IOGA of West Virginia AST Developments: Interpretive Rule Adopted & Comments Filed on Draft Emergency Rule

as published in IOGA of West Virginia newsletter, November 2014

On October 21, 2014, the West Virginia Department of Environmental Protection (“WVDEP”) filed with the West Virginia Secretary of State its finalized Interpretive Rule outlining mechanisms for compliance with the imminent deadlines under the Aboveground Storage Tank Act (the “AST Act”), W. Va. Code §§ 22-30-1 et seq., for (1) spill prevention response planning and (2) initial inspection and certification. See 47 C.S.R. 62. The effective date of the Interpretive Rule is November 20, 2014. A copy of the final Interpretive Rule is available for download.

The final Interpretive Rule is very similar to the proposed version of the rule filed on September 9, 2014 for initial public review and comment and discussed in last month’s newsletter article. The rule’s basic structure and approach are unchanged: the final rule retains the proposed three-tiered approach to categorization of ASTs based on their potential harm to health and the environment, and establishes options for compliance with certain requirements of the AST Act based on these levels. Level 1 ASTs are those ASTs determined by WVDEP to have the highest risk of harm to public health or the environment due to their size, location or contents, and therefore these ASTs are subject to the more rigorous requirements of the AST Act for (1) the submittal of Spill Prevention Response (“SPR”) Plans by December 3, 2014 and (2) the inspection and certification of the tanks by January 1, 2015. Because Level 2 ASTs and Level 3 ASTs have been determined to have a reduced potential to harm public health or the environment, the Interpretive Rule establishes alternative options for compliance with these requirements for owners of these tanks.

The agency did make certain changes to the final Interpretive Rule that are worth noting, however.

  • The scope of the “Level 3” category was expanded to include (1) unfiltered surface water and ground water (excluding flowback water from oil and gas wells), (2) empty mobile tanks, and (3) tanks subject to 40 C.F.R. Part 265, exclusive of tanks subject to regulation under 40 C.F.R. § 265.201. See 47 C.S.R. 62-2.4. Corresponding revisions were made to the definition of “Level 1 AST” to expressly exclude such tanks from Level 1 classification, regardless of whether they may be located in a zone of critical concern (“ZCC”). 47 C.S.R. 62-2.2.
  • The definition of “Level 1 AST” was modified to delete the references to “wellhead protection area” and “groundwater intake area under the influence of surface water,” and instead insert the terms “source water protection area” and “surface water influenced groundwater supply source,” both of which are defined terms under the AST Act. 47 C.S.R. 62-2.2; see also W. Va. Code §§ 22-30-3(10) and (15).
  • With respect to SPR Plans, the final Interpretive Rule includes Well Site Safety Plans among the alternative documents that may be submitted or certified to by the owner or operator of a Level 2 or Level 3 AST in lieu of the initial SPR Plan otherwise required to be submitted under W. Va. Code § 22-30-9. 47 C.S.R. 62-4.2 and -4.4 (authorizing submittal of a Well Site Safety Plan or a certification that such plan is current).
  • The alternative options for compliance with the initial SPR Plan deadline for Level 3 ASTs were expanded to be consistent with the options available to owners and operators of Level 2 ASTs (i.e., to authorize the submittal of copies/certifications of Groundwater Protection Plan or Well Site Safety Plan, if applicable). See 47 C.S.R. 62-4.4.

Although the final Interpretive Rule incorporates these additional measures of relief to help facilitate compliance with initial inspection and certification deadlines and SPR Plan requirements, a number of questions and comments submitted during the comment period were either rejected or deferred for future consideration. This has left a number of outstanding questions regarding the interpretation and application of the Interpretive Rule, particularly with regard to the substance of inspections to be performed. Indeed, no modifications or clarifications were made to the substantive standards for tank inspections—which are applicable to all three classes of ASTs—as generally outlined in Appendices A and B of the Interpretive Rule.

It is important to note that the Interpretive Rule was crafted by WVDEP with a very limited purpose—to assist AST owners and operators with attaining compliance with the extremely accelerated compliance deadlines imposed in the AST Act for SPR Plans and initial tank inspections and certifications. Indeed, by its terms, the Interpretive Rule will continue in effect only through June 1, 2015, unless sooner terminated, continued or re-established as a legislative rule. 47 C.S.R. 62-1.5.

Indeed, the many of the key requirements of the new regulatory program for ASTs will be imposed upon the finalization of the agency’s “rough draft” emergency rule (the “Draft Rule”), which is expected to be filed in late December 2014 or January 2015. A copy of the Draft Rule, as updated on October 7 to add a section addressing bonding and financial assurance, can be accessed on WVDEP’s website. IOGA submitted lengthy comments on this initial draft October 24, 2014.

Spanning a total of 89 pages, the Draft Rule is expansive in its scope and would impose new requirements on AST owners and operators.[1] IOGA’s concerns with the Draft Rule are too numerous to list in this article, but the following are among the more critical issues addressed in IOGA’s comments:

  • The Draft Rule would impose substantive standards and requirements for (1) AST design, construction and installation, including ancillary equipment and piping; (2) corrosion and deterioration prevention (specifically addressing cathodic protection systems, and exterior and interior coatings); and (3) release prevention, leak detection and secondary containment. The Draft Rule would require costly upgrades to existing tanks to achieve compliance with (sometimes unclear) minimum standards, and the proposed timeframes for completing these upgrades are likely inadequate. For example, any necessary upgrades to secondary containment structures would be required to be performed within three months of the effective date of the Draft Rule.
  • Despite the Legislature’s mandate to craft a regulatory program that takes into account the varying size, contents and location of the thousands of ASTs in the State, the Draft Rule imposes substantively identical standards on Level 1 ASTs, which have a “high” potential for harm to public health or the environment, and Level 2 ASTs, which pose “reduced” or “low” risk. This “one-size-fits-all” approach contravenes the AST Act and would impose disproportionate costs on many oil and gas operations that otherwise pose a relatively minimal risk of harm.
  • The Draft Rule would significantly expand the scope of the AST Act, as it proposes to regulate “AST systems,” which includes not just the AST, but “its piping and all of its ancillary components, including dispensing systems, spill containment devices, overfill protection devices, secondary containment systems, and any associated release detection equipment.” Further expansion of the statute would occur through the proposed definition of “first point of isolation.” This term, included in the AST Act to identify the “regulatory boundary” of an aboveground storage, is defined in the Draft Rule as “the final termination point . . . of the entire piping run associated with an AST,” and not any intervening valve or gauge capable of stopping flow into or out of the AST. This definition renders many of the Draft Rule’s substantive requirements for “ASTs” completely unworkable in practice.
  • The Draft Rule fails to incorporate the AST Act’s permitting waiver for those ASTs subject to SPCC plans under 40 C.F.R. Part 112 and located outside of a ZCC, a provision that had been expected to provide a measure of relief from some of the statute’s requirements for more remotely located oil and gas industry tanks. Instead, the Draft Rule would establish a program for the issuance of “certificates to operate” (rather than “permits”), and all Level 1 and Level 2 ASTs would be subject to the full suite of regulatory requirements.

IOGA will continue to work diligently to represent the interests of its members as the implementation of the AST Act progresses.