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    \8\ 74 FR 37214 (July 28, 2009).
    \9\ Id. at 37218.
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2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
    On January 6, 2010, EPA published an Advance Notice of Proposed 
Rulemaking (ANPRM) \10\ in which the Agency identified three additional 
industrial sectors for the development, as necessary, of proposed 
Section 108(b) regulation. To develop the list of additional classes 
for the 2010 ANPRM, EPA used information from the CERCLA National 
Priorities List (NPL) and analyzed data from the RCRA Biennial Report 
(BR) and the Toxics Release Inventory (TRI).
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    \10\ 75 FR 816 (Jan. 6, 2010).
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    EPA specifically requested public comment in the 2010 ANPRM on 
whether to propose a regulation under CERCLA Section 108(b) for each of 
the three industries, or any class or classes within those industries, 
including information demonstrating why such financial responsibility 
requirements would or would not be appropriate for those particular 
classes. In addition, the Agency requested information related to the 
industry categories discussed in the ANPRM, including data on facility 
operations, information on past and expected future environmental 
response actions, use of financial responsibility mechanisms by the 
industry categories, existing financial responsibility requirements, 
and other information the Agency might consider in setting financial 
responsibility levels. Finally, EPA requested information from the 
insurance and financial sectors related to instrument availability and 
implementation and to potential instrument conditions.\11\ Comments 
received on the ANPRM are summarized in the Additional Classes 2017 
Notice of Intent to Proceed with Rulemakings, section III.B.4 below.
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    \11\ 75 FR 816, 830-831 (Jan. 6, 2010).
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3. 2014 Petition for Writ of Mandamus
    In August 2014, the Idaho Conservation League, Earthworks, Sierra 
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a 
Better Environment filed a new lawsuit in the U.S. Court of Appeals for 
the District of Columbia Circuit, seeking a writ of mandamus requiring 
issuance of CERCLA Section 108(b) financial assurance rules for the 
hardrock mining industry and for three other industries: Chemical 
manufacturing; petroleum and coal products manufacturing; and electric 
power generation, transmission, and distribution. Thirteen companies 
and organizations representing business interests in the hardrock 
mining and other sectors sought to intervene in the case.
    Following oral argument, the court issued an Order in May 2015 
requiring the parties to submit, among other things, supplemental 
submissions addressing a schedule for further administrative 
proceedings under CERCLA Section 108(b). Petitioners and EPA requested 
an Order from the court with a schedule calling for the Agency to sign 
a proposed rule for the hardrock mining industry by December 1, 2016, 
and a final rule by December 1, 2017. The joint motion also included a 
requested schedule for the additional industry classes, which called 
for EPA to sign by December 1, 2016, a determination on whether EPA 
would issue a notice of proposed rulemaking for classes of facilities 
in any or all of the other industries, and a schedule for proposed and 
final rules for the additional industry classes as follows:

    EPA will sign for publication in the Federal Register a notice 
of proposed rulemaking in the first additional industry by July 2, 
2019, and sign for publication in the Federal Register a notice of 
its final action by December 2, 2020.
    EPA will sign for publication in the Federal Register a notice 
of proposed rulemaking in the second additional industry by December 
4, 2019, and sign for publication in the Federal Register a notice 
of its final action by December 1, 2021.
    EPA will sign for publication in the Federal Register a notice 
of proposed rulemaking in the third additional industry by December 
1, 2022, and sign for publication in the Federal Register a notice 
of its final action by December 4, 2024.\12\
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    \12\ In Re: Idaho Conservation League, No. 14-1149 (D.C. Cir. 
Jan. 29, 2016) (order granting joint motion).

    While the joint motion identified the three additional industries 
as the Chemical Manufacturing industry, the Petroleum and Coal Products 
Manufacturing industry, and the Electric Power Generation, Transmission 
and Distribution industry, and set a rulemaking schedule, the motion 
did not indicate which industry would be the first, second or third. 
The Joint Motion specified that it did not alter the Agency's 
discretion as provided by CERCLA and administrative law.\13\
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    \13\ See Joint Motion at 6 (``Nothing in this Joint Motion 
should be construed to limit or modify the discretion accorded EPA 
by CERCLA or the general principles of administrative law'').
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    On January 29, 2016, the court granted the joint motion and issued 
an order that mirrored the submitted schedule in substance. The order 
did not mandate any specific outcome of the rulemakings.\14\ The order 
can be found in the docket for this rulemaking. The signing of this 
proposed rule by December 4, 2019, will satisfy one component of the 
order.
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    \14\ In granting the Joint Motion, the court expressly stated 
that its Order ``merely requires that EPA conduct a rulemaking and 
then decide whether to promulgate a new rule--the content of which 
is not in any way dictated by the [Order].'' In re Idaho 
Conservation League, at 17 (quoting Defenders of Wildlife v. 
Perciasepe, 714 F.3d 1317, 1324 (D.C. Cir. 2013).
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4. Additional Classes 2017 Notice of Intent To Proceed With Rulemakings
    Consistent with the January 2016 court order, EPA signed on 
December 1, 2016, a determination regarding

[[Page 70471]]

rulemakings for the additional classes--a Notice of Intent to Proceed 
with Rulemakings for all three of the classes. The notice was published 
in the Federal Register on January 11, 2017.\15\
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    \15\ 82 FR 3512 (Jan. 11, 2017).
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    The notice formally announced EPA's intention to move forward with 
the regulatory process and to publish a notice of proposed rulemaking 
for classes of facilities within the three industries identified in the 
2010 ANPRM. The announcement in the notice was not a determination that 
requirements were necessary for any or all of the classes of facilities 
within the three industries, or that EPA would propose such 
requirements. In addition, the notice gave an overview of some of the 
comments received on the 2010 ANPRM and initial responses to those 
comments. The comments on the ANPRM which specifically addressed the 
need for CERCLA Section 108(b) regulation for the three additional 
classes fell into four categories: (1) Other laws with which the 
industry complies that obviate the need for CERCLA Section 108(b) 
regulation; (2) the sources of data that EPA used to select the 
industries; (3) past versus current practices within each industry; and 
(4) the overall need for financial responsibility for each industry. In 
discussing the ANPRM comments in the 2017 notice, the Agency stated its 
intent to use other, more industry-specific and more current sources of 
data to identify risk; to consider site factors that reduce risks, 
including those that result from compliance with other regulatory 
requirements; and to develop a regulatory proposal for each rulemaking.
    At the time of the 2017 notice, EPA had not identified sufficient 
evidence to determine that the rulemaking process was not warranted, 
nor had EPA identified sufficient evidence to establish CERCLA Section 
108(b) requirements. The notice described a process to gather and 
analyze additional information to support the Agency's ultimate 
decision, including further evaluation of the classes of facilities 
within the three industry sectors. The notice stated that EPA would 
decide whether proposing requirements was necessary and, accordingly, 
that EPA would propose appropriate requirements or would propose not to 
impose requirements.
5. CERCLA Section 108(b) Proposal for Facilities in the Electric Power 
Generation, Transmission, and Distribution Industry
    On July 29, 2019, EPA published a notice of proposed rulemaking on 
the first of the three additional industries. In that notice, the 
Agency proposed to not impose financial responsibility requirements for 
the Electric Power Generation, Transmission, and Distribution industry 
and described the analyses and results that were used to reach that 
decision. The court's January 2016 order requires that a final action 
on the first additional industry be signed by December 2, 2020.\16\
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    \16\ 84 FR 36535 (Jul. 29, 2019).
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IV. Statutory Interpretation

    CERCLA Section 108(b) provides general instructions on how to 
determine what financial responsibility requirements to impose for a 
particular class of facility. Section 108(b)(1) directs EPA to develop 
regulations requiring owners and operators of facilities to establish 
evidence of financial responsibility ``consistent with the degree and 
duration of risk associated with the production, transportation, 
treatment, storage, or disposal of hazardous substances.'' Section 
108(b)(2) directs that the ``level of financial responsibility shall be 
initially established and, when necessary, adjusted to protect against 
the level of risk'' that EPA ``believes is appropriate based on the 
payment experience of the Fund, commercial insurers, court settlements 
and judgments, and voluntary claims satisfaction.'' EPA interprets the 
risk to be addressed by financial assurance under Section 108(b) to be 
the risk of the need for taxpayer financed response actions. Read 
together, the statutory language on determining the degree and duration 
of risk and on setting the level of financial responsibility confers a 
significant amount of discretion on EPA.
    Section 108(b)(1) directs EPA to evaluate risk from a selected 
class of facilities, but it does not suggest that a precise calculation 
of risk is either necessary or feasible. Although the cost of response 
associated with a particular site can be ascertained only once a 
response action is required, any financial responsibility requirements 
imposed under Section 108(b) would be imposed before any such response 
action was identified. The statute thus necessarily confers on EPA wide 
latitude to determine, in a Section 108(b) rulemaking proceeding, what 
degree and duration of risk are presented by the identified class.
    Section 108(b)(2) in turn directs that EPA establish the level of 
financial responsibility that EPA in its discretion believes is 
appropriate to protect against the risk. This statutory direction does 
not specify a methodology for the evaluation. Rather, this decision is 
committed to the discretion of the EPA Administrator. While the statute 
provides a list of information sources on which EPA is to base its 
decision--the payment experience of the Superfund, commercial insurers, 
court settlements and judgments, and voluntary claims satisfaction--the 
statute does not indicate that this list of factors is exclusive, nor 
does it specify how the information from these sources is to be used, 
such as by indicating how these categories are to be weighted relative 
to one another.
    EPA believes that Sections 108(b)(1) and (b)(2) are sufficiently 
interrelated that it is appropriate to evaluate the degree and duration 
of risk under paragraph (b)(1) by considering the factors enumerated in 
paragraph (b)(2). EPA therefore concludes that Congress intended the 
risk associated with a particular class of facilities to mean the risk 
of future Fund-financed cleanup actions in that industry. This reading 
is supported by the structure of the statute, as Section 108(b) appears 
between two provisions related to cost recovery. Section 108(a), 
concerning financial assurance requirements for certain vessels, refers 
specifically to cleanup costs. And Section 108(c), concerning recovery 
of costs from guarantors who provide the financial responsibility 
instruments, refers specifically to liability for cleanup costs. EPA 
thus reads ``risk'' in Section 108(b) consistent with its meaning in 
Sections 108(a) and (c); that is, the risk of Fund-financed cleanup. 
EPA adopted this interpretation in assessing the need for financial 
responsibility requirements under CERCLA Section 108(b) for facilities 
in the first class of facilities it evaluated: The hardrock mining 
industry.\17\ In its opinion deciding the challenge to EPA's Final 
Action for the hardrock mining industry, the U.S. Court of Appeals for 
the District of Columbia Circuit held that EPA's interpretation--that 
the provisions of Section 108(b) ``relate only to ensuring against 
financial risks associated with cleanup costs''--is reasonable and 
entitled to deference.\18\
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    \17\ 83 FR 7556, 7561-62 (Feb. 21, 2018).
    \18\ Idaho Conservation League v. Wheeler, No. 18-1141, slip op. 
at 12 (DC Cir. July 19, 2019).
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    For the Petroleum and Coal Products Manufacturing industry, EPA has 
investigated the payment history of the Fund, and enforcement 
settlements and judgments, to evaluate, in the context of this CERCLA 
Section 108(b) rulemaking, the risk of a Fund-financed response action 
at facilities that would be subject to CERCLA financial responsibility

[[Page 70472]]

requirements. The statute also authorizes EPA to consider the existence 
of Federal and state regulatory requirements, including any financial 
responsibility requirements. Section 108(b)(1) directs EPA to 
promulgate financial responsibility requirements ``in addition to those 
under subtitle C of the Solid Waste Disposal Act and other Federal 
law.'' According to the 1980 Senate Report on legislation that was 
later enacted as CERCLA, Congress considered it appropriate for EPA to 
examine those additional requirements when evaluating the degree and 
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duration of risk under what was later enacted as CERCLA Section 108(b):

    ``The bill requires also that facilities maintain evidence of 
financial responsibility consistent with the degree and duration of 
risks associated with the production, transportation, treatment, 
storage, and disposal of hazardous substances. These requirements 
are in addition to the financial responsibility requirements 
promulgated under the authority of Section 3004(6) of the Solid 
Waste Disposal Act. It is not the intention of the Committee that 
operators of facilities covered by Section 3004(6) of that Act be 
subject to two financial responsibility requirements for the same 
dangers.\19\
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    \19\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.

