$6.63
                                                                          $6.68
                                                                          $6.74
                                                                          $6.00
                                                                          $7.95
                                                                          $5.02
                                                                          $5.59
                                                                          $6.49
                                                                          $62.4
                                                                          $7.31
7% Discounted
                                                                          $6.29
                                                                          $4.39
                                                                          $5.91
                                                                          $5.73
                                                                          $5.57
                                                                          $4.77
                                                                          $6.09
                                                                          $3.70
                                                                          $3.97
                                                                          $4.44
                                                                          $50.9
                                                                          $7.24
[1]	See Appendix J in Volume II for more details on the calculation of cost savings.

Alternative Qualified Facilities Criteria for Oil Production Facilities
In the December 5, 2008 amendments, EPA allowed owner/operators of certain oil production facilities to prepare a self-certified SPCC Plan rather than a Plan certified by a PE based on alternative qualifying criteria. Some stakeholders, in their public comments on the October 2007 proposed SPCC amendments, expressed concern about the regulation of small oil production facilities under the SPCC rule, suggesting that the costs of the SPCC requirements are disproportionate to the threat that these small oil production facilities pose to the environment. EPA believes that discharges from small oil production facilities can pose a threat of an oil discharge to navigable waters or adjoining shorelines. The Agency also believes a PE should be involved in the development and implementation of an SPCC Plan at most oil production facilities because they typically have complex equipment and store large quantities of oil. These facilities are of further concern because they typically have operations that are unattended and in remote locations and therefore pose an environmental threat. Therefore, EPA is removing the alternative qualified facility eligibility criteria provision for oil production facilities finalized in the December 2008 rule. As a result, there is no cost impact of the combined 2008 and 2009 final amendments. Below we review the cost savings that were estimated for the 2008 amendment but that are no longer expected below.
Compliance Cost Savings
In 2008, EPA assessed the cost savings of this alternative option that allows for owners/operators of certain oil production facilities to prepare self-certified SPCC Plans. EPA calculated the cost savings by estimating the number of affected facilities and the facility-level cost savings for these facilities. EPA also accounted for an overlap of cost-savings between production facilities and small production facilities to avoid double-counting.
Number of Affected Facilities. EPA first estimated the number of qualified oil production facilities that would have no injection wells at the facility and no more than four producing wells per single tank battery or would have one or more injection wells at the facility and no more than two producing wells per single tank battery. EPA projected the number of new and existing production facilities affected by the alternative facilities criteria option for each year of 10-year analysis period (2010 through 2019.) The average yearly number of new and existing facilities that would have been affected is 96,400.
Facility-Level Cost Savings for Affected Qualified Facilities. A small oil production facility owner/operator would be able to take advantage of the relief offered by the alternative qualified facility criteria and have the option to prepare a self-certified SPCC Plan rather than a Plan certified by a PE. Another potential impact of the regulatory relief approach is that facility operators with both marginal wells and non-marginal wells within the same facility could choose to redefine their facility. This could be done by splitting the facility in order to meet compliance requirements as long as the marginal and non-marginal wells are not in the same tank battery. EPA calculated the cost savings for each facility size using the average PE certification cost for a new Plan, and for minor and major technical amendments.
Further, EPA assumed that a total of 13 percent of existing facilities amend their Plan each year due to a required 5-year review (10 percent of all facilities) and technical amendments to the facility (3 percent of all facilities). The average unit costs incurred for certifying a new and re-certifying an amended SPCC Plan were calculated as well. Also EPA assumed that a certain number of new and existing facilities with a total aboveground oil storage capacity of 10,000 gallons or less are already eligible to self-certify SPCC Plans as qualified facilities and are receiving these savings. The average number of qualified facilities before this rule amendment is 32,600, over the analysis period 2010-2019. The average number of all oil production facilities over the analysis period is 255,066.
Overlap. EPA determined that there was a certain degree of overlap between the relaxed requirements for production facilities introduced by the six-month delay amendment and the amendment for small production facilities. As a result, EPA accounted for the common cost savings in the section for the six-month delay amendment and removed the double counting effect from the cost savings for the small production facilities.
Calculation of Total Cost Savings
             Total Cost Savings =	NFac * (NCost Saving Qualified)*Overlap
 where,
 NFac = the projected number of affected facilities.
 NCost Saving Qualified = Facility-level cost savings for affected qualified facilities.
 Overlap = 1 - estimated percentage reduction in total burden due to state overlap for affected facilities.
EPA estimated the total cost savings by multiplying the facility-level cost by facility size category with the total number of new and existing production facilities affected by this amendment in each size category, and only counting the overlapping facilities once.
Using the equation above, EPA estimated that this alternative option for small production facilities with marginal wells would reduce compliance costs by approximately $30.2 million and $29.9 million per year, discounted at 3 percent and 7 percent, respectively (see Exhibit 6-40).

