stripper well may be far greater than that generated by other producing
wells and will likely require significant storage container capacity
prior to re-injection or removal from the facility. The Agency agrees
with the comment that stated there may be containers storing produced
water and oil in large quantities (e.g., up to one million gallons) at
oil production facilities qualifying under these alternative criteria.
The Agency has determined that establishing a threshold for the
production rate per well does not limit the amount of oil storage,
including oils in associated fluids.
    The alternative qualified facility eligibility criteria for
production facilities includes more complicated facilities that may
pose a higher risk of oil discharge. EPA intended the alternative
qualified facility criteria for oil production facilities to identify
simple, uncomplicated operations consistent with the approach used for
all other qualified facilities. EPA reconsidered the type and scale of
operations and the equipment involved at those oil production
facilities that may meet the alternative criteria, and concluded that
they are generally more complex than the non-production facilities
eligible under the qualified facility approach in the December 26, 2006
amendments (71 FR 77266).
    Although there may be some similarities across oil production
facilities, each is unique and tailored to address factors, such as the
oil field, production rate, type of fluid, location on a platform or
onshore, fluid viscosity, separation process, and type of water
injection or disposal. Given these factors, an oil production
facility's configuration and degree of complexity is variable,
regardless of flow rate.
    EPA agrees with the comment that stated that a small production
facility is not necessarily less complex than any other oil production
facility. Small oil production operations often require the same
equipment, including pumping well heads, pump jacks, flowlines,
separators, heater-treaters, crude oil and produced water containers,
fittings, headers, valves, electrical lines and electrical motors.
Failure of any of this equipment may cause an oil discharge.
    In the December 2008 amendments, EPA finalized a criterion that
allows the owner or operator of a facility with no more than two
producing wells per single tank battery and an injection well the
option to self-certify his SPCC Plan. After review of relevant facts
and comments, the Agency now has concluded that an oil production
facility with injection wells, regardless of the number of producing
oil wells, is more complex than the intended simplicity inherent in the
qualified facility eligibility criteria. An oil production facility
with injection would have equipment in addition to that found in the
tank battery. One or more injection wells are typically used to inject
produced water underground for disposal or to enhance recovery of the
oil. The underground injection process adds additional piping to the
oil production facility design and layout. The injection well process
typically consists of piping extending from a produced water container
to the injection wellhead, valves, and pumps and may include tank level
indicators, floats, flow controls, and actuators/switches. This
additional equipment offers more opportunity for a potential oil
discharge.
    By setting a maximum number of wells as part of the alternative
eligibility criteria, the Agency intended to increase the likelihood
these wells were co-located with the tank battery or in relatively
close proximity. However, an oil production facility with up to four
wells may have long flowlines. Flowlines and intra-facility gathering
lines may extend for long distances to reach a tank battery, may cross
or be located closer to a navigable waterway or adjoining shorelines
than the tank battery, and often runs over land owned by an entity
other than the owner or operator of the oil production facility. The
Agency has concluded that the criterion that limits the number of wells
does not necessarily restrict the lengths of these lines, particularly
with the amendment to the definition of ``facility,'' which provides
the owner or operator of the facility with flexibility in defining the
oil production facility, such that a formal PE certification and
review, particularly for the flowline and intra-facility gathering line
maintenance program, at these facilities is likely appropriate.
Furthermore, the Agency recognizes that because there is currently no
industry standard for flowline maintenance, the need for a PE to
develop a flowline and intra-facility gathering line maintenance
program in accordance with good engineering practice is even more
significant.
    As EPA stated in the preamble of the December 2006 final rule,
facilities handling smaller amounts of oil are typically simpler in
layout and operation. Most facilities with an oil storage capacity of
10,000 gallons or less are in industrial sectors that are end consumers
of oil (i.e., farms, real estate, rental and leasing, retail trade,
construction). These facilities generally tend to use oil on-site for
heating purposes, or to fuel emergency power generators or heavy
machinery. The configuration of the oil-related equipment tends to be
relatively standard and simple. Oil is commonly stored in a few bulk
storage containers which are often bought off-the-shelf from a tank
manufacturer or installer (e.g., standard UL-142 tanks) and connected
with few short lengths of piping (see December 26, 2006, 71 FR 77270).
This is generally not the case at oil production facilities. Therefore,
for the reasons discussed above, the alternative qualified facility
criteria for oil production facilities finalized in the December 2008
final rule did not achieve the result of limiting the eligibility to
self-certify SPCC Plans to those facilities with simple configurations
and operations.
    The volume of oil discharged from production facilities is
increasing. As described in EPA's study of the oil production sector
(found in the docket for this rulemaking at EPA-HQ-OPA-2007-0584-0015),
there were 401,072 marginal oil wells (i.e., wells producing up to 10
barrels per day) operating in 2005. The percent of marginal oil wells
varies by State, from approximately 15 percent in South Dakota, to 100
percent in several Appalachian and mid-Western States. While individual
production rates may be small (an average of 2.2 barrels per day),
marginal wells collectively represent a significant, and growing, share
of U.S. oil production, due to the overall decline in domestic
production, particularly from onshore fields. Again, as described in
EPA's study of the oil production sector, according to the Department
of Energy, as of 2005, about 19 percent of crude oil produced in the
U.S. came from marginal wells. In the lower 48 States, marginal wells

represented approximately 30 percent of onshore oil production in
2003.\6\
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    \6\ Considerations for the Regulation of Onshore Oil Exploration
and Production Facilities Under the Spill Prevention, Control, and
Countermeasure Regulation (40 CFR part 112)) found in the docket for
this rulemaking at EPA-HQ-OPA-2007-0584-0015, see page 9.
---------------------------------------------------------------------------