    While the Senate Report mentions RCRA Section 3004(6) specifically, 
it is consistent with congressional intent for EPA to consider other 
potentially duplicative Federal financial responsibility requirements 
when examining the ``degree and duration of risk'' in the context of 
CERCLA Section 108(b) to determine whether and what financial 
responsibility requirements are appropriate. It is also consistent with 
congressional intent for EPA to consider state laws before imposing 
additional Federal financial responsibility requirements.
    Consideration of state laws before developing financial 
responsibility regulations is consistent with CERCLA Section 114(d), 
which prevents states from imposing financial responsibility 
requirements for liability for releases of the same hazardous 
substances after a facility is regulated under Section 108 of CERCLA. 
Just as Congress intended to prevent states from imposing duplicative 
financial assurance requirements after EPA had acted to impose such 
requirements under Section 108, it is reasonable to also conclude that 
Congress did not mean for EPA to disrupt existing state programs that 
are successfully regulating industrial operations to minimize risk, 
including the risk of taxpayer liability for response actions under 
CERCLA, and that specifically include appropriate financial assurance 
requirements under state law. Reviews of both state programs and other 
Federal programs help to identify whether and at what level there is 
current risk that is appropriate to address under CERCLA Section 108.
    EPA also believes that, when evaluating whether and at what level 
it is appropriate to require evidence of financial responsibility, EPA 
should examine information on Petroleum and Coal Products Manufacturing 
facilities operating under modern conditions. In other words, EPA 
should assess the types of facilities to which any new financial 
responsibility regulations would apply. Financial responsibility 
requirements under Section 108(b) would not apply to legacy operations 
that are no longer operating. Rather, any requirements would apply to 
facilities that follow current industry practices and are subject to 
the modern regulatory framework (i.e., the regulations currently in 
place that apply to this industry). These modern conditions include 
state and Federal regulatory requirements and financial responsibility 
requirements that currently apply to operating facilities. This reading 
of Section 108(b) is consistent with statements in the legislative 
history of the statute. The 1980 Senate Report states that the 
legislative language that became Section 108(b) ``requires those 
engaged in businesses involving hazardous substances to maintain 
evidence of financial responsibility commensurate with the risk which 
they present.'' \20\ This approach is also consistent with the analysis 
that EPA undertook in developing its Final Action on Financial 
Responsibility Requirements Under CERCLA Section 108(b) for Classes of 
Facilities in the Hardrock Mining Industry.\21\ EPA's approach was 
recently upheld by the U.S. Court of Appeals for the District of 
Columbia Circuit.\22\
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    \20\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.
    \21\ 83 FR 7556 (Feb. 21, 2018).
    \22\ Idaho Conservation League v. Wheeler, No. 18-1141 (D.C. 
Cir. July 19, 2019).
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    This statutory interpretation is reflected in today's proposal. Any 
financial responsibility requirements imposed under Section 108(b) 
would apply to currently operating facilities. EPA thus sought to 
examine the extent to which hazardous substance management at currently 
operating Petroleum and Coal Products Manufacturing facilities as a 
class continues to present risk. Moreover, the statutory direction to 
identify requirements consistent with identified risks guides EPA's 
interpretation that imposition of financial responsibility requirements 
under Section 108(b) would not be necessary for currently operating 
facilities that present minimal current risk of a Fund-financed 
response action. The interpretation in this proposal does not extend to 
any site-specific determinations of risk made in the context of 
individual CERCLA site responses. Those decisions will continue to be 
made in accordance with preexisting procedures.
    EPA thus examined records of releases of hazardous substances from 
facilities operating under a current regulatory framework and data on 
the actions taken and expenditures incurred in response to such 
releases. The data collected do not reflect historical practices, many 
of which would be illegal under current environmental laws and 
regulations. Instead, EPA has considered current Federal and state 
regulation of hazardous substance production, transportation, 
treatment, storage, or disposal applicable to facilities in the 
Petroleum and Coal Products Manufacturing industry.

V. Approach To Developing This Proposed Rule

    Based on the statutory interpretation described above, EPA 
developed an analytical approach to determine whether the current risk 
under the modern regulatory framework within the Petroleum and Coal 
Products Manufacturing industry rises to the level that warrants 
imposition of financial responsibility requirements under CERCLA 
Section 108(b). Specifically, EPA designed the analytical approach to 
determine the need for financial responsibility for this industry based 
on the degree and duration of risk of a Fund-financed response action 
associated with the industry's production, transportation, treatment, 
storage, or disposal of hazardous substances.
    The approach, described in detail below, looks at risks by 
examining records of releases of hazardous substances from facilities 
in the industry in combination with the payment history of the Fund and 
enforcement settlements and judgments. To enable EPA to base its 
decision on risk posed by facilities operating under modern conditions, 
i.e., the types of facilities to which financial responsibility 
requirements would apply, EPA developed an approach to identify and 
consider relevant state and Federal regulatory requirements and 
financial responsibility requirements that currently apply to operating 
facilities, as well as voluntary protective practices.

[[Page 70473]]

    EPA sought to determine the level of risk of a Fund-financed 
response action at current Petroleum and Coal Products Manufacturing 
operations. Relevant to this decision are requirements of existing 
regulatory programs and voluntary practices, including existing 
financial responsibility requirements, which can reduce costs to the 
taxpayer; EPA's experience with clean-ups in the Petroleum and Coal 
Products Manufacturing industry; and enforcement actions, which may 
reduce the need for Federally-financed response action at facilities in 
the Petroleum and Coal Products Manufacturing industry.
    As part of scoping the Petroleum and Coal Products Manufacturing 
industry for this proposal, EPA sought to understand general 
characteristics of the industry that may be relevant to financial 
responsibility under Section 108(b). To do this, EPA compiled industry 
features, including the types of activities undertaken and wastes 
handled or produced. Additionally, EPA looked at the financial 
condition of the industry to assess the ability of facilities in this 
class to pay for any environmental obligations they may incur. 
Discussion of these aspects of the industry is included in section VI 
of this proposal.
    Section VII.A describes EPA's evaluation of cleanup cases at 
facilities in the Petroleum and Coal Products Manufacturing industry. 
So-called ``cleanup cases'' are sites in the Petroleum and Coal 
Products Manufacturing industry where releases and cleanup actions 
occurred. To perform this evaluation, EPA developed an analytic 
approach that considered cleanup cases to identify risk at currently 
operating facilities and where taxpayer funds were expended for 
response action. EPA first examined each site to determine the nature 
and timing of release. EPA used this information to determine if 
releases occurred under current regulations. As an initial screen, 
releases that occurred prior to 1980 were deemed to be legacy releases 
that occurred before the advent of the modern environmental regulatory 
framework and were therefore screened out of our analysis. Once EPA 
identified those sites with more recent releases occurring under a 
modern regulatory framework, EPA then focused on those response actions 
that were paid for by the taxpayer by looking at those sites with Fund-
financed cleanup activity.
    As described in section VII.B, to understand the modern regulatory 
framework applicable to currently operating facilities within the 
Petroleum and Coal Products Manufacturing industry, EPA compiled 
applicable Federal and state regulations. Specifically, EPA looked to 
regulations that address the types of releases identified in the 
cleanup cases. This review also considered industry voluntary programs 
that could reduce risk of releases. EPA also identified financial 
responsibility regulations that apply to facilities in the Petroleum 
and Coal Products Manufacturing industry in section VII.C, and 
compliance and enforcement history for the relevant regulations in 
section VII.D.
    EPA considered payments from commercial insurers as well, but 
determined that it was not necessary to conduct a detailed analysis of 
this potential information source in light of the analyses of cleanup 
cases and enforcement data. The cleanup cases and enforcement data, in 
addition to addressing the payment experience of the Fund, court 
settlements and judgments, and voluntary claims satisfaction, also 
encompass amounts from commercial insurance payments. For example, at 
one of the Petroleum and Coal Products Manufacturing sites identified 
and reviewed, EPA recovered funds from the potentially responsible 
party's (PRP's) commercial insurers in two separate settlements. 
Furthermore, payments from commercial insurers may have helped finance 
the work conducted by PRPs in the cleanup cases identified or may have 
been included in settlements, judgments, or enforcement cases 
identified by EPA. However, in the event there were significant 
payments from commercial insurers associated with facilities in the 
Petroleum and Coal Products Manufacturing industry that were not 
already indirectly captured, this information would neither indicate 
greater risk to the Fund nor suggest a need for financial 
responsibility requirements under CERCLA Section 108(b).
    In considering how to structure its analysis and what data sources 
to examine, EPA reviewed prior analysis done for selection of industry 
classes in the 2010 ANPRM and public comments responding to EPA's 
approach. In the public comment period for the ANPRM, EPA received a 
total of 67 comments from 30 commenters on the Chemical Manufacturing 
industry, Petroleum and Coal Products Manufacturing industry, and the 
Electric Power Generation, Transmission, and Distribution industry. In 
addition, EPA received five comments to the hardrock mining proposed 
rule that were related to the additional classes of facilities.
    EPA received comments from the American Petroleum Institute, the 
National Petrochemical & Refiners Association, and the American Coke 
and Coal Chemicals Institute, as well as individual refineries. 
Commenters indicated that EPA should concentrate on current practices 
and not legacy contamination. Commenters also said that EPA should not 
impose financial responsibility requirements on facilities that are 
already subject to other Federal laws. One commenter stated that EPA 
should not include waste oil recycling sites, and that oil refineries 
and coke production facilities should be analyzed independently from 
each other. Lastly, many commenters believe that EPA placed too much 
emphasis on TRI data and RCRA BR data and expressed their opinions that 
these data sources are not designed or intended to provide risk-based 
information.
    In its 2017 Notice of Intent to Proceed with Rulemakings,\23\ EPA 
acknowledged limitations on information that can be gained from TRI and 
BR data and announced its intention to use industry-specific and 
current sources of data to identify risk for the purposes of the 
rulemakings. EPA also analyzed those limitations in the Final Action 
for the hardrock mining industry.\24\ Accordingly, in the analysis 
conducted to assess risk in the Petroleum and Coal Products 
Manufacturing industry for this action, EPA chose not to rely on TRI 
and BR data. While, at the time of the 2010 ANPRM, the Agency found 
those data sources appropriate for identifying classes of facilities to 
examine further, the Agency does not find the data sources valuable for 
assessing current risk of a Fund-financed response action in the 
industry.
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    \23\ 82 FR 3512 (Jan. 11, 2017).
    \24\ 83 FR 7570 (Feb. 21, 2018).
---------------------------------------------------------------------------