Exhibit 6-40
Projected Annual Total Compliance Cost Savings for the EPA Approach for Marginal Oil Production Facilities (2007$ Millions)

Total Cost Savings

2010
Year 1
2011
Year 2
2012
Year 3
2013
Year 4
2014
Year 5
2015
Year 6
2016
Year 7
2017
Year 8
2018
Year 9
2019
Year 10
10- Year Present Value
Annualized
Not Discounted
                                                                          $26.1
                                                                          $25.5
                                                                          $28.0
                                                                          $29.1
                                                                          $30.3
                                                                          $30.7
                                                                          $33.9
                                                                          $32.1
                                                                          $33.7
                                                                          $35.8
                                                                           $305
                                                                          $30.5
3% Discounted
                                                                          $25.4
                                                                          $24.0
                                                                          $25.6
                                                                          $25.9
                                                                          $26.1
                                                                          $25.7
                                                                          $27.5
                                                                          $25.3
                                                                          $25.8
                                                                          $26.6
                                                                           $258
                                                                          $30.2
7% Discounted
                                                                          $24.4
                                                                          $22.2
                                                                          $22.9
                                                                          $22.2
                                                                          $21.6
                                                                          $20.4
                                                                          $21.1
                                                                          $18.7
                                                                          $18.3
                                                                          $18.2
                                                                           $210
                                                                          $29.9

Produced Water Storage Containers
Under the final rulemaking, EPA is removing all rule elements associated with the exemption for produced water containers in the December 2008 amendments.  Since EPA is removing an exemption provided in the 2008 rule, there is no cost impact of the combined 2008 and 2009 final amendments.  The Agency has determined that the exemption for produced water containers would not effectively protect the environment from discharges of quantities of oil that may be harmful.
EPA is not making any changes to the definition of produced water container in §112.2 or the alternative compliance measures for produced water containers in lieu of sized secondary containment as finalized in the December 5, 2008 amendments. The alternative measures to sized secondary containment requirements and inspections under §112.9(c)(2) and (c)(3) for produced water containers include: compliance with general secondary containment requirements; implementation of a procedure or process to remove free-phase oil (e.g., skimming program) as certified by a PE; visual inspection; corrective action or repairs to the container; and prompt removal or remediation of oil discharges.
Consistent with the assumption of full compliance with the SPCC requirements, EPA expects that existing production facilities would have already constructed the sized secondary containment and would not be affected by this amendment.  Further, EPA determined that it is a common engineering practice to co-locate stock tanks and a produced water container in one tank battery and provide sized secondary containment that has the capacity of the largest single oil container and sufficient freeboard to contain precipitation (see Exhibit 6-41).   Therefore, new facility owner/operator would continue to provide sized secondary containment around the tank battery for stock and other tanks within the battery. Since the produced water containers are typically the largest, the owner/operator would save from constructing a lower height sized secondary containment around the tank battery, which would serve as general containment for the produced water containers.
Exhibit 6-41
Oil Storage Containers at a Typical Oil Production Facility in Size Category II
Oil Storage Containers
Capacity (Gallons)
(Average, Range)
Percentage of Total
(Average, Range)
Produced Water Container (1)
                           21,000, (17,000- 23,000)
                               37%, (30%-40%)[1]
Stock Tanks (2)
                         33,600, ( 30,000  -  35,000)
                                59%, (52%-61%)
Heater-Treater (1)
                              2,310, (1,700-2500)
                                  4%, (3%-4%)
Total
                           57,000, (49,000- 61,000)
                                     100%
[1]	This percentage could vary depending on oil well productivity. Some Regions have higher fractions for produced water. For example, from personal communication with Vincent Zenone, Region 3: "70% of the storage capacity for any of the size-categorized facilities would be required for produced water in PA.  WV would have a similar percent of recovered produced water as a function of oil production."
Source: A set of SPCC Plans obtained from EPA Regions in December 2006-January 2007
The estimated cost of sized secondary containment for a facility with the maximum tank capacity of 66,600 gallons (Category III facility) ranges from $5,430 for an earthen berm to approximately $24,300 for a concrete berm. The Agency assumed that the size of the largest stock tank is 80 percent of the size of the produced water tank (based on model facility developed using SPCC Plans obtained by EPA regions). EPA's research shows that a 20 percent reduction in capacity of the largest tank would lead to approximately 8 percent to 11 percent reduction in cost of the sized secondary containment with associated cost savings from $434 to $2,670 for earthen and concrete berms respectively.
Exhibit 6-42 presents the estimates of the facility-level cost savings associated with the reduced cost for providing secondary containment for the produced water container.
Exhibit 6-42
Estimated Unit Cost/Cost Savings for New Facilities
Size Category
Capacity of Produced Water Container[1]
Cost of Sized Secondary Containment
Cost Savings