    The SPCC regulation is based on oil storage capacity and the
potential for discharges of oil in quantities that may be harmful to
navigable waters or adjoining shorelines. The Agency has concluded that
small oil production facilities (i.e., those comprised of marginal
wells) have and can continue to pose a threat of an oil discharge to
navigable waters or adjoining shorelines. EPA has reviewed the spill
data for the oil production sector contained in its study of the
exploration and production sector (Considerations for the Regulation of
Onshore Oil Exploration and Production Facilities Under the Spill
Prevention, Control, and Countermeasure Regulation (40 CFR part 112))
found in the docket for this rulemaking at EPA-HQ-OPA-2007-0584-0015).
While these data do not characterize the extent of environmental damage
caused by oil discharges from small oil production facilities, they
demonstrate that the volume of oil discharged from onshore oil
production facilities are increasing, and the number of oil discharges
on a yearly basis has remained the same, despite a decline in crude oil
production. In addition, oil production facilities are often
unattended, and typically located in remote areas, which potentially
increases the risk of environmental damage from an oil discharge.
Therefore, the combination of the potential for oil storage capacity
greater than the 10,000 U.S. gallons threshold, identified risk factors
and spill history leads EPA to conclude that these facilities need the
benefit of PE review and certification of their SPCC Plans.
    Furthermore, information received by the Agency from other sources,
which are summarized in the docket in EPA's ``Preliminary Assessment of
SPCC Compliance Costs and Energy Impacts on Oil Production and
Exploration'': Overall Conclusions and Response to Comments (EPA-HQ-
OPA-2007-0584-0173), indicate increased spill potential due to
equipment failure as oil production equipment ages, particularly if
maintenance has been inadequate. Much of the U.S. oil production
infrastructure has been in place for decades. Marginal wells, in
particular, are often older wells nearing the end of their production
life, and may have older equipment that may be more prone to failure.
    EPA recognizes that several comments expressed general support for
the alternative qualified facility eligibility criteria for an oil
production facility. However, upon reconsideration of all relevant
facts, including comments opposing the approach, EPA has decided for
the reasons explained in detail above to remove the provisions related
to alternative qualified facility eligibility criteria for an oil
production facility in the final rule.
3. Exemption for Produced Water Containers
    In this action, EPA is amending or removing all rule elements
associated with the exemption for produced water containers in the
December 2008 amendments (Section V.M.7, 73 FR 74285) as described
below:
     Amending Sec.  112.1 to remove paragraphs (d)(2)(ii)(F)
and (d)(12);
     Amending Sec.  112.3 by removing paragraph (d)(1)(vi) and
designating paragraph (d)(1)(vii) as (d)(1)(vi).
     Amending Sec.  112.5 by removing paragraphs (b) and (c),
revising paragraph (d) to remove reference to deleted paragraphs, and
redesignating paragraphs (d) and (e) as paragraphs (b) and (c);
     Amending Sec.  112.6 by revising paragraphs (a)(1)(vii),
(b)(1)(vii), (b)(3)(iii), and (b)(4)(ii) to remove references to the
produced water container exemption and associated appurtenances
downstream from the container;
     Amending Sec.  112.7 by revising paragraph (a)(3) to
remove reference to produced water containers;
     Amending Sec.  112.9 by revising paragraph Sec.
112.9(c)(6); and
     Revising the reference to produced water containers in
Appendix G--Tier I Qualified Facility SPCC Plan Template.
    EPA is taking this action after reviewing all of the relevant facts
and all of the comments received on this issue for the October 2007
proposed rule (72 FR 58378 October 15, 2007) and the December 2008
amendments (73 FR 74236 and 74 FR 5900 February 3, 2009). Several
comments expressed support for the exemption, with one comment arguing
that regulation of produced water is outside the SPCC rule's
jurisdiction. EPA also received comments that opposed the exemption for
produced water containers. Based on this review, the Agency has
determined that the exemption for produced water containers would not
effectively protect the environment from discharges of quantities of
oil that may be harmful. Comments submitted during the 2009 comment
period also pointed out that the provisions for produced water
containers were confusing and unnecessary, with one comment stating
that the exemption lacked a supportable rationale. Other comments noted
that discharges from produced water containers contain oil, and
discharges occur and can cause harm. These comments are discussed in
more detail below.
    Containers with no oil are not subject to the SPCC rule. The Agency
agrees with comments that a fluid containing no oil is not subject to
the SPCC requirements. A container that does not hold oil is not
regulated under the SPCC rule; therefore, a specific exemption for
produced water containers that holds no oil is unnecessary. However,
EPA notes that generally, produced water containers may contain oil in
sufficient quantity to cause a harmful discharge. In fact, the Agency
received relatively little specific information on whether there are
unique characteristics to differentiate produced water containers from
other bulk storage containers found at onshore oil production
facilities, and none that warrant differentiated treatment.
    Produced water containers typically contain oil. Several comments
expressed support for an exemption of produced water containers from
SPCC regulation. These comments stated that produced water containers
should not be subject to the rule. Most of the comments received,
however, focused on the composition of the produced water mixture and
noted that produced water generally contains varying quantities of oil.
While none of the comments offered detailed information on the amount
of free-phase oil measured in produced water containers as requested by
EPA, they generally confirm that the presence of oil in produced water
is not exceptional, but rather can be expected as a matter of regular
operations at oil production facilities. Oil may be recovered even
after the produced water has undergone several separations at the
onshore production facility, prior to reinjection of the produced water
into the geological formation. Comments point out that produced water
containers have an oil layer floating on top of the water. One comment
indicated that produced water contains about 0.1 percent oil, but did
not indicate whether this fraction represents oil dissolved or
suspended in the produced water mixture and whether produced water
containers may accumulate additional oil as a free-phase layer.
Information received by the Agency from other sources, which are
summarized in the docket (EPA-HQ-OPA-2007-0584-0015 and EPA-HQ-OPA-
2007-0584-0175), indicates that

while the fraction of oil dissolved or suspended within the aqueous
phase may be low, additional oil is often found as a free-phase layer
floating at the surface of the produced water container. In the event
of a discharge, the aqueous phase of the produced water mixture may
serve to carry the oil farther overland and into waters than cases
where crude oil alone is discharged.
    The Agency received no additional data on the efficiency of
separators typically found at onshore oil production facilities or
comments on how the separation efficiency may vary over time. The
Agency agrees that residence time is a key factor in achieving
separation of the crude oil from other well fluids. Many oil production
facilities rely on gravitational separation and long retention times to
separate and recover the crude oil. Based on information reviewed by
the Agency, included in the docket to the rule, separation equipment
found at onshore oil production facilities are not perfectly efficient
at separating oil from the produced fluids and residual oil may remain
with the produced water and further separate in quiescent conditions
present in the produced water container. Furthermore, separation
equipment likely becomes less efficient with age and use, thus allowing
more oil into a produced water container. It is therefore not
exceptional for a layer of oil to accumulate in a produced water
container.
    In some cases, produced water containers are used as part of the
separation process. In the preamble to the December 2008 amendments,
EPA suggested that produced water containers may be similar to flow
through-process equipment when they are used as separators (71 FR
74288, December 5, 2008). However, one comment pointed out that
produced water containers are typically atmospheric storage tanks,
whereas, process vessels have a pressure rating above atmospheric. EPA
agrees with the comment and acknowledges that produced water containers
are typically used as storage containers at the end of the separation
process. Produced water containers are bulk storage containers and,
therefore, are subject to the bulk storage container requirements under
Sec.  112.9(c). However, the Agency acknowledges that owners and
operators of these containers may use a process to remove free-phase
oil on a regular basis. To address this, the Agency is retaining the
option for owners and operators of produced water containers to comply
with alternative measures in lieu of sized secondary containment when a
PE describes in the Plan and certifies a procedure or process to remove
free-phase oil (e.g., a skimming program) has been established and the
facility complies with general secondary containment requirements;
visual inspection; corrective action or repairs to the container; and
prompt removal or remediation of oil discharges from produced water
containers. For a further discussion of the alternative compliance
option for produced water containers, see section V.A.13.f of this
notice.
    Produced water containers are a source of oil discharges. EPA
agrees with comments arguing that spill data shows that produced water
containers are a source of oil discharges from onshore oil production
facilities. The Agency's analysis of spill notification data compiled
by the National Response Center (NRC) for the period of 2000 through
2005, for example, identified 314 oil discharges described as having
originated from tanks, including over a quarter specifically described
as involving produced water containers, compared to 20 percent from
crude oil stock tanks (the remaining 55 percent involved tanks holding
unspecified fluids). The Agency believes that additional discharges may
have been reported to State and local authorities.
    Produced water containers may be equally or even more likely to
fail than other containers in the tank battery. Information reviewed by
the Agency and presented in the public docket (EPA-HQ-OPA-2007-0584-
0015) showed corrosion as a common cause of oil and produced water
discharges at onshore oil production facilities. The higher salt
content of produced water fluids as compared to crude oil may lead to
the increased corrosion rate of metallic components of the produced
water storage system. The oil production process is configured to send
continuously flowing and treated well fluids to the storage containers,
with the produced water containers often located at the end of that
process. The Agency's review of the circumstances of past oil
discharges reported to the NRC shows that produced water containers
often receive the additional well fluids when treatment equipment or
appurtenances fail or when a pumper's scheduled visit is delayed,
thereby increasing the amount of oil entering the produced water
container and the probability that the tank will overflow, or otherwise
discharge oil to navigable waters or adjoining shorelines.
    Discharges of produced water can cause harm. Produced water can
cause harm to surface waters, flora, fauna, and other sensitive
resources and ecosystems. As described in the Summary of DOE Comments
and EPA Response (EPA-HQ-OPA-2007-1486-0175), and the Considerations
for the Regulation of Onshore Oil Exploration and Production Facilities
Under the Spill Prevention, Control, and Countermeasure Regulation (40
CFR part 112) (EPA-HQ-OPA-2007-1486-0015) the impacts of produced water
discharges are similar to the impacts observed following other oil
discharges. Additionally, the co-location of oil production facilities
with other land users, including farmers and ranchers, raises
additional concern over potential contamination of water resources that
are essential to agricultural production. One comment expressed concern
that produced water could contaminate surface waterways, groundwater
and drinking water; kill fish, birds, and wildlife; and cause severe
health effects in humans and impact wildlife habitats. The comment also
noted that it takes only a small amount of oil to affect a large area
of water. EPA agrees with this comment. Under 40 CFR part 110, a
discharge of oil in such quantities as ``may be harmful'' is defined as
one that may violate applicable water quality standards; or cause a
film or sheen upon or discoloration of the surface of the water or
adjoining shorelines; or cause a sludge or emulsion to be deposited
beneath the surface of the water or upon adjoining shorelines. In the
Federal Register notice published when EPA provided revisions to 40 CFR
part 110, EPA stated that ``[e]vidence from reviews of laboratory
studies further demonstrates that very small amounts of oil, e.g., less
than 1 mg/L (1 ppm) can have lethal and sublethal effects on a wide
variety of organisms.'' (52 FR 10716, April 2, 1987). Therefore, even
if a produced water container has a very small amount of oil, the
container still holds the potential to cause harm.
    Upon reconsideration of all relevant facts, including comments
opposing the approach (as described above), EPA has decided for the
reasons explained in detail above to remove the provisions related to
the produced water containers exemption in the final rule.