VI. Petroleum and Coal Products Manufacturing Industry Overview

A. Identification of Petroleum and Coal Products Manufacturing Industry

    For this proposal and the associated analyses, EPA reviewed 
facilities classified under the North American Industry Classification 
System (NAICS) code 324. The most recent available census data lists 
the size of the industry at 2,167 establishments nationally.\25\ The 
Petroleum and Coal Products Manufacturing industry is based on the 
transformation of crude petroleum and coal into usable products. The 
dominant process, as measured by the value of shipments, is petroleum 
refining, which involves the separation of crude petroleum into 
component products through such techniques as cracking

[[Page 70474]]

and distillation. As of 2018, there were 135 operating petroleum 
refineries in the U.S. In 2000, there were 155, indicating that at 
least 20 refineries have closed since the year 2000.\26\ In addition, 
this industry includes establishments that primarily further process 
refined petroleum and coal products to produce products, such as 
asphalt, asphalt roofing materials, coke from coal, and petroleum 
lubricating oils.
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    \25\ 2016 Economic Census of the United States, NAICS 324.
    \26\ CERCLA 108(b) Economic Sector Profile: Petroleum and Coal 
Products Manufacturing Industry.
---------------------------------------------------------------------------

B. Current Industry Practices

    Operational and decommissioning practices in industrial sectors and 
their associated firms can ultimately affect the ability of individual 
firms to responsibly minimize their impact on human health and the 
environment. To consider the potential for releases as part of its 
decision making, EPA prepared a high-level review of industry practices 
and the environmental profile of the Petroleum and Coal Product 
Manufacturing industry, which includes a summary of relevant 
operational and decommissioning materials and wastes in a background 
document, which is available in the docket for this rulemaking.\27\
---------------------------------------------------------------------------

    \27\ Petroleum and Coal Products Manufacturing Industry 
Practices and Environmental Characterization.
---------------------------------------------------------------------------

    Potentially hazardous materials are frequently used in this 
industry. These materials can include sandblast media, fuels, paints, 
spent vehicle and equipment fluids (e.g., lubricating oils, hydraulic 
fluids, battery electrolytes, glycol coolants), among others. Known 
hazardous materials may include, but are not limited to, asbestos or 
mercury containing materials, compressed gases, dielectric fluids, 
boiler bottom ash, and oils. Process fluids can be either hazardous or 
non-hazardous, and can include oily water, spent solvents, chemical 
cleaning rinses, cooling water, wash and makeup water, sump and floor 
discharges, oily water separator fluids, boiler blowdown, and 
acids.\28\ Other materials beyond those listed here may be used in the 
operation of Petroleum and Coal Product Manufacturing facilities.
---------------------------------------------------------------------------

    \28\ EPA 310-R-95-013 Refinery Sector notebook.
---------------------------------------------------------------------------

    Facilities in this industry generate significant amounts of 
hazardous waste,\29\ including but not limited to, primary and 
secondary sludges, spent catalysts, filter clays and cakes, sour water, 
heavy ends (distillation bottoms), dissolved air/nitrogen flotation, 
flotation debris, waste soils, oily sludge, tank bottom sludge, 
clarified slurry oil, slop oil emulsion solids, spent lime, storm water 
silt, catalyst and coke fines, and tank bottoms. Additionally, 
insulating materials (such as asbestos) that are hazardous substances 
must also be managed properly.
---------------------------------------------------------------------------

    \29\ According to the 2017 Hazardous Waste Report, facilities in 
this sector reported the generation of 5.6 million tons of hazardous 
waste. https://rcrapublic.epa.gov/rcrainfoweb/action/modules/br/naics.
---------------------------------------------------------------------------

    Industry practices in certain subsectors, the Petroleum Refineries 
(324110), and Other Petroleum and Coal Products Manufacturing (32419), 
of the Petroleum and Coal Products Manufacturing industry use more 
hazardous substances and/or generate larger volumes of hazardous waste 
than the Asphalt Paving, Roofing and Saturated Material Manufacturing 
(32412), which uses and generates smaller amounts of hazardous 
substances or wastes. Further information on industry practices is 
provided in the background document for this section, which is 
available in the docket for this rulemaking.\30\
---------------------------------------------------------------------------

    \30\ Petroleum and Coal Products Manufacturing Industry 
Practices and Environmental Characterization.
---------------------------------------------------------------------------

    Sites contaminated by the industry typically contain a wide variety 
of contaminants, including but not limited to toxic organics, such as 
benzene, polychlorinated biphenyls (PCBs), phenol, and volatile organic 
hydrocarbons (VOCs); and heavy metals, such as barium, cadmium, 
chromium, copper, lead, selenium, and zinc. Other substances beyond 
those listed here may also have been released. In terms of sources of 
contamination, improper landfill/land disposal issues, as well as 
contaminated soils resulting from process activities, have been the 
most common sources at contaminated sites. Other examples of sources of 
contamination included abandoned units/materials and improper 
wastewater management.
    As outlined in the ANPRM, because refineries tend to be operated 
for decades, there is a long timeframe for potential releases and 
exposure of hazardous substances to occur. In addition, because of 
their need for large amounts of cooling water for operations, 
refineries tend to be located near navigable waterways or on the 
seashore, which likely increases the potential to impact groundwater, 
surface water, aquatic biota, and aquatic vegetation. Other impacts to 
terrestrial vegetation, wetlands, wildlife, soils, air, cultural 
resources, and humans that use these resources recreationally or for 
subsistence also are likely.\31\
---------------------------------------------------------------------------

    \31\ 75 FR 826 (Jan. 6, 2010).
---------------------------------------------------------------------------

    Contamination of soils from the petroleum refining processes is 
generally less significant relative to the contamination of water 
resources.\32\ While soil contamination can occur from leaks or spills 
of spent catalysts or coke dust, tank bottoms, or sludges from the 
treatment processes, many of the residuals produced during the refining 
processes are typically recycled through other stages in the process, 
or collected and disposed of in landfills. Or they may be recovered by 
other facilities.
---------------------------------------------------------------------------

    \32\ https://cfpub.epa.gov/ncer_abstracts/index.cfm/fuseaction/display.files/fileID/14522.
---------------------------------------------------------------------------

    Potential impacts to human health and the environment may include 
large spills that not only contaminate soil and water but may also 
cause devastating explosions and fires. The consequences and associated 
releases from refinery accidents can be significant. To ensure 
immediate responses and to prevent or reduce the likelihood of such 
incidents, the industry is subject to several Federal regulations and 
enforcement oversight under various statutes, as discussed in Sections 
VII.B. and VII.D. below.

C. Industry Economic Profile

    Economic trends and financial health in industrial sectors and 
their associated firms can ultimately affect the ability of individual 
firms to responsibly address their environmental liabilities. 
Circumstances in which firms face financial stress can potentially 
contribute to the abandonment of facilities and the creation of orphan 
waste sites requiring cleanup. To consider the potential for firms to 
default on their financial obligations, EPA prepared a high-level 
economic profile of the Petroleum and Coal Products Manufacturing 
industry, which includes a summary of relevant financial metrics, 
industry default statistics and trends, and a broad discussion 
outlining environmental liabilities under Chapter 11 of the Bankruptcy 
Code. This analysis, summarized in this section, looked at the industry 
as a whole and additionally focused on two subsectors individually, 
providing an industry profile, evaluation of the potential universe of 
regulated entities, and discussion of the subsector's financial health 
and relative volatility. The full analysis is found in the background 
document for this section and is available in the docket for this 
rulemaking.\33\
---------------------------------------------------------------------------

    \33\ CERCLA 108(b) Economic Sector Profile: Petroleum and Coal 
Products Manufacturing Industry.
---------------------------------------------------------------------------

    Generally, this analysis found the sector to be in a relatively 
stable financial position with low default risk. Firms in the industry 
maintain healthy

[[Page 70475]]

credit scores and reasonable levels of debt relative to assets. The 
report did note that despite a generally healthy financial outlook, 
intrinsic market volatility due to exogenous factors (e.g., 
geopolitical unrest) and supply and demand shocks poses an ongoing 
threat to stability. The report also notes that firms generally remain 
liable for environmental compliance obligations under Chapter 11 debt 
restructuring. Sections 101(5) and 1141(d) of the Bankruptcy Code only 
provide for a discharge of monetary rights to payment and not for 
compliance obligations where the Federal government has not sought the 
payment of money. This may serve to temper the impact to the Fund of 
potential future volatility.

VII. Discussion of Cleanup Sites Analysis

A. Cleanup Site Evaluations

    As described in the Approach to Developing the Proposed Rule, 
Section V above, to evaluate the need for financial responsibility 
regulations in the Petroleum and Coal Products Manufacturing industry, 
EPA sought examples of pollution that occurred under a modern 
regulatory framework and that required a taxpayer-funded CERCLA 
cleanup. In its evaluation, EPA focused first on identifying response 
actions at Superfund National Priorities List (NPL) sites and sites 
using the Superfund Alternative Approach (SAA),\34\ as those are 
generally larger cleanups both in terms of amounts of contaminants 
removed and in terms of costs to carry out these cleanups. EPA also 
looked at Superfund removals at non-NPL sites.
---------------------------------------------------------------------------

    \34\ The Superfund Alternative Approach (SAA) uses the same 
CERCLA authority and investigation and cleanup process and standards 
that are used for NPL sites. The threshold criteria for using the 
SAA are: (1) The site must have contamination significant enough to 
make it eligible for listing on the NPL; (2) the site is anticipated 
to need remedial action; and, (3) there must be a cooperative, 
viable, capable PRP that will sign a CERCLA agreement with EPA to 
perform the necessary cleanup.
---------------------------------------------------------------------------

    To identify the relevant cleanup cases in the Petroleum and Coal 
Products Manufacturing industry, EPA included the NPL sites already 
identified in the 2010 ANPRM,\35\ and supplemented the dataset with 
additional NPL sites that had been identified since the ANPRM, sites 
using the SAA, and non-NPL removal sites identified in EPA's Superfund 
Enterprise Management System (SEMS) database. EPA collected information 
on the timing and nature of releases or threatened releases at these 
sites. Specifically, EPA sought to identify, as applicable, facility 
operation end dates, release dates, sources of contamination, NPL 
proposal dates, contaminated media, type of contaminant, cleanup lead, 
and information on Superfund expenditures at the site, as well as other 
information. For this collection, EPA relied on information previously 
collected as part of the ANPRM, information available in Superfund site 
documents (e.g. NPL listing narratives, Records of Decision, Action 
Memos, Five-Year Reviews) and information in EPA's SEMS, as of March 
2018. The cleanup case identification and site information collection 
processes are described in greater detail in the relevant background 
documents, which are available in the docket for this rulemaking.\36\
---------------------------------------------------------------------------

    \35\ 75 FR 816 (Jan.6, 2010).
    \36\ Identification and Evaluation of CERCLA 108(b) National 
Priorities List (NPL) and Superfund Alternative Approach (SAA) 
Cleanup Case Sites Associated with the Petroleum and Coal Products 
Manufacturing Industry and Identification and Evaluation of CERCLA 
108(b) Petroleum and Coal Products Manufacturing Industry non-
National Priorities List (NPL) Removal Sites.
---------------------------------------------------------------------------