Earthen Berm
Concrete Berm
Earthen Berm
Concrete Berm
Category I
                                                                  2,090 gallons
                                                                         $1,560
                                                                         $5,270
                                                                           $125
                                                                           $580
Category II
                                                                  7,770 gallons
                                                                         $2,810
                                                                        $15,700
                                                                           $225
                                                                         $1,720
Category III
                                                                 66,600 gallons
                                                                         $5,430
                                                                        $24,300
                                                                           $434
                                                                         $2,670
Category IV
                                                                444,000 gallons
                                                                        $23,200
                                                                       $114,000
                                                                         $1,860
                                                                        $12,600
[1]	Firms incur cost savings only if the largest container in the tank battery is the produced water container. It is also important to note that this is the size of the largest container; a facility may have additional containers within the tank battery.

In addition to general secondary containment, the owners/operators of the facilities need to implement a procedure or process to remove free-phase oil.  EPA estimated the cost of the skimming or a similar oil removing procedure at $1,020 in the first year and $322 in subsequent years (includes the effort to develop and implement the procedure). An oil skimmer ranges in price from approximately $130 to $1,260 with an average of about $700. Based on EPA's judgment, facilities would incur technical labor costs of six hours ($322) per year to operate the skimming devices.
Although the final rule incorporates additional flexibility regarding secondary containment requirements for produced water containers, the following additional measures are required in order to maintain environmental protection under this approach: (1) scheduled inspections/testing of the produced water container and associated piping; (2) corrective action to repair the container or associated piping, and (3) prompt removal of or actions to stabilize and remediate oil discharges associated with the produced water container.  None of these measures are expected to result in an additional cost beyond baseline costs for conducting scheduled inspections/testing, corrective action, and removing oil discharges from the produced water containers.
Clarification of the Definition of Permanently Closed Containers
The SPCC rule exempts from applicability and from capacity threshold determinations any oil storage container that is "permanently closed." EPA sought to address concerns expressed by the regulated community over the definition of a "permanently closed" container, as described in §112.2. According to the definition, in order to permanently close a container: all liquid and sludge must be removed from the container and connecting line; all connecting lines and piping must be disconnected from the container and blanked off; all valves (except ventilation valves) must be closed and locked; and conspicuous signs must be posted on each container stating that it is a permanently closed container and noting the date of closure. Once permanently closed, containers are no longer required to be counted in facility storage capacity calculation, nor are they subject to the other requirements under the SPCC rule.
Variable economic conditions and production rates at oil production facilities may result in certain containers at a facility going unused for long periods of time. Regulated community members have suggested that permanent closure of such tanks is costly and undesirable because closing a container impedes bringing it back into use if production rates surge or if economic conditions become more favorable. Members of the regulated community have suggested that EPA provide an option to "temporarily" close tanks, in order to exempt the containers from SPCC applicability. However, EPA maintains that if a tank is not permanently closed, it is still available for storage and the possibility of a discharge, as described in §112.1(b), remains. Accordingly, EPA does not believe that a regulatory action is warranted to address this issue.
Since the amendment only seeks to provide clarification on the SPCC rule and does not change the regulatory requirements, no cost impact is monetized as a result of this clarification.
Oil and Natural Gas Pipeline Facilities
EPA sought to provide clarification regarding SPCC rule applicability at natural gas production facilities. Under the SPCC rule, EPA does not regulate natural gas. Although the SPCC rule requirements do not apply to such facilities because natural gas does not meet the definition of oil, natural gas facilities may store other products that are considered oil, and thus could be subject to the requirements of the SPCC rule. Because natural gas condensate that can be drawn off of tanks, containers, or other equipment is liquid at atmospheric pressures and temperatures, any accumulations of drip or condensate from natural gas production is considered oil. Therefore, for the purposes of determining SPCC applicability, containers 55 gallons or more in capacity that store condensate must be included in a natural gas facility's total oil storage capacity calculation (ancillary oil storage in other areas of the facility, such as fuel or lubrication oil storage, is also counted). EPA sought to clarify the applicability of the SPCC rule to oil containers at a natural gas facility, and the different SPCC provisions to which a natural gas facility may be subject. The final rule makes no change in these provisions and is not otherwise intended to impose new requirements on DOT-regulated oil and natural gas pipelines. Rather, by granting operators new flexibility in delineating facility boundaries, the final rule should reduce uncertainty and minimize, if not eliminate, overlapping enforcement.
Since the amendment only seeks to provide clarification on the SPCC rule, and does not change the regulatory requirements, no cost impact is monetized as a result of this clarification. Conceivably, there could be cost savings that result from the reduced burden of understanding the rule, but EPA does not have sufficient information to quantify these savings.
Aggregate Cost Savings for Oil Production Facilities
The oil production sector would benefit from the new requirements for Tier I qualified facilities, revisions to the facility diagram requirements, in addition to amendments specific to the oil production sector such as the six-month delay in preparation and implementation of SPCC Plans and the alternative compliance requirements in lieu of sized secondary containment of flow-through separation and treating equipment. The total annualized savings to owners and operators of oil production facilities from all of the final amendments that affect this sector are estimated at $35.5 million and $35.2 million at the 3 percent and 7 percent discount rate (see Exhibit 6-43).