D. Oil and Natural Gas Pipeline Facilities

    In Section V.M.9 of the December 2008 amendments (73 FR 74291,
December 5, 2008), EPA provided preamble discussion regarding EPA and
DOT jurisdiction. In this notice, EPA is further clarifying the
jurisdiction between EPA and DOT to address confusion within the
regulated community and to note that future inter-Agency discussions in
the appropriate

forum on this issue will continue. The Agency continues to base its
jurisdictional boundaries on Executive Order 12777 and the 1971
Memorandum of Understanding (MOU) between DOT and EPA (36 FR 24080,
November 24, 1971). Under Executive Order 12777, EPA has jurisdiction
over non-transportation-related onshore and offshore facilities and DOT
has jurisdiction over transportation-related onshore and offshore
facilities. Under the 1971 MOU (See Appendix A of part 112),
transportation-related activities regulated by DOT and non-
transportation-related activities regulated by EPA are defined.
    Equipment, operations, and facilities are subject to DOT
jurisdiction when they are engaged in activities subject to DOT
jurisdiction. If those same facilities are also engaged in activities
subject to EPA jurisdiction (such facilities are considered a
``complex''), such activities would subject the equipment, operation,
or facility to EPA jurisdiction, as well. ``Complex'' is defined at
Sec.  112.2 as a ``facility possessing a combination of transportation-
related and non-transportation-related components that is subject to
the jurisdiction of more than one Federal agency under section 311(j)
of the Clean Water Act.'' This definition was promulgated in 1994 (59
FR 34070, July 1, 1994) when EPA first required certain facility owners
and operators to prepare FRPs to respond to a worst-case discharge of
oil and to a substantial threat of such a discharge. During the
development of the FRP rule, EPA and other Federal agencies with
jurisdiction under OPA and E.O. 12777 (including DOT) met to create an
implementation strategy that minimized duplication, wherever
practicable and recognized State oil pollution prevention and response
programs. One of the critical outgrowths of these efforts was the
development of a definition for, and a consistent approach to regulate
``complexes.'' The jurisdiction over a component of a complex is
determined by the activity involving that component. An activity at one
time might subject a facility to one agency's jurisdiction, while a
different activity at the same facility using the same structure,
container or equipment might subject the facility to the jurisdiction
of another agency.
    Owners and operators have questioned how to determine whether a
container (e.g., a breakout tank), an activity (e.g., drag reducing
agent storage/injection or other transfer activities) or a facility
(e.g., a terminal or a pipeline facility) is considered
``transportation-related'' or ``non-transportation-related,'' and,
subsequently, whether DOT and/or EPA regulatory requirements apply. To
clarify jurisdiction, particularly regarding jurisdiction over breakout
tanks and activities at certain facilities, in February 2000, EPA and
DOT signed a joint memorandum, ``Jurisdiction over Breakout Tanks/Bulk
Storage Tanks (Containers) at Transportation-Related and Non-
Transportation-Related Facilities'' (February 4, 2000). Industry has
raised questions and concerns about duplicative jurisdiction in the
joint memorandum and for other oil storage containers and activities
not specifically addressed by it. EPA will continue to work with DOT/
PHMSA to provide such clarification and to minimize dual regulation,
where appropriate.

VI. Statutory and Executive Order Reviews

A. Executive Order 12866--Regulatory Planning and Review

    Under section 3(f)(1) of Executive Order (EO) 12866 (58 FR 51735,
October 4, 1993), this action is an ``economically significant
regulatory action'' because it is likely to have an annual effect on
the economy of $100 million or more. Accordingly, EPA submitted this
action to the Office of Management and Budget (OMB) for review under EO
12866 and any changes made in response to OMB's recommendations have
been documented in the docket for this rulemaking. In addition, EPA
prepared a regulatory impact analysis (RIA) of the potential costs and
benefits associated with this action entitled, ``Regulatory Impact
Analysis for the 2008 and 2009 Final Amendments to the Oil Pollution
Prevention Regulations (40 CFR part 112)'' (October 20, 2009). A copy
of the RIA is available in the docket for this rulemaking and is
briefly summarized below.
    EPA estimated the combined economic impact of the December 2008
amendments and the changes made to it in this action. The SPCC rule
requirements at 40 CFR part 112, as amended in July 2002 (67 FR 47042,
July 17, 2002) is the baseline to estimate the potential cost savings
to regulated facilities associated with these amendments. The RIA
compares the compliance costs for owners and operators facilities
affected by the 2008 and 2009 amendments to the costs associated with
the 2002 SPCC rule revisions. EPA estimated cost savings from the
following rule elements: (1) Exempt hot-mix asphalt (HMA) and HMA
containers; (2) exempt pesticide application equipment and related mix
containers when crop oil or adjuvant oil is added to pesticide
formulations; (3) clarify the applicability of mobile refueler
requirements to farm nurse tanks; (4) exempt residential heating oil
containers, including those located at farms; (5) amend the definition
of ``facility'' to clarify the currently existing flexibility
associated with describing a facility's boundaries; (6) amend the
facility diagram requirement to provide additional clarity; (7) define
``loading/unloading rack''; (8) provide streamlined requirements for a
subset of qualified facilities; (9) amend the general secondary
containment requirement to provide more clarity; (10) extend the
regulatory relief provided to mobile refuelers in 2006 to non-
transportation-related tank trucks at facilities subject to the SPCC
rule; (11) amend the security requirements; (12) amend the integrity
testing requirements to allow a greater amount of flexibility in the
use of industry standards; (13) amend the integrity testing
requirements for containers that store AFVOs that meet certain
criteria; (14) tailor a number of requirements at oil production
facilities; and (15) exempt underground oil storage tanks at nuclear
power generation facilities. EPA also provided clarification in the
preamble to the December 2008 amendments on two additional issues
identified by the regulated community: (1) The consideration of man-
made structures in determining how to comply with the SPCC rule
requirements and (2) the applicability of the rule to wind turbines for
electricity generation.
    For each of these components, excluding those that only provide
clarity, EPA estimated potential cost savings to regulated facilities
that may result from reductions in compliance costs. The main steps
used to estimate the compliance cost impacts of the rule amendments
are:
     Develop the baseline universe of SPCC-regulated
facilities;
     Estimate the number of facilities affected by the rule
amendments;
     Estimate changes in unit compliance cost for each
regulated facility affected by the rule;
     Estimate total compliance cost savings to owners and
operators of potentially affected facilities; and
     Annualize compliance cost savings over a ten-year period,
2010 through 2019, and discount the estimates using three and seven
percent discount rates.
    In its RIA, EPA uses four key assumptions:
    1. Cost minimization behavior applies to all owners and operators
of facilities that qualify for the reduced regulatory requirements,
whereby all those affected would seek burden relief.