    After compiling information about the risks and history of each 
site, EPA sought to identify instances in which releases occurred under 
the modern regulatory framework that resulted in Fund-financed response 
actions. To do so, EPA's methodology applied sequenced screens to the 
identified sites. EPA first screened out any NPL sites or sites using 
the SAA where the contaminant release or cleanup activity occurred 
before 1980. EPA chose 1980 as the cutoff point to initially screen out 
legacy contamination because it was the year when CERCLA was enacted, 
as well as the date of the initial regulations under RCRA Subtitle C 
governing the generation, treatment, storage, and disposal of hazardous 
waste. EPA chose to give these significant RCRA and CERCLA milestones 
the greatest consideration due to the large number of issues of waste 
management, land disposal and soil contamination identified in the 
review of the NPL and SAA cases. EPA believes the 1980 cutoff date is a 
conservative screen (i.e., retains more sites in the analysis) in that 
only the initial RCRA regulations were in place in 1980 and they were 
refined, expanded and enhanced several times over the next decades. 
Moreover, the Agency's enforcement authorities expanded in the 1980s as 
the RCRA program matured. Notably, the passage of the Hazardous and 
Solid Waste Amendments (HSWA) in 1984 resulted in many regulatory 
changes and enhanced enforcement mechanisms. More specifically, HSWA 
created the Land Disposal Restrictions (LDR) program, codified in 40 
CFR part 268, which prohibits the land disposal of untreated hazardous 
wastes. HSWA also substantially expanded corrective action authorities 
for both permitted RCRA treatment, storage and disposal (TSD) 
facilities and facilities operating under interim status,\37\ requiring 
facilities to address the release of hazardous wastes and demonstrate 
financial responsibility for completing the required corrective 
actions, further reducing the risks that sites would have to be 
addressed under CERCLA. For further detail on these requirements, see 
section VII. B below.
---------------------------------------------------------------------------

    \37\ Interim status facilities are facilities that were in 
existence on the effective date of the regulations and subject to 
the requirement to have a RCRA permit. The standards for interim 
status facilities are not as stringent as those for permitted 
facilities.
---------------------------------------------------------------------------

    Next, EPA sought to remove from the analysis sites where 
significant Fund expenditures had not occurred, because response 
actions that were paid for by private parties do not support the need 
for CERCLA Section 108(b) financial responsibility regulations. Using 
the ``Action Lead'' field in SEMS associated with each site, EPA 
screened out the potentially responsible party (PRP) lead sites. This 
left only the Mixed Lead Construction or Government Performed 
Construction sites in the analysis, under the assumption that PRP 
Performed Construction \38\ sites did not present significant expenses 
to the Fund.
---------------------------------------------------------------------------

    \38\ These terms are used in the SEMS database to identify the 
party that had primary responsibility for construction at the sites.
---------------------------------------------------------------------------

    EPA then reviewed the remaining sites (i.e., those with both 
pollution dates of 1980 or later and Mixed Lead Construction or 
Government Performed Construction designation in SEMS) individually in 
greater detail. Specifically, EPA considered the site history and each 
of the contamination sources at the site in the context of the 
regulations that would be applicable to that facility today. More 
information on the regulations EPA considered is available in Section 
VII.B.
    Findings from EPA's analysis of the cleanup cases are discussed 
below, with more detailed information in background documents, which 
are available in the docket for this rulemaking.\39\ These background 
documents provide the list of sites identified and remaining at each 
stage of the analysis, as well as the information considered in the 
screening and review process.
---------------------------------------------------------------------------

    \39\ Identification and Evaluation of National Priorities List 
(NPL) Sites and sites using the Superfund Alternative Approach (SAA) 
Cleanup Cases in the Petroleum and Coal Products Manufacturing 
Industry and Identification and Evaluation of CERCLA 108(b) 
Petroleum and Coal Products Manufacturing non-National Priorities 
List (NPL) Removal Sites.

---------------------------------------------------------------------------

[[Page 70476]]

    Using the data sources described above for the Petroleum and Coal 
Products Manufacturing industry, EPA identified 34 NPL or SAA sites, as 
well as 51 non-NPL CERCLA removal action sites \40\ to evaluate 
according to the methodology described above. As described further 
below, none of the contamination at NPL sites or sites using the SAA 
were ultimately considered incidents that occurred under the modern 
regulatory framework where significant taxpayer funds were relied upon. 
For the removal sites, one of the 51 cases showed releases of hazardous 
substances under a modern regulatory framework and required taxpayer 
expenditures, as described below.
---------------------------------------------------------------------------

    \40\ None of the 51 removal sites are associated with an NPL 
site. Removal actions that have taken place at NPL sites or sites 
using the SAA, either before or after listing or designation, are 
tracked in SEMS as NPL or SAA level actions and not as separate 
removal records.
---------------------------------------------------------------------------

    The 34 NPL and SAA sites evaluated include 23 petroleum refineries, 
nine coke production facilities, and two sites with oil re-refining 
and/or fuel blending operations. At these 34 sites, improper land 
disposal was the most prevalent issue.
    EPA applied the screens described above to remove any PRP-Performed 
Construction sites, as well as any sites where the pollution occurred 
pre-1980, to the 34 NPL and SAA sites. Eight sites remained after those 
screens that were either Government Performed Construction or Mixed 
Lead Construction (i.e., a combination of Government and PRP) sites and 
had at least one source of pollution that arose in 1980 or later. To 
assess those eight sites, EPA conducted a more detailed review to 
compare the environmental issues (e.g., contamination) at the sites 
against the regulations applicable today. Based on the detailed review, 
EPA concluded that the pollution at six of the eight Petroleum and Coal 
Products Manufacturing NPL sites reflect legacy practices. That is to 
say that while the sites had at least one source of pollution that 
arose in 1980 or later, the detailed review of the sites' histories 
concluded that, for six of the eight sites, the pollution arose before 
the RCRA Subtitle C program was fully in place.
    Several of the sites had long operational histories pre-1980 that 
contributed to a portion, if not all, of the pollution. Additionally, 
at most of the sites it was evident that pollution arose prior to 
HSWA's implementation. This is relevant because four of these sites had 
land disposal issues, five of these sites had soil contamination 
resulting from process activities, and four of these sites had 
abandoned hazardous substances at their sites. These sites pre-dated 
the enactment of expanded generator regulations, enhanced land disposal 
unit technical standards, enhanced enforcement provisions (including 
facility-wide corrective action), Land Disposal Restrictions, and the 
Loss of Interim Status deadlines for compliance with groundwater 
monitoring and financial assurance requirements at land disposal 
facilities, and other protections afforded by HSWA that would have 
mitigated these issues. Please see Appendix 4 of the background 
document for an explanation of how the contamination at these six sites 
would now be addressed by regulations in place today.\41\
---------------------------------------------------------------------------

    \41\ Identification and Evaluation of National Priorities List 
(NPL) Sites and Sites using the Superfund Alternative Approach (SAA) 
in the Petroleum and Coal Products Manufacturing Industry.
---------------------------------------------------------------------------

    Regarding the other two of the eight NPL sites that remained after 
the screens, EPA's detailed review indicated that these sites may have 
had releases under the modern regulatory framework. Both sites had 
legacy land disposal issues, due primarily to improper disposal of 
hazardous waste, which contributed significantly to the site's 
requiring a CERCLA action. However, as detailed below, notwithstanding 
a designation of mixed or government lead in SEMS, neither of these two 
sites required a level of taxpayer expenditures high enough to warrant 
imposing financial responsibility on the whole industry.
    The sites, Indian Refinery--Texaco Lawrenceville in Illinois and 
Koch Refining Co. in Minnesota, had Superfund expenditures to date of 
$720,511 and $26,659 (2017 USD), respectively. At the Indian Refinery--
Texaco Lawrenceville site, which operated from 1907 to 1995, various 
owners or operators performed cleanup work at the site starting as 
early as 1983. EPA's primary involvement at the site was oversight of 
two short-term cleanups, or removal actions, prior to the site's 
listing on the NPL in 2000. Issues at the site primarily stemmed from a 
waste disposal area where highly acidic refinery wastes (e.g., lube oil 
filter clay sludge; acid sludge; and spent filter clays) were 
improperly disposed. Waste at the site also migrated offsite, requiring 
cleanup.
    At the Koch Refining Co. site, Koch Refining, a Potentially 
Responsible Party, signed a consent agreement with the State of 
Minnesota for cleanup of the facility under RCRA authority in 1985. 
Issues at the site included persistent seepages from ponds, lagoons, 
and waste piles identified in 1972 as well as leaks, spills, and 
discharges from active and inactive wastewater lagoons, process areas, 
internal pipelines, and waste treatment areas identified in 
investigations conducted between 1986 and 1988. In 1995, EPA deleted 
the site from the National Priorities List, and determined that no 
further action under the Superfund law was needed. The refinery at the 
site is still in operation. The results of the NPL and SAA sites 
analysis is presented in Table 1, below.

                       Table 1--Evaluation Results for NPL and SAA Sites in the Petroleum and Coal Products Manufacturing Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Detailed review identified a   Cases with release(s) under
  Total NAICS 324 NPL &  SAA   Number of NAICS 324 NPL & SAA    Detailed review concluded      possible modern regulation      modern regulation that
       sites evaluated          sites screened out based on   release occurred prior to the    release but no significant     required taxpayer funded
                                pre-1980, or PRP lead status   modern regulatory framework       taxpayer expenditures                response
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        34                             26                              6                              2                             0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Additionally, EPA looked at the removal cases found in the SEMS 
database to supplement this analysis. For this sector, EPA identified 
51 non-NPL removal sites. Applying the same methodology as above, EPA 
screened out 30 sites because the environmental releases occurred 
before 1980 or PRPs led the response action. EPA also excluded an 
additional 12 sites that were deemed outside the scope of this 
rulemaking because the industrial

[[Page 70477]]

activities that resulted in release of hazardous substances were 
neither petroleum refining nor coal products manufacturing. Four other 
sites were left out of the analysis because of insufficient 
documentation to fully conduct the evaluation (i.e., not enough to 
verify whether the sites included pollution attributable to a NAICS 324 
facility, or the nature/date of the releases at the site).
    To assess the five sites that remained after those screens, EPA 
first conducted a detailed review of case files to compare the 
environmental issues at the sites to the regulations applicable today. 
At two of the five removal sites (United Energy in Evanston, Indiana, 
and Browns Island Emergency Response in Weirton, West Virginia), while 
the environmental releases had occurred recently, EPA concluded that 
they had resulted from legacy waste management practices. For instance, 
at the United Energy site, the refinery operations ceased during the 
1970s and the site was abandoned. Though long abandoned, the presence 
of former tars pits and waste oil lagoons, PCB stained soil, and PCB 
oils tanks at the site posed threats to public health and the 
environment, resulting in EPA's removal response in 2012; total Fund 
expenditure reported at this site was $583,000.\42\ Similarly, at the 
Browns Island site, although operations at the former coke by-product 
plant ceased in 1982, a release occurred in March 2008 when 300 gallons 
of liquid organic chemicals (primarily naphthalene) that had been 
stored in an abandoned tank leaked during demolition work. The current 
owner reported the spill to the National Response Center (NRC) and 
subsequently conducted the cleanup activity with EPA's oversight; total 
Fund expenditure reported at this site was $6,700.
---------------------------------------------------------------------------