Exhibit 6-43
Estimated Aggregate Annual Cost Savings for Oil Production Facilities from Multiple Rule Components (2007$ Millions)
Option
%
Total Cost Savings for Oil Production Facilities

Year

2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
10- Year Present Value
Annualized

1
2
3
4
5
6
7
8
9
10

Tier I Qualified Facilities

                                                                             0%
                                                                          $2.31
                                                                          $1.73
                                                                          $2.49
                                                                          $2.58
                                                                          $2.68
                                                                          $2.46
                                                                          $3.36
                                                                          $2.18
                                                                          $2.51
                                                                          $3.00
                                                                          $25.3
                                                                          $2.53

                                                                             3%
                                                                          $2.24
                                                                          $1.63
                                                                          $2.28
                                                                          $2.29
                                                                          $2.31
                                                                          $2.06
                                                                          $2.73
                                                                          $1.72
                                                                          $1.92
                                                                          $2.23
                                                                          $21.4
                                                                          $2.51

                                                                             7%
                                                                          $2.16
                                                                          $1.51
                                                                          $2.03
                                                                          $1.97
                                                                          $1.91
                                                                          $1.64
                                                                          $2.09
                                                                          $1.27
                                                                          $1.36
                                                                          $1.52
                                                                          $17.5
                                                                          $2.49
Six Month Delay for SPCC Plan Preparation and Implementation

                                                                             0%
                                                                          $22.2
                                                                          $16.6
                                                                          $23.8
                                                                          $24.7
                                                                          $25.7
                                                                          $23.6
                                                                          $32.2
                                                                          $20.9
                                                                          $24.0
                                                                          $28.7
                                                                           $242
                                                                          $24.2

                                                                             3%
                                                                          $21.5
                                                                          $15.6
                                                                          $21.8
                                                                          $22.0
                                                                          $22.2
                                                                          $19.7
                                                                          $26.2
                                                                          $16.5
                                                                          $18.4
                                                                          $21.4
                                                                           $205
                                                                          $24.1

                                                                             7%
                                                                          $20.7
                                                                          $14.5
                                                                          $19.5
                                                                          $18.9
                                                                          $18.3
                                                                          $15.7
                                                                          $20.0
                                                                          $12.2
                                                                          $13.1
                                                                          $14.6
                                                                           $167
                                                                          $23.8
Additional Requirements in Lieu of Sized Secondary Containment of Process Vessels

                                                                             0%
                                                                          $6.73
                                                                          $5.03
                                                                          $7.24
                                                                          $7.52
                                                                          $7.81
                                                                          $7.16
                                                                          $9.77
                                                                          $6.36
                                                                          $7.30
                                                                          $8.73
                                                                          $73.7
                                                                          $7.37

                                                                             3%
                                                                          $6.54
                                                                          $4.74
                                                                          $6.63
                                                                          $6.68
                                                                          $6.74
                                                                          $6.00
                                                                          $7.95
                                                                          $5.02
                                                                          $5.59
                                                                          $6.49
                                                                          $62.4
                                                                          $7.31