    2. Consistent with EPA's guidelines for conducting economic
analyses, all existing owners and operators of facilities are in full
compliance with the July 17, 2002 amendments to the SPCC rule (67 FR
47042).
    3. Owners and operators of existing SPCC-regulated facilities would
forgo compliance activities offered as alternatives where there is only
a one-time initial investment because they would have already incurred
the one-time cost. For example, EPA assumes that an owner or operator
of an existing facility who qualifies for reduced security requirements
under the rule amendment that allows facility owners or operators to
tailor their security measures to the facility's specific
characteristics and location, would have already provided the security
measures under the July 2002 rule amendments or demonstrated
environmental equivalence for tailored security measures. Therefore,
owners and operators of existing facilities would not take advantage of
the provided alternative.
    4. Compliance is nationally consistent, although EPA recognizes
that there is variability in State regulations and the distribution of
affected facilities.
    Exhibit 1 presents the estimated cost savings for each rule
provision and for the rule amendments in total. For several rule
amendments, such as the security requirements and facilities handling
AFVOs, EPA did not have data on the number of affected facilities
within a general industry sector; thus, it developed three scenarios to
evaluate a range of cost savings.\7\ EPA estimates that the total cost
savings for this action is about $95 million on an annualized basis
(2007$). The total cost savings estimates range from a low of about $92
million to a high of about $100 million on an annualized basis
(2007$).These estimates are not necessarily additive, given that they
do not account for interactions that might exist among the various
components of the rule.\8\
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    \7\ For example, to develop a range for the number of affected
AFVO facilities, EPA contacted industry experts who determined that
40 percent to 90 percent of containers at AFVO facilities are made
of stainless steel and almost all containers have bottom drainage.
Therefore, based on professional judgment, the Agency considered
three scenarios: 40% (low), 65% (medium) and 90% (high) of all AFVO
facilities would have food oil tanks that are eligible.
    \8\ Certain industry sectors are affected by multiple rule
provisions. As a result, taking advantage of one revised provision
might preclude a facility from benefiting from another amendment.
The six-month delay is specifically designed to allow time for the
facility oil production operations to stabilize in order to avoid
the need for multiple certifications of the Plan by a PE.
---------------------------------------------------------------------------

    The oil production sector and farms will benefit from multiple
components of the 2008 and 2009 amendments. Specifically, farms will
benefit from the exemption of pesticide application equipment, the
exemption of residential heating oil containers, the clarification to
the facility diagram requirements, the streamlined requirements for
Tier I qualified facilities, the final amendments to the security
requirements, and the amendments to integrity-testing requirements. The
total cost savings to farm owners and operators from these amendments
are estimated at $13 million on an annualized basis (2007$).
    The oil production sector will also benefit from a number of the
revisions to the SPCC rules, including the clarification to the
facility diagram requirements, the streamlined requirements for Tier I
qualified facilities, the six-month delay in SPCC Plan preparation and
implementation, the alternative measures for flow-through process
vessels and produced water containers in lieu of sized secondary
containment requirements. The total savings to owners and operators of
oil production facilities from all of the amendments that affect this
sector are estimated at $35 million on an annualized basis (2007$).

     Exhibit 1--Estimated Compliance Cost Savings for the Regulatory
                               Amendments
------------------------------------------------------------------------
                                   Annualized cost savings ($2007, in
   Rule component/scenario            millions, 7% discount rate)
------------------------------------------------------------------------
Hot-Mix Asphalt:
    Exempt HMA containers....  $8.
Farms:
    Exempt pesticide
     application equipment
     and related mix
     containers
    Applicability of Mobile    $4.
     Refueler Requirements to
     Farm Nurse Tanks.
Residential Heating Oil
 Containers:
    Exempt single-family       $2.
     residential heating oil
     containers.
Definition of Facility:
    Revise the definition of   No cost impact.
     ``facility''.
Facility Diagram:
    Revise facility diagram    $3.
     requirement.
Loading/Unloading Racks:
    Define ``loading/          No cost impact.
     unloading rack''.
Tier I Qualified Facilities:
    Provide streamlined        $24.
     requirements for Tier I
     qualified facilities.
General Secondary
 Containment:
    Revisions to the general   No cost impact.
     secondary containment
     provision.
General Secondary Containment
 for Non-Transportation-
 Related Tank Trucks:
    Extend regulatory relief   No cost impact.
     for mobile refuelers to
     the non-transportation-
     related tank trucks.
Security Requirements:
    Revise security            $9.
     requirements \2\.
Integrity Testing:
    Amend the integrity        $11.
     testing requirements to
     allow a greater amount
     of flexibility in the
     use of industry
     standards at all
     facilities.
Animal Fats and Vegetable
 Oil:
    Amend integrity testing    $2.
     requirements for AFVO
     containers that meet
     certain criteria \3\.
Oil Production Facilities:
    Six-month delay for Plan   $24.
     preparation and
     implementation.
    Exempt flowlines and       No net cost impact.
     gathering lines from
     secondary containment.
    Flow-through process       $7.
     vessels.

    Alternative compliance     No cost savings estimated.
     measures for produced
     water containers.
Man-Made Structures:
    Consider manmade           No cost impact.
     structures in
     determining SPCC rule
     applicability.
Nuclear Power Stations:
    Exempt underground oil     Less than $1.
     storage tanks at nuclear
     power generation
     facilities.
Wind turbines:
    Clarify applicability of   No cost impact.
     the rule to wind
     turbines used to produce
     electricity.
                              ------------------------------------------
        Total................  $95.
------------------------------------------------------------------------
\2\ Mid-point estimate (50% of farms affected). Cost savings might be
  higher or lower using different assumptions.
\3\ Mid-point estimate (65% of facilities affected). Cost savings might
  be lower using different assumptions.

EPA recognizes that the economic analysis is constrained by limited
availability of data and information. The SPCC regulation does not have
a notification requirement for regulated facilities and thus, EPA
relies on State information; Federal and proprietary databases; and
information from industry experts as a basis for the cost information
included in the analysis.