    \42\ 2012 Action Memorandum--Request for Approval and Funding 
for Removal Action at the United Energy Site, Spencer County, 
Evanston, Indiana.
---------------------------------------------------------------------------

    At two other sites (St. Rose Air Assessment Site in St. Charles 
Parish, Louisiana, and Benicia Valero Refinery in Benicia, California), 
EPA concluded that the releases were caused by a one-time incident 
(malfunctioning of sulfur removal equipment at the former and power 
outage at the latter) which resulted in release of air pollutants 
(e.g., sulfur dioxide, other organic vapors).43 44 Although 
not designated as PRP-lead actions in the SEMS database, according to 
EPA's review of site documents, the PRPs largely financed and performed 
the response actions with oversight of EPA and state agencies. SEMS 
expenditure data show EPA incurred $75,000 in Fund expenditures to 
conduct an air quality monitoring and assessment at the St. Rose site, 
after the state requested assistance from EPA. No Fund expenditures 
were reported at the Benicia site.
---------------------------------------------------------------------------

    \43\ 2017 Pollution Report for Benicia Valero Refinery Site.
    \44\ 2014 and 2015 Pollution Reports for St. Rosa Air 
Assessment.
---------------------------------------------------------------------------

    The remaining removal site was Lake Charles NRG, located in Lake 
Charles, Louisiana. Petroleum refinery operations occurred at this site 
from 1983 to 1999. The refinery operations consisted of processing 
petroleum feedstocks into naphtha, fuel oil, and residual fuel oil. 
Rebel Energy, Inc. constructed the site and began intermittent 
operation in 1983. Following several ownership changes and 
bankruptcies, the site was transferred to NRG in 1998. NRG operated the 
facility for a short time during 1999 and subsequently abandoned it. 
Site assessment beginning in 2000 identified hundreds of storage 
systems (including above-ground tanks, sludge boxes, vessels, and 
drums) and process equipment containing over 200,000 gallons of 
hazardous liquids, solid sludge, and liquid acid.\45\ A subsequent 
visit by EPA also revealed a tank that had failed, and oil was leaking 
from the secondary containment structures.
---------------------------------------------------------------------------

    \45\ 2012 Pollution Report for Lake Charles NRG site.
---------------------------------------------------------------------------

    EPA concludes this site represents a case in which a release or 
threatened release of hazardous substances took place under the modern 
regulatory framework and required taxpayer-funded cleanup. As described 
in more detail in the Role of Federal and State Programs section below, 
the primary regulations governing Above Ground Storage Tanks (ASTs) 
used for storing oil and petroleum products are the Spill Prevention, 
Control, and Countermeasure (SPCC) regulations, 40 CFR 112. These 
regulations have been in place since 1990. Tank systems used to store 
hazardous waste have also been regulated under RCRA (40 CFR parts 264 
and 265) since 1986.\46\ Moreover, according to EPA's records, no 
financially viable PRPs were identified for this site, and SEMS 
expenditure data show that EPA incurred an estimated cost of $2.3 
million for response and enforcement activities.
---------------------------------------------------------------------------

    \46\ 51 FR 25472 (Jul. 14, 1986).
---------------------------------------------------------------------------

    More detailed information can be found in the background document 
\47\ and supporting spreadsheets, which are available in the docket for 
this rulemaking. The background document includes the list of sites 
identified for analysis, as well as the data and information considered 
in the screening and review process. Table 2 presents the summarized 
results of the analysis.
---------------------------------------------------------------------------

    \47\ Identification and Evaluation of CERCLA 108(b) Petroleum 
and Coal Products Manufacturing non-National Priorities List (NPL) 
Removal Sites.

               Table 2--Evaluation Results for Superfund Removal Sites in the Petroleum Refinery and Coke Products Manufacturing Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               Number of NAICS 324 superfund                                  Detailed review identified a   Cases with release(s) under
  Total NAICS 324 superfund     removal  cases screened out     Detailed review concluded      possible modern regulation      modern regulation that
   removal cases evaluated       based on pre-1980, or PRP    release occurred prior to the    release but no significant     required taxpayer funded
                                        lead status            modern regulatory framework       taxpayer expenditures                response
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        51                    30(16) \48\                              2                              2                             1
--------------------------------------------------------------------------------------------------------------------------------------------------------

Petroleum Exclusion
---------------------------------------------------------------------------

    \48\ The number in parentheses indicates the sites that were 
also removed at this stage in the analysis: 12 sites for which EPA 
determined the industrial activities did not involve either 
petroleum refining or coal products manufacturing, and four sites 
for which there was not enough documentation to be included in the 
analysis.
---------------------------------------------------------------------------

    In identifying and reviewing cleanup cases in the Petroleum and 
Coal Products Manufacturing industry, EPA was mindful of the CERCLA 
petroleum exclusion. CERCLA Section 101 excludes petroleum, or any 
fraction thereof, from the statutory definition of a hazardous 
substance unless it is listed

[[Page 70478]]

or designated as a hazardous substance under certain other 
environmental laws, including RCRA. As a result, some releases of 
``petroleum'' are not subject to CERCLA liability or response 
authority.
    Notwithstanding the exclusion, EPA's review of the cleanup sites 
that had petroleum or coal product manufacturing operations identified 
numerous instances in which CERCLA responses were taken. Many of these 
instances pertained to sites where RCRA hazardous wastes had been 
mishandled; these releases were not excluded by the petroleum 
exclusion. In reviewing releases at Petroleum and Coal Products 
Manufacturing sites, EPA was careful to exclude from its analysis 
petroleum releases at sites where CERCLA authority was used to address 
other releases. EPA encountered only one release at an NPL site where 
the petroleum exclusion brought the release's relevance to our analysis 
in question. At this site, the Falcon Refinery site, the release 
occurred from a crude oil storage facility that had been operating over 
a decade after the refinery closed. As such, the release was determined 
to have occurred at a facility which is outside the scope of NAICS 324 
and would better be classified as NAICS 424710--Petroleum Bulk Stations 
and Terminals. Thus, that specific release was excluded from the 
analysis on those grounds.
Prevalent Sources of Releases
    EPA's analysis of cleanup cases compiled information, where 
discernable, on the root cause of releases. Across the industry 
overall, the most prevalent issues were soil and surface water and 
groundwater contamination from unlined or leaking storage tanks, drums, 
surface impoundments, and surface water lagoons, and uncontrolled 
polluted stormwater runoff. Additionally, at NPL sites using the SAA, 
and non-NPL removal sites, abandoned units (e.g., tank farms, drums) 
containing hazardous substances and soil contamination resulting from 
process activities were prevalent sources of contamination. As 
discussed in the next section, there are regulations in place that 
address these types of releases.

B. Role of Federal and State Programs and Voluntary Protective Industry 
Practices at Facilities in the Petroleum and Coal Products 
Manufacturing Industry

    In the 2010 ANPRM, EPA recognized that the NPL data reflects 
releases arising from activity that, in some cases, predates CERCLA, 
RCRA, and other modern environmental requirements. The Agency welcomed 
information about current releases of hazardous substances to the 
environment to help inform EPA's future actions. As discussed in the 
Approach section of this proposal, to enable EPA to base its decision 
on risk posed by facilities operating under modern conditions, i.e., 
the types of facilities to which financial responsibility requirements 
would apply, EPA developed an approach to identify and consider 
relevant state and Federal regulatory requirements and financial 
responsibility requirements that currently apply to operating 
facilities, as well as voluntary protective practices. EPA thus 
undertook an effort to gather information about Federal and state 
environmental programs and industry voluntary programs that have been 
implemented and are applicable to currently operating facilities within 
the Petroleum and Coal Products Manufacturing industry today. EPA 
evaluated the extent to which activities that contributed to the risk 
associated with the production, transportation, treatment, storage, or 
disposal of hazardous substances are now regulated. EPA recognizes that 
substantial advances have been made in the development of 
manufacturing, pollution control, and waste management practices, as 
well as the implementation of Federal and state regulatory programs to 
prevent and address releases at these facilities. In part, EPA's 
proposed decision to not issue financial responsibility requirements 
for this industry is based on EPA's review and analysis of Federal 
regulations and complemented by state program regulations. EPA's 
proposed findings and conclusions about the impact of Federal and state 
environmental programs, along with industry voluntary programs, are 
discussed in the following section.
Overview of Federal and State Regulatory Programs and Industry 
Voluntary Practices Applicable to Facilities in the Petroleum and Coal 
Products Manufacturing Industry
    EPA evaluated Federal and state regulations that address the 
potential for release of hazardous substances to the range of 
environmental media that may be affected by a release from a facility 
in the Petroleum and Coal Products Manufacturing industry. EPA found 
that a comprehensive regulatory framework has developed since the 
enactment of CERCLA. Federal statutes such as the CAA, CWA, TSCA, RCRA, 
and the Emergency Planning and Community Right-to-Know Act (EPCRA) are 
applicable across the entire industry and lay the foundation for this 
regulatory framework. Specific regulations are discussed in the 
background document according to the affected media that the 
regulations address: Air pollution, water pollution, emergency planning 
and response, hazardous substances management, and hazardous and non-
hazardous waste management and disposal. This background document is 
located in the docket for this rulemaking.\49\
---------------------------------------------------------------------------

    \49\ Summary Report: Federal and State Environmental Regulations 
and Industry Voluntary Programs in Place to Address CERCLA Hazardous 
Substances at Petroleum Refineries and Other Petroleum and Coal 
Products Manufacturing Facilities.
---------------------------------------------------------------------------

Regulations Addressing Prevalent Sources of Releases Identified in 
Analysis of Cleanup Cases
    EPA's analysis of the cleanup cases found that the most prevalent 
releases involved:
     Surface and ground water contamination from unlined or 
leaking storage tanks, drums, surface impoundments, and surface water 
lagoons, and uncontrolled polluted stormwater runoff;
     Abandonment and disposal of contaminated soil and debris;
     Improper storage of hazardous waste; and
     Soil and water contamination from spills and hazardous 
substance management practices.
    The comprehensive regulations for the management and disposal of 
hazardous waste, promulgated under the authority of RCRA, were designed 
to prevent these types of releases and assure that past spills are 
cleaned up by facility owners and operators. Specifically, Subtitle C 
of RCRA required EPA to establish a hazardous waste management program, 
and EPA developed a ``cradle to grave'' approach to control the 
generation, transportation, treatment, storage, and disposal of 
hazardous waste.\50\ EPA's regulatory approach under RCRA includes 
standards specific to types of hazardous wastes, types of hazardous 
waste disposal facilities, and types of hazardous waste disposal 
activities; EPA enforces these standards through permitting, reporting 
and inspection programs.\51\
---------------------------------------------------------------------------

    \50\ ``EPA History: Resource Conservation and Recovery Act,'' 
EPA, at: https://www.epa.gov/history/epa-history-resource-conservation-and-recovery-act.
    \51\ ``EPA History: Resource Conservation and Recovery Act,'' 
EPA, at: https://www.epa.gov/history/epa-history-resource-conservation-and-recovery-act; ``Summary of the Resource 
Conservation and Recovery Act,'' EPA, at: https://www.epa.gov/laws-regulations/summary-resource-conservation-and-recovery-act.