                                                                             7%
                                                                          $6.29
                                                                          $4.39
                                                                          $5.91
                                                                          $5.73
                                                                          $5.57
                                                                          $4.77
                                                                          $6.09
                                                                          $3.70
                                                                          $3.97
                                                                          $4.44
                                                                          $50.9
                                                                          $7.24
Facility Diagram

                                                                             0%
                                                                          $1.52
                                                                          $1.14
                                                                          $1.64
                                                                          $1.70
                                                                          $1.77
                                                                          $1.62
                                                                          $2.21
                                                                          $1.44
                                                                          $1.65
                                                                          $1.97
                                                                          $16.6
                                                                          $1.66

                                                                             3%
                                                                          $1.48
                                                                          $1.07
                                                                          $1.50
                                                                          $1.51
                                                                          $1.52
                                                                          $1.36
                                                                          $1.80
                                                                          $1.13
                                                                          $1.26
                                                                          $1.47
                                                                          $14.1
                                                                          $1.65

                                                                             7%
                                                                          $1.42
                                                                          $0.99
                                                                          $1.34
                                                                          $1.30
                                                                          $1.26
                                                                          $1.08
                                                                          $1.38
                                                                          $0.84
                                                                          $0.90
                                                                          $1.00
                                                                          $11.5
                                                                          $1.64
Total

                                                                             0%
                                                                          $32.7
                                                                          $24.5
                                                                          $35.2
                                                                          $36.5
                                                                          $38.0
                                                                          $34.8
                                                                          $47.5
                                                                          $30.9
                                                                          $35.5
                                                                          $42.4
                                                                           $358
                                                                          $35.8

                                                                             3%
                                                                          $31.8
                                                                          $23.1
                                                                          $32.2
                                                                          $32.5
                                                                          $32.8
                                                                          $29.1
                                                                          $38.6
                                                                          $24.4
                                                                          $27.2
                                                                          $31.6
                                                                           $303
                                                                          $35.5

                                                                             7%
                                                                          $30.6
                                                                          $21.4
                                                                          $28.7
                                                                          $27.9
                                                                          $27.1
                                                                          $23.2
                                                                          $29.6
                                                                          $18.0
                                                                          $19.3
                                                                          $21.6
                                                                           $247
                                                                          $35.2

Man-Made Structures
The Agency sought to clarify that certain man-made features, such as building walls, basement structures, and drainage systems, may be taken into consideration in determining how to comply with SPCC requirements. If an oil container at a regulated facility is located inside a building, the PE or facility owner/operator certifying the SPCC Plan may take into consideration the ability of the building walls and/or drainage systems to serve as secondary containment for the container.
Since this amendment only sought to provide clarification and does not change the regulatory requirements, it is not expected to result in any change in cost. Conceivably, there could be cost savings that result from the reduced burden of understanding the rule, but EPA does not have sufficient information to quantify these savings.
Wind Turbines
The Agency provided clarity on the applicability of the rule to wind turbines used to produce electricity. EPA believes that these wind turbines meet the definition of oil-filled operational equipment promulgated in the December 2006 SPCC rule amendments (71 FR 77266, December 26, 2006) and thus may be eligible for the alternative compliance option provided to qualified oil-filled operational equipment. Since the Agency is only providing clarity on the applicability of the rule, no cost impact is monetized as a result of this clarification. Conceivably, there could be cost savings that result from the reduced burden of understanding the rule, but EPA does not have sufficient information to quantify these savings.
Tier I Qualified Facilities
Background
EPA amended the SPCC rule to provide an option for owners and operators of certain qualified facilities with maximum individual aboveground oil container storage capacity of 5,000 gallons (designated as Tier I qualified facilities), to complete and implement a streamlined, self-certified SPCC Plan template in order to comply with the requirements of 40 CFR part 112. These Tier I qualified facilities are a subset of Tier II qualified facilities, which are those that meet these qualifying criteria: (1) aggregate aboveground storage capacity of 10,000 gallons or less; (2) no single discharge exceeding 1,000 U.S. gallons or no two discharges each exceeding 42 U.S. gallons within any 12-month period in the three years prior to the SPCC Plan self-certification date, or since becoming subject to 40 CFR part 112 if the facility has been in operation for less than three years (this criterion does not include discharges as described in §112.1(b) that are the result of natural disasters, acts of war, or terrorism).
EPA developed the template to cover, in a simple, user-friendly format, all requirements applicable to these facilities. Through this option, EPA also eliminated certain requirements, such as the need for a facility diagram, and streamlined other requirements. However, if the facility owner or operator chooses to use the template SPCC Plan for his/her facility SPCC Plan, he/she is not eligible to use "environmentally equivalent" measures that differ from the required Plan elements, as allowed under §112.7(a)(2), or impracticability determinations with respect to any secondary containment requirements, as provided under §112.7(d).
The Agency assumed that owners and operators of existing facilities would not use this option because they are expected to have an SPCC Plan in place and completing the template would present an additional expense for those facilities. Correspondingly, EPA assumed that owners and operators of all new facilities that meet the Tier I qualifying criterion would take advantage of the reduced requirements to complete and implement a template Plan.
Universe of Affected Facilities
To estimate the number of Tier I qualified facilities, EPA analyzed the data from state agencies that contain information on storage capacities of individual containers. The Agency estimated that 77 percent of the facilities with total storage capacity of 10,000 gallons or less have no storage containers greater than 5,000 gallons in volume and meet the additional qualifying criteria.
Exhibit 6-44 presents the projected number of new Tier I qualified facilities from 2010 through 2019. The projected average annual number of new Tier I qualified facilities is 5,780. EPA projected the number of Tier I qualified facilities over the 10-year analysis period using the estimated number of SPCC-regulated facilities with no storage containers greater than 5,000 gallons in volume and industry-specific growth rates.
To estimate the number of Tier I qualified facilities, EPA analyzed the data from state agencies that contain information on storage capacities of individual containers. As a result of this analysis, the Agency estimated the fraction of facilities with the total storage capacity of 10,000 gallons or less that have no individual aboveground oil storage containers with a capacity greater than 5,000 gallons.