B. Paperwork Reduction Act

    The information collection requirements for this final rule have
been submitted for approval to OMB under the Paperwork Reduction Act,
44 U.S.C. 3501 et seq. The information collection requirements are not
enforceable until OMB approves them. The Information Collection Request
(ICR) document prepared by EPA has been assigned EPA ICR number
0328.15.
    EPA does not collect the information required by the SPCC rule on a
routine basis. SPCC Plans ordinarily need not be submitted to EPA, but
must generally be maintained at the facility. Preparation,
implementation, and maintenance of an SPCC Plan by the facility owner
or operator helps prevent oil discharges to navigable waters or
adjoining shorelines and mitigate the environmental damage caused by
such discharges. Therefore, the primary user of the data is facility
personnel. While EPA may, from time to time, request information under
these regulations, such requests are not routine.
    Although facility personnel are the primary data user, EPA also
uses the data in certain situations. In particular, EPA reviews SPCC
Plans: (1) When it requests a facility owner or operator to submit
required information in the event of certain discharges of oil or to
evaluate an extension request; and (2) as part of EPA's inspection
program. State and local governments also may use the data, which are
not necessarily available elsewhere and can greatly assist local
emergency preparedness efforts. Preparation of the information for
affected facilities is required under section 311(j)(1) of the CWA, as
implemented by 40 CFR part 112.
    EPA estimates that in the absence of the December 2008 final rule
and the changes made in this action, approximately 623,000 existing
facilities would be subject to the SPCC rule in November 2010 and would
be expected to have SPCC Plans. In addition, EPA estimates that
approximately 17,400 new facilities would become subject to the SPCC
requirements during that year, resulting in a total of about 640,000
regulated facilities in 2010.\9\
---------------------------------------------------------------------------

    \9\ To estimate the number of SPCC-regulated facilities in 2010,
EPA used the estimated number of facilities for 2005 (571,000) and
applied annual, industry-specific growth rates that resulted in
about 640,000 facilities.
---------------------------------------------------------------------------

    Under the December 2008 and 2009 amendments, EPA is: exempting the
storage capacity of containers solely containing HMA, residential
heating oil containers at single-family residences, pesticide
application equipment and related mix containers, and underground oil
storage tanks at nuclear power generation facilities from the SPCC
requirements; amending the definition of ``facility'' to clarify that
contiguous or non-contiguous buildings, properties, parcels, leases,
structures, installations, pipes, or pipelines may be considered
separate facilities, and to specify that the ``facility'' definition,
rather than the ``production facility'' definition, governs the
applicability of 40 CFR part 112; amending the facility diagram
requirement to provide additional clarity for all facilities; providing
a definition for the term ``loading/unloading rack,'' which determines
whether a facility is subject to the provisions at Sec.  112.7(h);
providing an option that allows a subset of qualified facilities (Tier
I) to complete and implement an SPCC Plan template (Appendix G to 40
CFR part 112) in order to comply with the SPCC rule requirements;
amending the general secondary containment requirements to provide more
clarity; exempting non-transportation-related tank trucks from the
sized secondary containment requirements; modifying the security
requirements to allow an owner or operator to tailor its security
measures to the facility's specific characteristics and location, which
are the same as those provided for qualified facilities, as promulgated
in December 2006; replacing the current integrity testing requirements
with the requirements provided for qualified facilities, as promulgated
in December 2006; providing flexibility in the rule for determining the
scope of integrity testing that is appropriate for containers that
store AFVOs that are intended for human consumption and that meet other
criteria; and finally, streamlining the requirements for oil production
facilities by modifying the definition of production facility to be
consistent with the amendments to the definition of facility, extending
the timeframe by which a new oil production facility must prepare and
implement an SPCC Plan, providing an alternative option for flow-
through process vessels at oil production facilities to comply with the
general secondary containment requirements and additional oil spill
prevention measures in lieu of the sized secondary containment
requirements, providing an alternative option for produced water
containers to comply with general secondary containment and additional
oil spill prevention measures including a PE certified program to
remove free-phase oil from the surface of the produced water container
in lieu of the sized secondary containment requirements, establishing
more specific requirements for the flowline/intra-facility gathering
line maintenance program, providing an alternative compliance option
for contingency planning in lieu of secondary containment for flowlines
and intra-facility gathering lines at oil production facilities,
providing an exemption for certain intra-facility

gathering lines that are regulated by DOT, and clarifying the
definition of ``permanently closed'' as it applies to an oil production
facility.
    Under the 2008 and 2009 final amendments, an estimated 640,000
regulated facilities are subject to the SPCC information collection
requirements of this rule in 2010.\10\ The Agency estimates that as a
result of these amendments to tailor, clarify, and streamline certain
SPCC requirements, the reporting and recordkeeping burden would
decrease by approximately 1.3 million hours. The rule amendments would
reduce capital and operation and management costs by approximately $7.5
million on an annualized basis. Burden is defined at 5 CFR 1320.3(b).
---------------------------------------------------------------------------

    \10\ To estimate the number of SPCC-regulated facilities in
2010, EPA used the estimated number of facilities for 2005 (571,000)
and applied annual industry-specific growth rates.
---------------------------------------------------------------------------

    An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is
approved by OMB, the Agency will publish a technical amendment to 40
CFR part 9 in the Federal Register to display the OMB control number
for the approved information collection requirements contained in this
final rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act generally requires an agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedure
Act or any other statute unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities. Small entities include small businesses, small organizations,
and small governmental jurisdictions.
    For purposes of assessing the impacts of this final rule on small
entities, a small entity is defined as: (1) a small business as defined
in the U.S. Small Business Administration's (SBA) regulations at 13 CFR
121.201--the SBA defines small businesses by category of business using
North American Industry Classification System (NAICS) codes, and in the
case of farms and oil production facilities, which constitute a large
percentage of the facilities affected by this rule, generally defines
small businesses as having less than $0.5 million to $27.5 million per
year in sales receipts, depending on the industry, or 500 or fewer
employees, respectively; (2) a small governmental jurisdiction that is
a government of a city, county, town, school district or special
district with a population of less than 50,000; and (3) a small
organization that is any not-for-profit enterprise that is
independently owned and operated and is not dominant in its field.
    After considering the economic impacts of the December 2008
amendments and the changes made in this action on small entities, the
Agency certifies that this action would not have a significant economic
impact on a substantial number of small entities. In determining
whether a rule has a significant economic impact on a substantial
number of small entities, the impact of concern is any significant
adverse economic impact on small entities, since the primary purpose of
the regulatory flexibility analyses is to identify and address
regulatory alternatives ``which minimize any significant economic
impact of the rule on small entities'' (5 U.S.C. 603 and 604). Thus, an
agency may certify that a rule would not have a significant economic
impact on a substantial number of small entities if the rule relieves
regulatory burden, or otherwise has a positive economic effect on all
of the small entities subject to the rule.
    Under the 2008 and 2009 amendments, the following issues are
addressed: exempt HMA and HMA containers, pesticide application
equipment and related mix containers, residential heating oil
containers at single-family residences, and underground oil storage
tanks at nuclear power generation facilities from the SPCC
requirements; amend the definition of ``facility'' to clarify the
flexibility associated with the existing definition in describing a
facility's boundaries; clarify how containers, fixed and mobile, are
identified on the facility diagram; define ``loading/unloading rack''
to clarify whether a facility is subject to the SPCC rule requirements
of Sec.  112.7(h); streamline the requirements for a subset of
qualified facilities (Tier I qualified facilities); amend the general
secondary containment requirements to provide more clarity; exempt non-
transportation-related tank trucks from the sized secondary containment
requirements; amend the facility security requirements to allow an
owner or operator to tailor security measures to a facility's specific
characteristics and location, which are the same as those provided for
qualified facilities, as promulgated in December 2006; replace the
current integrity testing requirements with the regulatory requirements
for a qualified facility promulgated in December 2006; provide
flexibility in the rule to determine the scope of integrity testing
that is appropriate for containers that store AFVOs that are intended
for human consumption and that meet other criteria; and initiate a
number of amendments to tailor the requirements for oil production
facilities to address concerns raised by the oil production sector,
respectively.
    Overall, EPA estimates that the December 2008 amendments and the
revisions made in this action will reduce annual compliance costs by
approximately $95 million on an annualized basis (2007$) for owners and
operators of affected facilities. Total costs were annualized over a
10-year period using a seven percent discount rate. EPA derived these
savings by estimating the number of facilities affected by each 2008
and 2009 amendment; identifying the specific behavioral changes that
may occur (for example, choosing to prepare an SPCC Plan template
instead of a full SPCC Plan); estimating the unit costs of compliance
under the baseline and amended scenarios; and applying the change in
unit costs to the projected number of affected facilities.
    EPA has therefore concluded that this rule will relieve regulatory
burden for small entities and therefore, certify that this rule will
not have a significant economic impact on a substantial number of small
entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to state, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to