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[[Page 70479]]

    In 1980, under the authority of RCRA Subtitle C, EPA promulgated 
the initial hazardous waste management and permitting regulations. 
These regulations included the identification of hazardous wastes that 
would be regulated under RCRA Subtitle C. Under Subtitle C, generators 
of hazardous waste are required to ensure and fully document that the 
hazardous waste they produce is properly identified, managed, tracked, 
and treated prior to recycling or disposal. The degree of regulation to 
which each generator is subject depends to a large extent on how much 
waste each generator produces every calendar month. Early in the 
development of the RCRA program, EPA recognized that a relatively small 
number of industrial facilities generated the majority of the nation's 
hazardous waste. EPA initially focused on these large quantity 
generators, i.e., those that generate 1,000 kilograms or more of non-
acute hazardous waste per month (or more than 1 kilogram of acute 
hazardous waste per month). These facilities must obtain an EPA 
identification number and report the quantities and types of hazardous 
waste they generate, as well as the intended receiving facility for 
treatment and disposal, unless the waste will be managed onsite. Large 
quantity generators who send their waste offsite are responsible for 
the proper packaging and labeling of the waste before transport and the 
tracking of the waste to the destination facility using the uniform 
hazardous waste manifest. Large quantity generators may store their 
waste on site for less than 90 days before transport to a treatment and 
disposal facility; that storage is subject to the same unit-specific 
standards (described below) applicable to treatment, storage, and 
disposal facilities.
    RCRA Subtitle C also established standards for hazardous waste 
treatment, storage, and disposal facilities (TSDFs). Operators that 
handle or manifest hazardous waste at any point in its lifecycle, 
including generators and transporters, are required to notify EPA of 
these activities. To keep track, TSDF owners and operators must keep 
records and make reports to EPA. TSDFs are required to track hazardous 
waste they receive through EPA's hazardous waste manifest system, among 
other recordkeeping and reporting standards.
    RCRA Subtitle C regulations created a permitting program for 
hazardous waste TSDFs. The TSDF permitting regulations include 
application procedures, permit approval conditions, and monitoring and 
reporting requirements. TSDFs must have permits for the entirety of the 
active life of the permitted units, including during closure of waste 
management units. New and existing hazardous waste TSDFs must submit a 
RCRA permit application at least 180 days before the commencement of 
construction and/or hazardous waste management activities.\52\ Both 
permitted and interim status TSDFs must comply with general facility 
operating standards, preparedness and prevention, contingency plans and 
emergency procedures, as well as specific technical standards designed 
to insure that hazardous waste management units such as storage tanks 
and containers, landfill, surface impoundments, waste piles, land 
treatment of hazardous waste, and solid waste management units are 
operated in a manner that prevents releases. To minimize the potential 
for leachate to threaten human health and the environment, EPA 
developed design and operating standards that use a combination of 
different technologies and good operating practices to detect, contain, 
and clean up any leaks that might occur. To prevent releases of 
hazardous waste into the environment, containers holding liquid 
hazardous wastes at a permitted TSDF must have a secondary containment 
system. Secondary containment is emergency short-term storage designed 
to hold leaks from hazardous waste management units.
---------------------------------------------------------------------------

    \52\ 45 FR 33063 (May 19, 1980).
---------------------------------------------------------------------------

    Slightly later in the 1980s, EPA promulgated regulations that set 
financial assurance requirements for TSDFs.\53\ The TSDF standards 
eventually included air emission standards for process vents, equipment 
leaks, tank systems, surface impoundments, and containers. The 
regulations covering proper management of surface impoundments, found 
in 40 CFR parts 264 and 265, Subpart K, require facilities that store 
hazardous waste in surface impoundments to meet specific design 
requirements, which include a double liner system, leachate collection 
and removal systems, and a leak detection system. The regulations for 
containers, found in 40 CFR parts 264 and 265, Subpart I, include 
provisions regarding design and operating requirements, and 
inspections. Certain 40 CFR part 265 standards also apply to hazardous 
waste containers at generator sites.
---------------------------------------------------------------------------

    \53\ 45 FR 33063 (May 19, 1980); 47 FR 15047 (Apr. 7, 1982).
---------------------------------------------------------------------------

    HSWA was enacted in 1984, largely in response to citizen concerns 
that existing methods of hazardous waste disposal, particularly land 
disposal, were not safe. With HSWA, Congress sought to minimize waste 
generation and phase out land disposal of hazardous waste. Accordingly, 
in 1986, EPA promulgated a suite of regulations that established 
standards and restrictions for land disposal of hazardous waste. While 
the regulations set stringent guidelines for the land disposal of 
hazardous waste, some hazardous wastes and some types of land disposal 
are prohibited altogether. Although there are exceptions, operators are 
generally prohibited from diluting hazardous waste as a substitute for 
treatment. In addition, operators can land dispose hazardous waste only 
following treatment and only in appropriate land treatment units, 
landfills and surface impoundments. Further, operators must meet 
testing, removal, recordkeeping, and design requirements. Additional 
standards, restrictions, and prohibitions are in place for hazardous 
waste that exhibited ignitability, corrosivity, reactivity, or 
toxicity.\54\
---------------------------------------------------------------------------

    \54\ 51 FR 40572 (Nov. 7, 1986).
---------------------------------------------------------------------------

    HSWA required that all landfills and surface impoundments install 
groundwater monitoring, comply with technical requirements, such as 
double liners and leachate collection, and obtain financial assurance. 
The HSWA amendments also added to RCRA's regulations for small quantity 
generators, facilities that generated between 100 to 1,000 kilograms 
per month of hazardous waste, which were previously exempt from RCRA 
rules. These small quantity generator rules took effect in 1986. 
Generators of less than 100 kilograms per month of hazardous waste 
(i.e., conditionally-exempt small quantity generators) remained subject 
to significantly reduced requirements.\55\ EPA amended the hazardous 
waste generator provisions in 2016, largely to clarify the 
requirements.\56\
---------------------------------------------------------------------------

    \55\ Id.
    \56\ 81 FR 85732 (Nov. 28, 2016).
---------------------------------------------------------------------------

    HSWA also established closure and post-closure requirements for 
hazardous waste TSDF facilities. The regulations require facilities to 
develop closure plans for all hazardous waste management units. All 
TSDFs are required to prepare and submit written closure plans. A 
permitted facility submits this plan as part of its permit application. 
Once the plan is approved by the permitting agency, it becomes part of 
the facility's operating permit.

[[Page 70480]]

Interim status facilities \57\ must have written closure plans within 
six months of becoming subject to the closure regulations. Upon the 
completion of closure of a hazardous waste disposal unit, owners and 
operators must submit a certification of closure to the relevant state 
or EPA regional office. Following closure, facilities must implement a 
post-closure plan that abides by post-closure property use and care 
guidelines. The standard post-closure care period is 30 years, but this 
can be shortened or extended on a case-by-case basis by the permitting 
authority (i.e., the EPA Region or the authorized state regulatory 
agency). Post-closure notification and security requirements remain in 
place so long as hazardous waste is present at the facility, even after 
the 30-year post-closure period.\58\
---------------------------------------------------------------------------

    \57\ Interim status facilities are facilities that were already 
in existence at the time of the enactment of the permitting 
regulations. Interim status facilities must comply with the 
requirements in 40 CFR part 265 until they receive their permit.
    \58\ 51 FR 16444 (May 2, 1986).
---------------------------------------------------------------------------

    HSWA provided EPA with authority to develop a broader corrective 
action program. Under this program, EPA requires owners and operators 
of facilities that treat, store or dispose of hazardous waste to 
investigate and clean up hazardous releases into soil, groundwater, 
surface water and air, thus reducing the likelihood that these 
facilities would require cleanup under Superfund. RCRA permits issued 
to TSDFs must include provisions for both corrective action and 
financial assurance to cover the costs of implementing those cleanup 
measures. EPA also possesses additional authorities to order corrective 
action through enforcement orders, which are not contingent upon a 
facility's permit. In addition, facilities may voluntarily choose to 
clean up their contamination.
    EPA issued regulations under RCRA Subtitle C that were specific to 
the Petroleum and Coal Products Manufacturing industry in 1980, 1990, 
and 1998. In 1980, EPA classified the following waste from the 
petroleum refining industry as RCRA hazardous waste: Dissolved air 
flotation float; slop oil emulsion solids; heat exchanger bundle 
cleaning sludge; separator sludge; and leaded tank bottoms. In 1990, 
EPA classified the following as RCRA hazardous waste: Petroleum 
refinery primary oil/water/solids separation sludge; and petroleum 
refinery secondary (emulsified) oil/water/solids separation sludge.
    The 1998 regulations categorized four wastes generated during 
petroleum refining operations as hazardous wastes subject to full 
Subtitle C regulation, while opting not to categorize an additional ten 
petroleum refining wastes as hazardous. The wastes that the 1998 rule 
classified as hazardous wastes under RCRA were: Crude oil storage tank 
sediment from petroleum refining operations; clarified slurry oil 
storage tank sediment and/or in-line filter/separation solids from 
petroleum refining operations; spent hydrotreating catalyst from 
petroleum refining operations, including guard beds used to desulfurize 
feeds to other catalytic units; and spent hydrorefining catalyst from 
petroleum refining operations, including guard beds used to desulfurize 
feeds to other catalytic units. The rule also changed RCRA regulations 
to exclude certain oil-bearing residuals from the definition of solid 
waste--such as oil and oil-bearing residuals that petroleum refineries 
insert into the refining process and spent caustic from liquid treating 
operations that are used in chemical production operations--in order to 
promote the recycling of those materials.\59\
---------------------------------------------------------------------------

    \59\ 63 FR 42110 (Aug. 6, 1998).
---------------------------------------------------------------------------

    In addition to Subtitle C requirements, RCRA Subtitle D established 
a program for management and disposal of non-hazardous industrial and 
municipal solid waste through state solid waste management plans that 
conform with Federal guidelines. And RCRA Subtitle I requires EPA to 
promulgate technical standards and corrective action requirements for 
owners and operators of underground storage tanks (USTs), including 
underground storage tanks that contain hazardous substances or 
petroleum products. The UST regulations include requirements for 
design, installation, notification, operational procedures, release 
reporting, release response and corrective action procedures for 
underground storage tank systems that contain petroleum or hazardous 
substances. The regulations also include financial responsibility 
requirements for underground storage tank owners and operators. In 
addition, EPA has established guidelines for the approval of state 
underground storage tank programs.\60\
---------------------------------------------------------------------------

    \60\ 53 FR 37082 and 43322 (Nov. 27, 2018).
---------------------------------------------------------------------------

    In addition to the regulatory scheme that RCRA imposes on the 
management of hazardous waste in underground storage tanks that store 
petroleum products and chemicals, petroleum refineries and coal 
products manufacturing facilities are subject to a number of additional 
regulatory provisions that reduce the potential for a Federally-
financed response action. Catastrophic releases of hazardous substances 
and the use of toxic chemicals and other hazardous substances are 
additional environmental and safety concerns for petroleum refineries 
and coal products manufacturing facilities. Several environmental laws 
authorize regulations requiring the development of response plans for 
various emergencies in order to reduce the effects of a release, and to 
notify local emergency response personnel and facilitate cooperation. 
For example, EPA implements the Chemical Accident Prevention Provisions 
of Section 112(r) of the Clean Air Act Amendments, which require 
certain facilities to generate Risk Management Plans (RMPs) to mitigate 
the effects of a chemical accident and coordinate with local response 
personnel. Emergency Action Plan (EAP) regulations under the 
Occupational Safety and Health Act (OSHA) require that employers 
prepare a written EAP to create practices to follow during workplace 
emergencies. EPA implements regulations under the EPCRA that impose 
emergency planning, reporting, and notification requirements for 
hazardous and toxic chemicals.
    Contamination of surface water is largely addressed by the Clean 
Water Act. The CWA established the National Oil and Hazardous 
Substances Pollution Contingency Plan (NCP), which sets a blueprint for 
responding to oil spills and hazardous substance releases. At its 
inception in 1968, the NCP provided a comprehensive Federal system of 
accident reporting, spill containment, and cleanup of oil spills. In 
1972, the CWA expanded it to include hazardous substance releases.\61\
---------------------------------------------------------------------------

    \61\ ``National Oil and Hazardous Substances Pollution 
Contingency Plan (NCP) Overview,'' at: https://www.epa.gov/emergency-response/national-oil-and-hazardous-substances-pollution-contingency-plan-ncp-overview.
---------------------------------------------------------------------------

    The 1990, Oil Pollution Act amended the CWA and authorized 
regulations requiring facility owners or operators to prepare response 
plans for worst-case scenario oil discharges. In addition, the Oil 
Pollution Prevention Regulations require facilities that store or use 
certain amounts of oil and oil products to develop SPCC Plans to 
prevent the discharge of oil to navigable waters in case of a spill. 
EPA finalized the full suite of amendments to the Oil Pollution 
Prevention Regulation in 2002.\62\
---------------------------------------------------------------------------

    \62\ 40 CFR 112; ``Overview of the Spill Prevention, Control, 
and Countermeasure (SPCC) Regulation,'' EPA, at: https://www.epa.gov/oil-spills-prevention-and-preparedness-regulations/overview-spill-prevention-control-and.