Exhibit 6-44
Projected Number of New Facilities Affected by the Final Amendment for Tier I Qualified Facilities
New Facilities
Number of New Facilities Affected by the Amendment
10-Year Average

2010
Year 1
2011
Year 2
2012
Year 3
2013
Year 4
2014
Year 5
2015
Year 6
2016
Year 7
2017
Year 8
2018
Year 9
2019
Year 10

Facilities with 10,000 gallons or less of aboveground oil storage
                                                                         6,780
                                                                         6,630
                                                                         7,100
                                                                         7,280
                                                                         7,460
                                                                         7,510
                                                                         8,080
                                                                         7,710
                                                                         8,040
                                                                         8,470
                                                                         7,510
Tier I Qualified Facilities (No individual aboveground containers greater than 5,000 gallons)
                                                                         5,220
                                                                         5,100
                                                                         5,470
                                                                         5,600
                                                                         5,750
                                                                         5,780
                                                                         6,220
                                                                         5,940
                                                                         6,190
                                                                         6,520
                                                                         5,780

The facility estimates presented in Exhibit 6-44 above represent the projected number of facilities that could potentially be "Tier I qualified facilities" based on the capacity of their largest container. Eligibility for the alternative rule requirements, however, also considers the facility's discharge history. According to the amended requirements, a qualified facility cannot have had a single discharge (as described in §112.1(b)) greater than 1,000 gallons or two discharges each greater than 42 gallons during any 12-month period in the past three years. Since only new facilities would be able to take advantage of the final action, EPA assumed that those facilities would have a discharge-free history and, thus, qualify for this option.
Facility owners or operators would have the choice of complying with the existing SPCC rule (as amended in 2006) or taking advantage of the alternative requirements for Tier I qualified facilities. EPA assumed that facility owners and operators would likely choose the alternative requirements if their facility meets the qualifying criteria because it would be less costly than following the requirements that apply to all other facilities. Additionally, new facilities will not likely need to determine impracticability of secondary containment at the facility because the final rule also includes an alternative compliance option for flowlines and intra-facility gathering lines at oil production facilities in lieu of secondary containment. Therefore, new facilities will not be affected by the impracticability restriction for owners or operators of Tier I qualified facilities. As a result, in this analysis, EPA assumed that owners and operators of all new facilities that meet the Tier I qualified facilities criteria would take advantage of the relief provided by the final amendment.
Baseline Compliance Cost and Cost Savings
Baseline Compliance Cost
EPA estimated the baseline compliance cost for new Tier I qualified facilities using the projected number of new Tier I qualified facilities and the corresponding per-facility cost of compliance estimates before the final amendment. Exhibit 6-45 itemizes the individual cost components Tier I qualified facilities could be required to fulfill based on the 2002 SPCC final rule.
Exhibit 6-45
Annual Baseline Facility-Level Compliance Costs for Tier I Qualified Facility
Compliance Requirements
2002 Baseline Annual Cost
(before additional cost for template preparation)
New Facilities
New Plan - 112.3(a)
                                                                         $4,550
Oil Discharge Reporting - 112.4(c)
                                                                          $0.19
Modification of Plan - 112.5(a)
                                                                           $254
Recordkeeping
                                                                           $371
Total
                                                                         $5,170
Source: SCS Engineers (cost estimates for activities performed by an engineering firm) and RIA for the Final 2006 rule (cost estimates for activities performed by facility personnel, such as information submission in case of an oil discharge and recordkeeping).