adopt an alternative other than the least costly, most cost-effective,
or least burdensome alternative if the Administrator publishes with the
rule an explanation why that alternative was not adopted.
    Before EPA establishes any regulatory requirements that may
significantly or uniquely affect small governments, including tribal
governments, it must have developed under section 203 of UMRA a small
government agency plan. The plan must provide for notifying potentially
affected small governments, enabling officials of affected small
governments to have meaningful and timely input in the development of
EPA regulatory proposals with significant Federal intergovernmental
mandates, and informing, educating, and advising small governments on
compliance with the regulatory requirements.
    EPA has determined that this action does not contain a Federal
mandate that may result in expenditures of $100 million or more for
State, local, and tribal governments, in the aggregate, or the private
sector in any one year. The December 2008 final rule and the changes
made in this action would reduce compliance costs on owners and
operators of affected facilities by approximately $95 million on an
annualized basis (2007$), although EPA acknowledges this total estimate
is derived from analyses of individual major components of the rule
that are not necessarily additive, given that they do not account for
interactions that may exist among the various components. Thus, this
rule amendment is not subject to the requirements of sections 202 and
205 of the UMRA.
    EPA has determined that this rule amendment contains no regulatory
requirements that might significantly or uniquely affect small
governments. As explained above, the effect of the rule amendment will
be to reduce burden for facility owners and operators, including
certain small governments that are subject to the rule.

E. Executive Order--13132 Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
    The December 2008 amendments and the changes made in this action do
not have federalism implications. It would not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government, as specified
in Executive Order 13132. Under CWA section 311(o), States may impose
additional requirements, including more stringent requirements,
relating to the prevention of oil discharges to navigable waters or
adjoining shorelines. EPA recognizes that some States have more
stringent requirements (56 FR 54612, October 22, 1991). This rule
amendment will not preempt State law or regulations. Thus, Executive
Order 13132 does not apply to this action.

F. Executive Order 13175--Consultation and Coordination With Indian
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This action does not have
tribal implications, as specified in Executive Order 13175. This rule
amendment will not significantly or uniquely affect communities of
Indian trial governments. Thus, Executive Order 13175 does not apply to
this action.

G. Executive Order 13045--Protection of Children From Environmental
Health Risks and Safety Risks

    Executive Order 13045, ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that: (1) is determined to be ``economically significant''
as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children. If the regulatory action
meets both criteria, the Agency must evaluate the environmental health
or safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
    Although the combined impact of the December 2008 final rule and of
the changes made in this action is economically significant, it is not
subject to the Executive Order because the Agency does not have reason
to believe the environmental health or safety risk addressed by this
action presents a disproportionate risk to children.

H. Executive Order 13211--Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This action is not a ``significant energy action'' as defined in
Executive Order 13211, ``Actions Concerning Regulations that
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR
28355, May 22, 2001) because it is not likely to have a significant
adverse effect on the supply, distribution, or use of energy. The
overall effect of the action is to decrease the regulatory burden on
facility owners or operators subject to its provisions.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards, such as materials specifications, test
methods, sampling procedures, and business practices that are developed
or adopted by voluntary consensus standards bodies. The NTTAA directs
EPA to provide Congress, through OMB, explanations when the Agency
decides not to use available and applicable voluntary consensus
standards.
    The owner or operator of a facility subject to the SPCC rule has
the flexibility to consider applicable industry standards in the
development of an SPCC Plan, in accordance with good engineering
practice. However, this rulemaking does not involve technical
standards, as it does not set or incorporate by reference any one
specific technical standard. Therefore, the NTTAA does not apply.

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

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes
Federal executive policy on environmental justice. Its main provision
directs Federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high

and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States. EPA has determined that this action
will not have disproportionately high and adverse human health or
environmental effects on minority or low-income populations because it
does not affect the level of protection provided to human health or the
environment. The overall effect of the action is to decrease the
regulatory burden on facility owners or operators subject to its
provisions, while increasing the level of compliance with the SPCC
program requirements, which should provide greater environmental
protection.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is a ``major rule'' as defined by 5 U.S.C. 804(2)
because it will likely result in an annual effect on the economy of
$100 million or more. This rule will be effective on January 14, 2010.

List of Subjects in 40 CFR Part 112

    Environmental protection, Animal fats and vegetable oils, Hot-mix
asphalt, Farms, Flammable and combustible materials, Integrity testing,
Loading racks, Materials handling and storage, Natural gas, Oil
pollution, Oil and gas exploration and production, Oil spill response,
Oil spill prevention, Penalties, Petroleum, Reporting and recordkeeping
requirements, Secondary containment, Security, Tanks, Unloading racks,
Water pollution control, Water resources.

    Dated: November 5, 2009.
Lisa P. Jackson,
Administrator.

0
For the reasons stated in the preamble, title 40, chapter I, of the
Code of Federal Regulations is amended as follows:

PART 112--OIL POLLUTION PREVENTION

0
1. The authority citation for part 112 continues to read as follows:

    Authority: 33 U.S.C. 1251 et seq.; 33 U.S.C. 2720; and E.O.
12777 (October 18, 1991), 3 CFR, 1991 Comp., p. 351.

Subpart A--[Amended]

0
2. Amend Sec.  112.1 as follows:
0
a. By revising paragraph (d)(2)(i);
0
b. By removing paragraph (d)(2)(ii)(F);
0
c. By revising paragraph (d)(4); and
0
d. By removing paragraph (d)(12)

Sec.  112.1  General applicability.

* * * * *
    (d) * * *
    (2)(i) The completely buried storage capacity of the facility is
42,000 U.S. gallons or less of oil. For purposes of this exemption, the
completely buried storage capacity of a facility excludes the capacity
of a completely buried tank, as defined in Sec.  112.2, and connected
underground piping, underground ancillary equipment, and containment
systems, that is currently subject to all of the technical requirements
of part 280 of this chapter or all of the technical requirements of a
State program approved under part 281 of this chapter, or the capacity
of any underground oil storage tanks deferred under 40 CFR part 280
that supply emergency diesel generators at a nuclear power generation
facility licensed by the Nuclear Regulatory Commission and subject to
any Nuclear Regulatory Commission provision regarding design and
quality criteria, including, but not limited to, 10 CFR part 50. The
completely buried storage capacity of a facility also excludes the
capacity of a container that is ``permanently closed,'' as defined in
Sec.  112.2 and the capacity of intra-facility gathering lines subject
to the regulatory requirements of 49 CFR part 192 or 195.
* * * * *
    (4) Any completely buried storage tank, as defined in Sec.  112.2,
and connected underground piping, underground ancillary equipment, and
containment systems, at any facility, that is subject to all of the
technical requirements of part 280 of this chapter or a State program
approved under part 281 of this chapter, or any underground oil storage
tanks including below-grade vaulted tanks, deferred under 40 CFR part
280, as originally promulgated, that supply emergency diesel generators
at a nuclear power generation facility licensed by the Nuclear
Regulatory Commission, provided that such a tank is subject to any
Nuclear Regulatory Commission provision regarding design and quality
criteria, including, but not limited to, 10 CFR part 50. Such emergency
generator tanks must be marked on the facility diagram as provided in
Sec.  112.7(a)(3), if the facility is otherwise subject to this part.