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[[Page 70481]]

State Regulatory Programs
    Some states impose requirements on the Petroleum and Coal Products 
Manufacturing industry in addition to requirements related to Federal 
programs. These stricter or additional standards for emissions, spill 
prevention, emergency preparedness, and hazardous substance management 
on facilities that handle toxic or hazardous chemicals can reduce risk 
at facilities that manage hazardous substances. EPA researched state 
environmental regulations relevant to the Petroleum and Coal Products 
Manufacturing industry for a representative sample of states. A 
discussion of these state regulations, as well as the methodology EPA 
used in selecting the 11 states that it researched, is in a background 
document, which is available in the docket for this rulemaking.\63\
---------------------------------------------------------------------------

    \63\ Summary Report: Federal and State Environmental Regulations 
and Industry Voluntary Programs in Place to Address CERCLA Hazardous 
Substances at Petroleum Refineries and Other Petroleum and Coal 
Products Manufacturing Facilities.
---------------------------------------------------------------------------

    States with significant oil and gas refining and manufacturing 
industries have implemented state regulations applicable to facilities 
that store or use oil and oil-related materials, including petroleum 
refineries and petroleum and coal product manufacturing facilities. For 
example, Alaska has established requirements for owners or operators of 
petroleum production facilities to prevent the discharge of oil; these 
regulations include financial responsibility provisions for oil 
terminal facilities. Alaska also established comprehensive workplace 
safety standards for the petroleum refining industry, including 
standards for process equipment maintenance, equipment leakage, and 
breakage.
Industry Voluntary Practices
    EPA reviewed facility RMPs, industry materials, governmental 
literature, and academic literature to locate voluntary programs that: 
(1) Attempt to address CERCLA hazardous substance management or 
disposal, and release prevention, mitigation, and response; (2) are 
relevant to petroleum refineries and coal products manufacturing 
facilities; and (3) in which petroleum refineries and coal products 
manufacturing facilities participate. Industry voluntary programs fall 
into three categories: Those sponsored by Federal, state or local 
governmental agencies; those fostered within industry associations or 
non-governmental organizations; and those implemented by individual 
firms. These programs set or publish environmental management and 
safety standards that facilities may follow to supplement Federal and 
state requirements with additional standards and may come with a 
certification from the government agency or industry group that 
establishes the standards. Voluntary programs may also serve as forums 
for coordination and collaboration among companies, facilities, and 
government agencies to develop best practice standards and improve 
emergency preparedness. EPA's review of available studies found that 
the industry voluntary programs can be effective at reducing both 
pollution and the frequency of government enforcement actions. A 
discussion of industry voluntary practices, as well as the methodology 
used by EPA, is in a background document, which is available in the 
docket for this rulemaking.\64\
---------------------------------------------------------------------------

    \64\ Id.
---------------------------------------------------------------------------

C. Existing State and Federal Financial Responsibility Programs

    To help inform the level of risk of a Fund-financed response action 
associated with classes of facilities in the Petroleum and Coal 
Products Manufacturing industry, EPA reviewed existing state and 
Federal financial responsibility programs that may be applicable to the 
industry and that cover a wide range of liabilities, including 
liabilities for closure, post-closure care, corrective action, third-
party personal injury/property damage, and natural resource damages. 
EPA focused on these types of financial responsibility programs for two 
reasons. First, these categories of damages, actions, and costs are 
like those that could be covered by CERCLA Section 108(b) rulemaking, 
and thus they help inform the need for CERCLA Section 108(b) financial 
responsibility for this industry. Secondly, the existence of financial 
responsibility requirements can help create incentives for sound 
practices, reducing the risk of releases requiring CERCLA response 
action. EPA also sought to identify state cleanup funds that are at 
least partially funded by industry (e.g., through a tax on hazardous 
wastes generated), and that could cover future CERCLA liabilities that 
may arise at petroleum and coal product manufacturing facilities. EPA's 
report focused on the 25 states reviewed in EPA's reports on existing 
state regulatory and voluntary programs (excluding financial 
responsibility programs) that may be applicable to petroleum and coal 
product manufacturing facilities.
    Finally, EPA reviewed existing financial responsibility 
requirements in the following Federal programs: (1) RCRA Subtitle C 
TSDFs; (2) TSCA commercial PCB waste facilities; and (3) EPA Safe 
Drinking Water Act Underground Injection Control wells. The report is 
available in the docket for this rulemaking.\65\
---------------------------------------------------------------------------

    \65\ Review of Existing Financial Responsibility Laws 
Potentially Applicable to Classes of Facilities in the Petroleum and 
Coal Products Manufacturing Industry.
---------------------------------------------------------------------------

    EPA identified a range of existing financial responsibility 
programs that may be applicable to facilities in the Petroleum and Coal 
Products Manufacturing industry. The programs include the Federal 
programs mentioned above, as well as state programs related to:
     Financial responsibility for used oil processing and re-
refining facilities,
     Financial responsibility for hazardous waste TSDFs,
     Financial responsibility for underground injection of 
hazardous wastes,
     Financial responsibility for storage tanks containing 
hazardous substances,
     Corrective action financial responsibility to address 
hazardous waste or hazardous constituents,
     Facility remediation financial responsibility associated 
with transfer in ownership or facility closure, and
     Other authorities to require financial responsibility to 
assure compliance with orders.
    The applicability of these programs will depend on a variety of 
facility-specific factors, for example, use of a specific piece of 
equipment (e.g., an underground storage tank that contains regulated 
substances) or engaging in a specified activity (e.g., a release of a 
hazardous substance). Furthermore, state financial responsibility 
programs vary by state and some types of financial responsibility 
programs exist only in limited subsets of the states reviewed. EPA 
believes that state and Federal financial responsibility programs help 
reduce risk of a Fund-financed response action at facilities where they 
are applicable. While financial responsibility programs vary in 
structure and function, they may reduce such risk in a myriad of ways. 
For example, they may help ensure undercapitalized firms do not engage 
in environmentally risky enterprises, reduce the incentive to abandon 
properties with extensive contamination, ensure compliance with 
protective requirements, and incentivize better environmental 
practices.

[[Page 70482]]

D. Compliance and Enforcement History

    To understand the experience of court settlements and judgments, 
EPA looked at compliance and enforcement in the Petroleum and Coal 
Products Manufacturing industry. EPA believes that compliance 
assistance, compliance monitoring, and enforcement are important 
components of the regulatory framework discussed above. Through 
inspections, compliance monitoring can identify noncompliance at 
regulated facilities. Enforcement actions may result in legal 
instruments that ensure correction of deficiencies to achieve 
compliance with environmental requirements. Some functions of 
compliance and enforcement actions are particularly pertinent to the 
risk determination for rulemaking under CERCLA Section 108(b). First, 
if noncompliance causes release of a hazardous substances EPA can 
ensure in negotiated agreements that the responsible party carries out 
or pays for the cleanup. Second, enforcement actions can result in 
orders and settlements that compel a responsible party to return to 
compliance. Third, the prospect of financial penalties that can 
accompany these enforcement instruments can encourage compliance. All 
of these functions support the regulatory structure in reducing risk of 
Fund expenditures.
    EPA looked at applicable enforcement authorities as well as 
historical enforcement and compliance data in the development of this 
proposal. EPA obtained data from the EPA Enforcement and Compliance 
History Online (ECHO) system and provides a review of the Federal 
environmental enforcement settlements and judgments data from FY 1974 
through FY 2017.\66\ Facilities whose primary NAICS codes indicate 
Petroleum and Coal Products Manufacturing (NAICS 324) were included in 
EPA's review. ECHO data show that targeted initiatives and routine 
review or inspection of facilities resulted in over 2500 enforcement 
cases in the Petroleum and Coal Products Manufacturing industry from FY 
1974 through FY 2017. CAA (53%) and CWA (18%) cases were the most 
common. There are a smaller number of cases in RCRA (9%), CERCLA (8%), 
EPCRA (6%), and TSCA (4%). Further description of this review is in the 
background document, which is available in the docket for this 
rulemaking.\67\
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    \66\ ECHO does not include all of EPA's compliance and 
enforcement activity because regions are not required to report 
``informal actions,'' and it does not consistently capture all state 
actions.
    \67\ Enforcement, Court Settlements and Judgments in the 
Petroleum and Coal Products Manufacturing Industry.
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    As noted above, the Risk Management Program under Chemical Accident 
Prevention Provisions of Section 112(r) of the Clean Air Act Amendments 
requires certain facilities to generate Risk Management Plans (RMPs) to 
mitigate the effects of a chemical accident and coordinate with local 
response personnel. Assuring compliance with this program has been a 
priority of EPA's Office of Enforcement and Compliance Assurance since 
2017.
    Enforcement cases can include instances in which removal action, 
release reduction, or return to compliance include the removal of 
contaminated media by the responsible party. Measures to remove 
contamination may be required in enforcement orders under the range of 
environmental statutes and are negotiated to require activities aligned 
with return to compliance.\68\ In this situation, enforcement action 
directly reduces risks to human health and the environment. During the 
period FY 2011 through FY 2016, 14 settled Petroleum and Coal Products 
Manufacturing industry enforcement cases were flagged in ECHO as 
involving removal of contaminated media. They are primarily CWA (8 of 
the 14) cases. One Clean Air Act, two RCRA and three CERCLA cases are 
also included.
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    \68\ These ECHO enforcement removals are separate from the 
Superfund removals analyzed elsewhere. ECHO system data includes the 
combined value of total enforcement financial penalties, 
Supplemental Environmental Projects (SEPs), and associated 
compliance activity.
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    The substances removed included metals, hydrocarbons, asbestos, and 
hazardous chemicals. These cleanups resulting from Federal enforcement 
actions mitigated risks to human health and the environment, removing 
contaminated soils, groundwater and a variety of hazardous substances, 
and reduced likelihood of impact to the Fund.
    Settlements and judgments in enforcement cases can result in 
financial penalties, supplemental environmental projects (SEPs), and 
activities required to return to compliance.\69\ Enforcement 
settlements and judgments can ensure that the responsible party 
conducts or pays for cleanup, drive a return to compliance, and 
incentivize compliance.
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    \69\ Compliance actions ordered can include the removal of 
contaminated media, installation of new equipment, or implementation 
of compliant processes.
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    As stated in the cleanup site evaluations in Section VII.A, 
particular consideration was given to CERCLA and RCRA regulations that 
had relevant components which apply to the Petroleum and Coal Products 
Manufacturing industry. There have been over 400 CERCLA and RCRA 
enforcement cases in this industry, beginning in 1981. For context, 
there are approximately 2,167 establishments currently operating in the 
industry. The ten largest CERCLA or RCRA enforcement settlements and 
judgments for the Petroleum and Coal Products Manufacturing industry 
each have 2017 inflation-adjusted total values ranging from over $13 
million to $72 million. Further discussion of the details on the 
Federal actions for these and additional criminal cases can be found in 
the background document for this section and is available in the docket 
for this rulemaking.\70\ This document lists facilities where 
noncompliance was identified and was addressed by means of formal 
Federal enforcement. The background document does not include 
facilities where noncompliance was addressed through informal 
enforcement or facilities where noncompliance was addressed by a state. 
In addition, it does not include facilities where noncompliance was not 
identified, either because those facilities were not inspected or 
because they were inspected and found in compliance.
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    \70\ Enforcement, Court Settlements and Judgments in the 
Petroleum and Coal Products Manufacturing Industry.
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    The compliance and enforcement actions documented here and in the 
background document show that where noncompliance is identified, the 
preponderance of industry responsible parties are conducting or paying 
for cleanups, returning to compliance, and improving public health and 
the environment. Although enforcement actions alone do not completely 
supplant the need for Fund-financed response actions in the Petroleum 
and Coal Products Manufacturing industry (as discussed in section VIII, 
below), effective criminal, civil and judicial enforcement demonstrates 
proper functioning of this component of the modern regulatory 
framework. Enforcement thus serves as a complementary element 
supporting the overall conclusion that CERCLA Section 108(b) financial 
assurance is not necessary.