EPA estimated the baseline compliance cost for new Tier I qualified facilities at $26.9 million and $26.7 million per year, discounted at 3 percent and 7 percent, respectively. Exhibit 6-46 presents the total annual baseline compliance cost for Tier I qualified facilities each year.

Exhibit 6-46
Total Projected Baseline Compliance Cost for New Tier I Qualified Facilities with No Containers Greater than 5,000 Gallons (2007$ Millions)

Compliance Costs
10- Year Present Value
Annualized

2010
Year 1
2011
Year 2
2012
Year 3
2013
Year 4
2014
Year 5
2015
Year 6
2016
Year 7
2017
Year 8
2018
Year 9
2019
Year 10

Not Discounted
                                                                          $24.4
                                                                          $23.9
                                                                          $25.6
                                                                          $26.2
                                                                          $26.9
                                                                          $27.0
                                                                          $29.1
                                                                          $27.8
                                                                          $29.0
                                                                          $30.5
                                                                           $270
                                                                          $27.0
3% Discounted
                                                                          $23.7
                                                                          $22.5
                                                                          $23.4
                                                                          $23.3
                                                                          $23.2
                                                                          $22.6
                                                                          $23.7
                                                                          $21.9
                                                                          $22.2
                                                                          $22.7
                                                                           $229
                                                                          $26.9
7% Discounted
                                                                          $22.8
                                                                          $20.8
                                                                          $20.9
                                                                          $20.0
                                                                          $19.2
                                                                          $18.0
                                                                          $18.1
                                                                          $16.2
                                                                          $15.8
                                                                          $15.5
                                                                           $187
                                                                          $26.7

Compliance Cost Savings
To assess the impact of the final amendment, EPA estimated the difference in compliance costs for Tier I qualified facilities between the current SPCC rule and the final amendment. Under the amendment, owners and operators of Tier I qualified facilities would have an overall reduction in the burden associated with preparing and modifying an SPCC Plan.
Based on the different compliance requirement options available to Tier I qualified facilities, EPA estimated that annual cost savings for new facilities would be $4,800. Exhibit 6-47 itemizes the individual cost savings that Tier I qualified facilities could incur resulting from the final reduced requirements. The costs savings do not account for the additional paperwork activities associated with the template preparation that partially offset the savings of not preparing a Plan. These costs are averaged over all Tier I qualified facilities, accounting for the probability that individual facilities would incur the cost. As a result, low probability costs (e.g., complying with §112.4(c)) distributed across many facilities yield only nominal per-facility costs.
Exhibit 6-47
Annual Compliance Costs and Potential Compliance Cost Savings per Tier I Qualified Facility (2007$)
Compliance Requirements
Final Amendment
Annual Cost Savings
(before additional cost for template preparation)

Final Amendment
New Facilities
New Plan - 112.3(a)
                                                                          $0.00
                                                                         $4,550
Oil Discharge Reporting - 112.4(c)
                                                                          $0.19
                                                                              -
Modification of Plan - 112.5(a)
                                                                          $0.00
                                                                           $254
Recordkeeping
                                                                           $371
                                                                              -
Total
                                                                           $371
                                                                         $4,800

