[Federal Register Volume 84, Number 246 (Monday, December 23, 2019)]
[Proposed Rules]
[Pages 70467-70484]
[FR Doc No: 2019-27066]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 320

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

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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

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

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

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

FOR FURTHER INFORMATION CONTACT: For more information on this document,
contact Charlotte Mooney, U.S. Environmental Protection Agency, Office
of Resource Conservation and Recovery, Mail Code 5303P, 1200
Pennsylvania Ave. NW, Washington, DC 20460; telephone<PHONE_NUMBER> or
(email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

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

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

Table of Contents

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

I. Executive Summary

A. Overview

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

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

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

C. Summary of the Major Provisions of the Regulatory Action

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

D. Costs and Benefits of the Regulatory Action

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

II. Authority

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

III. Background Information

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

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

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

B. History of Section 108(b) Rulemakings

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

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

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

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

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

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

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

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

V. Approach To Developing This Proposed Rule

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

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

    \23\ 82 FR 3512 (Jan. 11, 2017).
    \24\ 83 FR 7570 (Feb. 21, 2018).
---------------------------------------------------------------------------

VI. Petroleum and Coal Products Manufacturing Industry Overview

A. Identification of Petroleum and Coal Products Manufacturing Industry

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

and distillation. As of 2018, there were 135 operating petroleum
refineries in the U.S. In 2000, there were 155, indicating that at
least 20 refineries have closed since the year 2000.\26\ In addition,
this industry includes establishments that primarily further process
refined petroleum and coal products to produce products, such as
asphalt, asphalt roofing materials, coke from coal, and petroleum
lubricating oils.
---------------------------------------------------------------------------

    \25\ 2016 Economic Census of the United States, NAICS 324.
    \26\ CERCLA 108(b) Economic Sector Profile: Petroleum and Coal
Products Manufacturing Industry.
---------------------------------------------------------------------------

B. Current Industry Practices

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

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

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

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

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

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

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

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

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

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

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

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

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

C. Industry Economic Profile

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

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

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

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

VII. Discussion of Cleanup Sites Analysis

A. Cleanup Site Evaluations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

C. Existing State and Federal Financial Responsibility Programs

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

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

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

D. Compliance and Enforcement History

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

VIII. Decision to Not Propose Requirements

    Based on consideration of the analyses described in the previous
sections, EPA has reached a conclusion that the degree and duration of
risk posed by the Petroleum and Coal Products Manufacturing industry
does not warrant financial responsibility requirements under CERCLA
Section 108(b) and thus is proposing to not issue such requirements.
The analysis and proposed finding in this proposal are not applicable
to and do not affect, limit, or restrict EPA's authority (1) to take a
response action or enforcement action under CERCLA at any facility in
the Petroleum and Coal Products Manufacturing industry, including any
currently operating facilities or those described in this proposal and
in the background documents for this proposal, and (2) to include
requirements for financial responsibility as part of such response
action. The set of facts in the rulemaking record related to the
individual facilities discussed in this proposed rulemaking supports
the Agency's proposal not to issue financial responsibility
requirements under Section 108(b) for this class, but a different set
of facts could demonstrate a need for a CERCLA response action at an
individual site. This proposed rulemaking also does not affect the
Agency's authority under other authorities that may apply to individual
facilities, such as the CAA, CWA, RCRA, and TSCA.
    EPA believes the evaluation of the Petroleum and Coal Products
Manufacturing industry demonstrates significantly reduced risk of a
Fund-financed response action at current operations. The reduction in
risks due to the requirements of existing regulatory programs and
voluntary practices, combined with reduced costs to the taxpayer--
demonstrated by EPA's cleanup case analysis, existing financial
responsibility requirements, and enforcement actions--has reduced the
need for Federally-financed response action at facilities in the
Petroleum and Coal Products Manufacturing industry. EPA looked at
current industry practices, market structure and economic performance
of the industry; analyzed cleanup cases for facilities in the industry;
and evaluated the extent to which the industry and sources of releases
are covered by the modern regulatory framework, the degree to which
taxpayers have been called upon to pay for cleanup, and EPA enforcement
history in the industry.
    As discussed in section VII.A, EPA identified only one cleanup case
that occurred under the modern regulatory framework and also entailed
some Fund expenditure. Overwhelmingly, however, the industry was found
to be practicing responsibly within the current regulatory framework,
with just one site indicating a significant impact to the Fund while
operating under the modern regulatory framework. For context, there are
approximately 2,167 establishments currently operating in the industry.
The language in Section 108(b) on determining the degree and duration
of risk and on setting the level of financial responsibility confers a
significant amount of discretion on EPA. In the past, some of the risks
associated with spills resulted from, or were exacerbated by, cleanups
not being undertaken in a timely fashion. However, under the modern
regulatory framework, requirements such as the Risk Management Plan
under the CAA, the Emergency Action Plan under OSHA, and as RCRA
requirements for TSDFs to detect, contain, and clean up any leaks,
including facility-wide corrective action, all help to ensure timely
responses to releases. In addition to the requirements for facilities
to respond to spills in a timely fashion, the public can alert the
Federal government to releases by calling the National Response Center
(NRC), which is a part of the Federally established National Response
System and staffed 24 hours a day by the U.S. Coast Guard. The NRC is
the designated Federal point of contact for reporting all oil,
chemical, radiological, biological and etiological discharges into the
environment, anywhere in the United States and its territories.
    Only one site (discussed in detail in Section VII.A) had
significant releases or threatened releases of hazardous substances
under the modern regulatory framework and required more than minimal
taxpayer-funded cleanups. Additionally, none of the at least 20
refineries that have closed since 2000, under the modern regulatory
framework, had releases that resulted in a more than minimal burden to
the Fund. It is EPA's assessment that the small set of Federally-funded
cleanup cases due to recent contamination does not warrant the
imposition of costly financial responsibility requirements on the
entire Petroleum and Coal Products Manufacturing industry under CERCLA
Section 108(b).
    EPA acknowledges that regulations do not always prevent releases,
and the risk of a release is lessened but never eliminated by existing
Federal and state environmental regulations. However, EPA believes that
the network of Federal and state regulations creates a comprehensive
framework that applies to prevent releases that could result in a need