[[Page 70483]]

VIII. Decision to Not Propose Requirements

    Based on consideration of the analyses described in the previous 
sections, EPA has reached a conclusion that the degree and duration of 
risk posed by the Petroleum and Coal Products Manufacturing industry 
does not warrant financial responsibility requirements under CERCLA 
Section 108(b) and thus is proposing to not issue such requirements. 
The analysis and proposed finding in this proposal are not applicable 
to and do not affect, limit, or restrict EPA's authority (1) to take a 
response action or enforcement action under CERCLA at any facility in 
the Petroleum and Coal Products Manufacturing industry, including any 
currently operating facilities or those described in this proposal and 
in the background documents for this proposal, and (2) to include 
requirements for financial responsibility as part of such response 
action. The set of facts in the rulemaking record related to the 
individual facilities discussed in this proposed rulemaking supports 
the Agency's proposal not to issue financial responsibility 
requirements under Section 108(b) for this class, but a different set 
of facts could demonstrate a need for a CERCLA response action at an 
individual site. This proposed rulemaking also does not affect the 
Agency's authority under other authorities that may apply to individual 
facilities, such as the CAA, CWA, RCRA, and TSCA.
    EPA believes the evaluation of the Petroleum and Coal Products 
Manufacturing industry demonstrates significantly reduced risk of a 
Fund-financed response action at current operations. The reduction in 
risks due to the requirements of existing regulatory programs and 
voluntary practices, combined with reduced costs to the taxpayer--
demonstrated by EPA's cleanup case analysis, existing financial 
responsibility requirements, and enforcement actions--has reduced the 
need for Federally-financed response action at facilities in the 
Petroleum and Coal Products Manufacturing industry. EPA looked at 
current industry practices, market structure and economic performance 
of the industry; analyzed cleanup cases for facilities in the industry; 
and evaluated the extent to which the industry and sources of releases 
are covered by the modern regulatory framework, the degree to which 
taxpayers have been called upon to pay for cleanup, and EPA enforcement 
history in the industry.
    As discussed in section VII.A, EPA identified only one cleanup case 
that occurred under the modern regulatory framework and also entailed 
some Fund expenditure. Overwhelmingly, however, the industry was found 
to be practicing responsibly within the current regulatory framework, 
with just one site indicating a significant impact to the Fund while 
operating under the modern regulatory framework. For context, there are 
approximately 2,167 establishments currently operating in the industry. 
The language in Section 108(b) on determining the degree and duration 
of risk and on setting the level of financial responsibility confers a 
significant amount of discretion on EPA. In the past, some of the risks 
associated with spills resulted from, or were exacerbated by, cleanups 
not being undertaken in a timely fashion. However, under the modern 
regulatory framework, requirements such as the Risk Management Plan 
under the CAA, the Emergency Action Plan under OSHA, and as RCRA 
requirements for TSDFs to detect, contain, and clean up any leaks, 
including facility-wide corrective action, all help to ensure timely 
responses to releases. In addition to the requirements for facilities 
to respond to spills in a timely fashion, the public can alert the 
Federal government to releases by calling the National Response Center 
(NRC), which is a part of the Federally established National Response 
System and staffed 24 hours a day by the U.S. Coast Guard. The NRC is 
the designated Federal point of contact for reporting all oil, 
chemical, radiological, biological and etiological discharges into the 
environment, anywhere in the United States and its territories.
    Only one site (discussed in detail in Section VII.A) had 
significant releases or threatened releases of hazardous substances 
under the modern regulatory framework and required more than minimal 
taxpayer-funded cleanups. Additionally, none of the at least 20 
refineries that have closed since 2000, under the modern regulatory 
framework, had releases that resulted in a more than minimal burden to 
the Fund. It is EPA's assessment that the small set of Federally-funded 
cleanup cases due to recent contamination does not warrant the 
imposition of costly financial responsibility requirements on the 
entire Petroleum and Coal Products Manufacturing industry under CERCLA 
Section 108(b).
    EPA acknowledges that regulations do not always prevent releases, 
and the risk of a release is lessened but never eliminated by existing 
Federal and state environmental regulations. However, EPA believes that 
the network of Federal and state regulations creates a comprehensive 
framework that applies to prevent releases that could result in a need 
for a Fund-financed response action. Numerous Federal programs have 
been established under several environmental statutes since CERCLA was 
enacted on December 11, 1980. These include programs under RCRA, which 
requires proper management and disposal of hazardous waste; under TSCA, 
which regulates the manufacture and sale of chemicals; and under both 
the CWA and the CAA, which address releases to water and air. In 
addition to these Federal programs, some states have stricter or 
additional standards beyond Federal requirements. These Federal and 
state programs are discussed in detail in Section VII. B and in the 
background document, which is available in the docket for this 
rulemaking.\71\
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    \71\ Summary Report: Federal and State Environmental Regulations 
and Industry Voluntary Programs in Place to Address CERCLA Hazardous 
Substances at Petroleum and Coal Products Manufacturing Facilities.
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    In addition, enforcement settlements and judgments that force 
return to compliance are important components of the applicable 
regulatory structure. EPA's analysis of enforcement history shows that 
enforcement of the applicable regulations provides a lever to monitor 
compliance, obtain responsible party cleanups, and recover financial 
penalties. Federal and state regulatory programs, backed up by 
enforcement and complemented by industry voluntary practices, have 
improved public health and the environment significantly since CERCLA's 
initial adoption nearly 40 years ago. EPA believes that within the 
Petroleum and Coal Products Manufacturing industry, this framework 
provides effective controls that protect human health and the 
environment.
    Examination of market structures for the Petroleum and Coal 
Products Manufacturing industry further indicates comparatively low 
likelihood of default on environmental obligations at the expense of 
taxpayers and the government by companies in this industry. This 
economic performance, combined with the low impact to the Fund by 
facilities with releases that happened under the modern regulatory 
framework, suggests that the degree of risk to the Fund by this 
industry does not rise to a level that warrants imposing CERCLA Section 
108(b) financial responsibility requirements.
    For these reasons, EPA is proposing today to not issue financial 
responsibility requirements under CERCLA Section 108(b) for this 
industry.

[[Page 70484]]

A. Solicitation of Public Comment on This Proposal

    EPA solicits comments on all aspects of today's proposal. EPA is 
specifically interested in receiving comments on several issues and 
requests the following information:
     Examples of Petroleum and Coal Products Manufacturing 
industry related response actions for releases which took place under 
the modern regulatory framework where potentially responsible parties 
(PRPs) did not lead the response at the facility.
     Examples of Petroleum and Coal Products Manufacturing 
industry related response actions for releases which took place under 
the modern regulatory framework where PRPs have not taken financial 
responsibility for their environmental liabilities.
     Information on state-lead or other Federal agency cleanups 
or instances of natural resource damages associated with this industry 
that may supplement the information on cleanups gathered and analyzed 
for this proposal.
     Information about existing Federal, state, tribal, and 
local environmental requirements applicable to the Petroleum and Coal 
Products Manufacturing industry relevant to the prevention of releases 
of hazardous substances that were not evaluated as part of this 
proposal.
     Information about financial responsibility requirements 
applicable to the Petroleum and Coal Products Manufacturing industry 
that were not evaluated as part of this proposal.

IX. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is a significant regulatory action that was submitted 
to the Office of Management and Budget (OMB) for review, because it may 
raise novel legal or policy issues [3(f)(4)]. Any changes made in 
response to OMB recommendations have been documented in the docket for 
this rulemaking. EPA did not prepare an economic analysis for the 
proposed rule, since this action proposes no regulatory requirements.

B. Executive Order 13771: Reducing Regulation and Controlling 
Regulatory Costs

    This proposed rule is not subject to the requirements of Executive 
Order 13771 (82 FR 9339, February 3, 2017) because this proposed rule 
would not result in additional cost.

C. Paperwork Reduction Act (PRA)

    This action does not propose an information collection burden under 
the PRA, because this action does not propose any regulatory 
requirements.

D. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. This 
action does not propose any new requirements for small entities.

E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments, because this action does not propose any regulatory 
requirements.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the Federal Government and the states, or on the distribution of power 
and responsibilities among the various levels of government, since this 
action proposes no new regulatory requirements.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications as specified in 
Executive Order 13175, because this action proposes no regulatory 
requirements. Thus, Executive Order 13175 does not apply to this 
action.

H. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    This action is not subject to Executive Order 13045 because it is 
not economically significant as defined in Executive Order 12866, and 
because EPA does not believe the environmental health or safety risks 
addressed by this action present a disproportionate risk to children, 
since this action proposes no regulatory requirements.

I. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution or use of energy, since this action proposes no regulatory 
requirements.

J. National Technology Transfer and Advancement Act

    This rulemaking does not involve technical standards.

K. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    EPA believes that this action is not subject to Executive Order 
12898 because it does not establish an environmental health or safety 
standard, since this action proposes no regulatory requirements.

List of Subjects in 40 CFR Part 320

    Environmental protection, Financial responsibility, Hazardous 
substances, Petroleum.

    Dated: December 4, 2019.
Andrew R. Wheeler,
Administrator.
[FR Doc. 2019-27066 Filed 12-20-19; 8:45 am]
 BILLING CODE 6560-50-P