According to an August 11th report by the U.S. Energy Information Administration, crude oil storage fell slightly from 1,150.4 million barrels on July 31, 2015 to 1,148.7 million barrels on August 7, 2015. Although crude levels continue to vary, facilities that are bound by the EPA Facility Response Plan (FRP) requirement must ensure compliance. This is especially true during mergers, acquisitions, and when new storage facilities come online. In response to the potential growth opportunities, numerous U.S. companies are expanding storage capabilities.
- Magellan Midstream Partners and LBC Tank Terminals have a $95 million crude oil storage and transportation project along Houston’s Gulf Coast. The two companies said they will build about 700,000 barrels of new crude oil storage and distribution infrastructure near Seabrook, Texas, about 30 miles southeast of Houston. The new storage will be connected into the area’s existing oil transportation infrastructure by a planned 18-inch diameter pipeline.
- The Louisiana Offshore Oil Port is adding three new above-ground oil tanks and 1.1 million barrels of storage capacity to its Clovelly Hub, one of the nation's largest oil trading and distribution centers. It is expected to be completed by late summer 2016.
- Florida Fuel Connection is investing $75 million to build a petroleum terminal and rail transportation facility near the Mississippi River.
Because a single oil spill can have a significant or catastrophic impact, it is imperative for emergency managers to evaluate response processes for best practices and maintain the most current FRP possible. Storage facilities that meet EPA capacity thresholds and could reasonably cause "substantial harm" to the environment by discharging oil into or on navigable waters, must prepare and submit FRPs. Facilities that could cause "significant and substantial harm" are required to have their plans approved by an EPA Regional Administrator (RA).
According to the FRP rule, a facility may pose "substantial harm" if:
- The site has a total oil storage capacity greater than or equal to 42,000 gallons and it transfers oil over water to/from vessels; or
- The site has a total oil storage capacity greater than or equal to 1 million gallons and meets one of the following conditions:
- Does not have sufficient secondary containment for each aboveground storage area.
- Is located at a distance such that a discharge from the facility could cause "injury" to fish, wildlife, and sensitive environments.
- Is located at a distance such that a discharge from the facility would shut down a public drinking water intake.
- Has had a reportable discharge greater than or equal to 10,000 gallons within the past five years.
If the facility meets the criteria, an FRP is required to be prepared and submitted to the regional EPA office. Once the FRP is submitted to the EPA, the regional administrator (RA) will review and determine if the facility should be classified as a significant and substantial harm facility. If the regional administrator determines that the facility could cause significant and substantial harm, the FRP requires approval by the RA.
Significant and Substantial Harm
An RA determines if a facility could cause significant and substantial harm to the environment by discharging oil into or on the navigable waters and adjoining shorelines. This is determined by factors similar to the substantial harm criteria, as well as:
- The age of tanks;
- Type of transfer operations;
- Oil storage capacity;
- Lack of secondary containment;
- Proximity to fish, wildlife, and sensitive environments or drinking-water intakes;
- Spill history and frequency of past discharges; or
- Other information, including local impacts on public health.
The landscape of growth opportunities may be changing as the Department of Commerce recently announced a partial lift to the 1975 Energy Policy and Conservation Act ban allowing U.S. companies to export domestically produced crude oil to Mexico. However, despite the change or volatility of the oil industry, companies must ensure regulatory compliance remains across their enterprise.