* * * * *

0
3. Amend Sec.  112.3 as follows:
0
a. By designating paragraph (a)(1) as paragraph (a), and removing
paragraph (a)(2);
0
b. By revising the newly designated paragraph (a);
0
c. By removing paragraph (b)(2), and designating paragraph (b)(3) as
(b)(2);
0
d. By revising paragraph (b)(1) and the newly designated paragraph
(b)(2);
0
e. By removing paragraph (d)(1)(vi), and designating paragraph
(d)(1)(vii) as (d)(1)(vi);
0
f. By revising the newly designated paragraph (d)(1)(vi);
0
g. By revising paragraph (g)(2).

Sec.  112.3  Requirement to prepare and implement a Spill Prevention,
Control, and Countermeasure Plan.

* * * * *
    (a) If your onshore or offshore facility was in operation on or
before August 16, 2002, you must maintain your Plan, but must amend it,
if necessary to ensure compliance with this part, and implement the
Plan no later than November 10, 2010. If your onshore or offshore
facility becomes operational after August 16, 2002, through November
10, 2010, and could reasonably be expected to have a discharge as
described in Sec.  112.1(b), you must prepare and implement a Plan on
or before November 10, 2010.
    (b)(1) If you are the owner or operator of an onshore or offshore
facility (excluding oil production facilities) that becomes operational
after November 10, 2010, and could reasonably be expected to have a
discharge as described in Sec.  112.1(b), you must prepare and
implement a Plan before you begin operations.
    (2) If you are the owner or operator of an oil production facility
that becomes operational after November 10, 2010, and could reasonably
be expected to have a discharge as described in Sec.  112.1(b), you
must prepare and implement a Plan within six months after you begin
operations.
* * * * *
    (d) * * *
    (1) * * *
    (vi) That, if applicable, for a produced water container subject to
Sec.  112.9(c)(6), any procedure to minimize the amount of free-phase
oil is designed to reduce the accumulation of free-phase oil and

the procedures and frequency for required inspections, maintenance and
testing have been established and are described in the Plan.
* * * * *
    (g) * * *
    (2) A Tier II qualified facility is one that has had no single
discharge as described in Sec.  112.1(b) exceeding 1,000 U.S. gallons
or no two discharges as described in Sec.  112.1(b) each exceeding 42
U.S. gallons within any twelve month period in the three years prior to
the SPCC Plan self-certification date, or since becoming subject to
this part if the facility has been in operation for less than three
years (other than discharges as described in Sec.  112.1(b) that are
the result of natural disasters, acts of war, or terrorism), and has an
aggregate aboveground oil storage capacity of 10,000 U.S. gallons or
less.

0
4. Amend Sec.  112.5 as follows:
0
a. By removing paragraphs (b) and (c) and designating paragraph (d) as
paragraph (b)
0
b. By revising the newly designated paragraph (b); and
0
c. By designating paragraph (e) as paragraph (c).

Sec.  112.5  Amendment of Spill Prevention, Control, and Countermeasure
Plan by owners or operators.

* * * * *
    (b) Notwithstanding compliance with paragraph (a) of this section,
complete a review and evaluation of the SPCC Plan at least once every
five years from the date your facility becomes subject to this part;
or, if your facility was in operation on or before August 16, 2002,
five years from the date your last review was required under this part.
As a result of this review and evaluation, you must amend your SPCC
Plan within six months of the review to include more effective
prevention and control technology if the technology has been field-
proven at the time of the review and will significantly reduce the
likelihood of a discharge as described in Sec.  112.1(b) from the
facility. You must implement any amendment as soon as possible, but not
later than six months following preparation of any amendment. You must
document your completion of the review and evaluation, and must sign a
statement as to whether you will amend the Plan, either at the
beginning or end of the Plan or in a log or an appendix to the Plan.
The following words will suffice, ``I have completed review and
evaluation of the SPCC Plan for (name of facility) on (date), and will
(will not) amend the Plan as a result.''
* * * * *

0
5. Revise Sec.  112.6 as follows:
0
a. By revising paragraph (a)(1)(vii);
0
b. By revising paragraph (b)(1)(vii);
0
c. By revising paragraph (b)(3)(iii); and
0
d. By revising paragraph (b)(4)(ii);

Sec.  112.6  Qualified Facilities Plan Requirements.

* * * * *
    (a) * * *
    (1) * * *
    (vii) The Plan does not deviate from any requirement of this part
as allowed by Sec.  112.7(a)(2) and 112.7(d) or include measures
pursuant to Sec.  112.9(c)(6) for produced water containers and any
associated piping; and
* * * * *
    (b) * * *
    (1) * * *
    (vii) The Plan does not deviate from any requirement of this part
as allowed by Sec.  112.7(a)(2) and 112.7(d) or include measures
pursuant to Sec.  112.9(c)(6) for produced water containers and any
associated piping, except as provided in paragraph (b)(3) of this
section; and
* * * * *
    (3) * * *
    (iii) Produced Water Containers. Your Plan may not include any
alternative procedures for skimming produced water containers in lieu
of sized secondary containment pursuant to Sec.  112.9(c)(6), unless
they have been reviewed and certified in writing by a Professional
Engineer, as provided in paragraph (b)(4) of this section.
    (4) * * *
    (ii) As described in paragraph (b)(3) of this section, the facility
owner or operator may not self-certify measures as described in Sec.
112.9(c)(6) for produced water containers and any associated piping.
Such measures must be reviewed and certified, in writing, by a licensed
Professional Engineer, in accordance with Sec.  112.3(d)(1)(vi).
* * * * *

0
6. Amend Sec.  112.7 as follows:
0
a. By revising paragraph (a)(3) introductory text; and
0
b. By revising paragraph (h) introductory text.

Sec.  112.7  General requirements for Spill Prevention, Control, and
Countermeasure Plans.

* * * * *
    (a) * * *
    (3) Describe in your Plan the physical layout of the facility and
include a facility diagram, which must mark the location and contents
of each fixed oil storage container and the storage area where mobile
or portable containers are located. The facility diagram must identify
the location of and mark as ``exempt'' underground tanks that are
otherwise exempted from the requirements of this part under Sec.
112.1(d)(4). The facility diagram must also include all transfer
stations and connecting pipes, including intra-facility gathering lines
that are otherwise exempted from the requirements of this part under
Sec.  112.1(d)(11). You must also address in your Plan:
* * * * *
    (h) Facility tank car and tank truck loading/unloading rack
(excluding offshore facilities).
* * * * *

Subpart B--[Amended]

0
7. Amend Sec.  112.9 by revising paragraph (c)(6) to read as follows:

Sec.  112.9  Spill Prevention, Control, and Countermeasure Plan
Requirements for onshore oil production facilities (excluding drilling
and workover facilities).

* * * * *
    (c) * * *
    (6) Produced water containers. For each produced water container,
comply with Sec.  112.9(c)(1) and (c)(4); and Sec.  112.9(c)(2) and
(c)(3), or comply with the provisions of the following paragraphs
(c)(6)(i) through (v):
    (i) Implement, on a regular schedule, a procedure for each produced
water container that is designed to separate the free-phase oil that
accumulates on the surface of the produced water. Include in the Plan a
description of the procedures, frequency, amount of free-phase oil
expected to be maintained inside the container, and a Professional
Engineer certification in accordance with Sec.  112.3(d)(1)(vi).
Maintain records of such events in accordance with Sec.  112.7(e).
Records kept under usual and customary business practices will suffice
for purposes of this paragraph. If this procedure is not implemented as
described in the Plan or no records are maintained, then you must
comply with Sec.  112.9(c)(2) and (c)(3).
    (ii) On a regular schedule, visually inspect and/or test the
produced water container and associated piping for leaks, corrosion, or
other conditions that could lead to a discharge as described in Sec.
112.1(b) in accordance with good engineering practice.
    (iii) Take corrective action or make repairs to the produced water
container and any associated piping as indicated by regularly scheduled
visual inspections, tests, or evidence of an oil discharge.
    (iv) Promptly remove or initiate actions to stabilize and remediate
any accumulations of oil discharges

associated with the produced water container.
    (v) If your facility discharges more than 1,000 U.S. gallons of oil
in a single discharge as described in Sec.  112.1(b), or discharges
more than 42 U.S. gallons of oil in each of two discharges as described
in Sec.  112.1(b) within any twelve month period from a produced water
container subject to this subpart (excluding discharges that are the
result of natural disasters, acts of war, or terrorism) then you must,
within six months from the time the facility becomes subject to this
paragraph, ensure that all produced water containers subject to this
subpart comply with Sec.  112.9(c)(2) and (c)(3).
* * * * *

0
8. Revise Appendix G to Part 112 to read as follows:
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[FR Doc. E9-27156 Filed 11-12-09; 8:45 am]

BILLING CODE 6560-50-C


[Federal Register Volume 77, Number 182 (Wednesday, September 19, 2012)]
[Notices]
[Pages 58188-58189]
[FR Doc No: 2012-23036]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67848; File No. SR-C2-2012-032]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Adopt a Rule Regarding Mandatory Trading Permit Holder Education and
Corresponding Set of Fines

September 13, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 4, 2012, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    C2 proposes to adopt a rule requiring Trading Permit Holder
(``TPH'') education and corresponding fine structure. The text of the
proposed rule change is available on the Exchange's Web site (http://www.c2exchange.com/Legal/), at the Commission's Web site (http://www.sec.gov), at the Exchange's Office of the Secretary, and at the
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt proposed Rule 6.46 stating that TPHs
and persons associated with TPHs (``Associated Persons'') are required
to attend such educational classes as the Exchange may require from
time to time. Failure to attend Exchange-mandated continuing
educational classes may subject TPHs and Associated Persons to
sanctions pursuant to the Exchange's Minor Rule Violation Plan provided
in Exchange Rule 17.50. The Exchange believes that it is important and
necessary from time to time to require mandatory participation in
certain educational training classes by its TPHs and Associated Persons
for a variety of reasons, including to explain the operation of new
technology and new rules, procedures and policies regarding trading on
the Exchange. The text of the proposed Rule 6.46 is identical to that
of Chicago Board Options Exchange, Incorporated (``CBOE'') Rule 6.20(e)
(with the exclusion of a sentence in CBOE Rule 6.20(e) regarding Floor
Officials, which is inapplicable to C2, as C2 is an all-electronic
exchange that does not have a trading floor).\3\
---------------------------------------------------------------------------

    \3\ See CBOE Rule 6.20(e).
---------------------------------------------------------------------------

    To correspond with the adoption of proposed Rule 6.46, the Exchange
also proposes to amend its Rule 17.50--Imposition of Fines for Minor
Rule Violations. CBOE Chapter 17--Discipline (which includes Rule
17.50--Imposition of Fines for Minor Rule Violations) is incorporated
into the C2 rules by reference as C2 Chapter 17.\4\ CBOE Rule
17.50(g)(6)--Violations of Trading Conduct and Decorum Policies--
imposes fines for violations of trading conduct and decorum policies.
Because C2 (an all-electronic exchange) does not have a trading floor,
the majority of the violations for which fines can be imposed under
CBOE Rule 17.50(g)(6) (such as not complying with the trading floor
dress code, bringing impermissible food or drink onto the trading
floor, and running on the trading floor) could not take place on C2.
However, there is one exception: CBOE Rule 17.50(g)(6) allows for the
imposition of fines for the failure to attend CBOE-mandated educational
training.\5\ Therefore, instead of simply stating that, with respect to
applicability to C2 only, CBOE Rule 17.50(g)(6) shall not apply to C2,
the Exchange instead proposes to state that, notwithstanding the
remainder of C2 Chapter 17, with respect to its applicability to C2
only, CBOE Rule 17.50(g)(6)--Violations of Trading Conduct and Decorum
Policies--will be replaced in its entirety with the following: A fine
may be imposed upon a Trading Permit Holder or persons associated with
Trading Permit Holders in accordance with the fine schedule set forth
below for failure

to attend Exchange-mandated educational training (per Rule 6.46).
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    \4\ See Securities Exchange Act Release No. 62323 (June 17,
2010), 75 FR 36144 (June 24, 2012) (SR-C2-2010-002).
    \5\ See CBOE Regulatory Circular RG09-92 (August 28, 2009).

------------------------------------------------------------------------
   Number of offenses in any rolling twenty-four month
                         period                             Fine amount
------------------------------------------------------------------------
1st Offense.............................................          $1,000
2nd Offense.............................................           2,500
Subsequent Offenses.....................................           5,000
------------------------------------------------------------------------

    In making this change, C2 cleans up its rules and establishes that
the aspects of CBOE Rule 17.50(g)(6) that are not relevant to C2 (due
to C2's status as an all-electronic exchange without a trading floor)
do not apply to C2 while still retaining the ability to levy fines for
failure to attend C2-mandated educational training (per the proposed
Rule 6.46). The amounts of the proposed fines are identical to those
that can be currently assessed on CBOE for a failure to attend CBOE-
mandated educational training.\6\
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    \6\ See CBOE Regulatory Circular RG09-92 (August 28, 2009).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\7\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5)\8\ requirements that the rules of
an exchange be designed to promote just and equitable principles of
trade, to prevent fraudulent and manipulative acts and practices, to
remove impediments to and to perfect the mechanism for a free and open
market and a national market system, and, in general, to protect
investors and the public interest. Establishing both a rule requiring
TPHs and Associated Persons to attend such educational classes as the
Exchange may require from time to time and a corresponding guideline
for fines for the failure to attend such educational classes helps
ensure that TPHs and Associated Persons are educated and knowledgeable
as necessary regarding relevant technologies, rules, procedures and
policies. This removes impediments to and to perfects the mechanism for
a free and open market and a national market system, and, in general,
protects investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    By removing inapplicable sections violations within Rule
17.50(g)(6) that relate to floor trading, the Exchange eliminates
confusion that could arise from reading Exchange rules and circulars,
thereby removing impediments to and perfecting the mechanism for a free
and open market.

B. Self-Regulatory Organization's Statement on Burden on Competition

    C2 does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\
thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File No. SR-C2-2012-032 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File No. SR-C2-2012-032. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Web site (http://www.sec.gov/rules/sro.shtml). Copies
of the submission, all subsequent amendments, all written statements
with respect to the proposed rule change that are filed with the
Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of C2. All comments received will
be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File No. SR-C2-2012-032 and should be submitted on or
before October 10, 2012.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-23036 Filed 9-18-12; 8:45 am]
BILLING CODE 8011-01-P