       The following requirements present key paperwork compliance activities associated with the completion of the Plan template for Tier I qualified facilities in lieu of preparing a full SPCC Plan. While additional requirements apply to Tier I Qualified Facilities (e.g., review drainage control methods to ensure they meet the requirements of 40 CFR part 112), the list focuses on those requirements that are expected to account for a potentially significant hour burden when completing the SPCC Plan template (i.e., those requirements that necessitate more complex technical involvement such as developing procedures or assessing applicable industry standards).
 Assessing aboveground storage tanks for potential discharge on a regular basis or whenever changes are made. This includes taking an inventory of the oil storage containers and assessing each container with regards to potential modes of failure and discharge volume, direction that the oil would travel, and the adequacy of the secondary containment method, as documented in Table G-4 of the template at 40 CFR part 112, Appendix G.
Providing each container with a system or documented procedure to prevent overfills; developing an integrity testing program. This involves, for each storage container, identifying procedures to prevent overfills.
Developing a flow-line maintenance program to prevent discharges from each flowline (applies to oil production facilities only). This includes assessing the flowlines present at the facility and determining, based on industry standards, the appropriate set of procedures, responsible personnel, performance schedule, and recordkeeping.
Developing a program of integrity testing and inspections of bulk storage containers. This includes, for each storage container, identifying the applicable industry standards for inspections and testing, and outlining the appropriate procedures, responsible personnel, performance schedule, and recordkeeping.
Filling out the SPCC Plan template. This involves completing all sections of the template provided in Appendix G of 40 CFR part 112..
Exhibit 6-48 presents the estimated number of hours, and associated cost, involved in meeting each of the key elements of the template SPCC Plan option.
Exhibit 6-48
Estimated Additional Costs to New Tier I Qualified Facilities Introduced by the Final Amendment
Template SPCC Plan Elements
Total Burden
Hours ($52.2/hr)[1]
Cost ($/Year)[3]
Assess Potential for Discharge
                                     1.07
                                                                          $57.2
Provide Systems or Procedures for Preventing Overfills
                                     0.86
                                                                          $46.0
Develop Flowline Maintenance Program[2]
                                     8.00
                                                                           $429
Develop Integrity Testing Program
                                     0.86
                                                                          $46.0
Fill out SPCC Plan Template
                                     0.09
                                                                           $4.7
Total Cost - Storage Facility (98.9% of Tier I qualified facilities)
                                     2.87
                                                                           $154
Total Cost - Oil Production Facility (1.1% of Tier I qualified facilities)
                                     10.9
                                                                           $583
Total Cost  -  Weighted Average
                                                                           $159
1 	All hours are for technical personnel.
2 	Applies to oil production facilities only.
[3]	Cost estimates do not include adjustment for state overlap.

EPA estimated that owners and operators of new Tier I qualified facilities would save $4,800, due to not having to prepare a full SPCC Plan, and would incur an additional cost of $159 when preparing and self-certifying their template SPCC Plan (included in Appendix G of the rule). As a result, Tier I qualified facilities would experience compliance cost savings of $4,640. Because the compliance costs associated with the template SPCC Plan alternative offset a portion of the compliance cost savings estimated for new Tier I qualified facilities, the overall net compliance cost savings for these facilities would be $4,640 per facility.
EPA calculated the total compliance cost savings for Tier I qualified facilities using the projected number of new Tier I qualified facilities and their corresponding per-facility compliance cost savings estimates, which are summarized in the equation below:
        Total Net Cost Savings = Nfac * (NCost Saving-NcostIncrease)*Overlap1
 where,
 NFac = the projected number of new affected Tier I qualified facilities (see Exhibit 6-44).
 NCostSaving = Facility level cost savings for affected Tier I qualified facilities (see Exhibit 6-47).
 NCostIncrease = Facility level cost increase for affected Tier I qualified facilities (see Exhibit 6-48).
OverlapI = 1- estimated percentage reduction in total burden due to state overlap for affected Tier I qualified facilities -- Category I (see Exhibit 5-22).
EPA estimated that the final amendment to the 2002 SPCC final rule would reduce compliance costs by $24.1 million and $23.9 million per year, discounted at 3 percent and 7 percent, respectively. Exhibit 6-49 presents the total annual cost savings for Tier I qualified facilities each year.

Exhibit 6-49
Total Projected Compliance Cost Savings for New Tier I Qualified Facilities with No Individual Aboveground Oil Storage Containers Greater than 5,000 Gallons (2007$ Millions)[1]

Compliance Cost Savings
10- Year Present Value
Annualized

2010
Year 1
2011
Year 2
2012
Year 3
2013
Year 4
2014
Year 5
2015
Year 6
2016
Year 7
2017
Year 8
2018
Year 9
2019
Year 10

Not Discounted
                                                                          $21.9
                                                                          $21.4
                                                                          $23.0
                                                                          $23.5
                                                                          $24.1
                                                                          $24.3
                                                                          $26.1
                                                                          $24.9
                                                                          $26.0
                                                                          $27.4
                                                                         $242.6
                                                                          $24.3
3% Discounted
                                                                          $21.3
                                                                          $20.2
                                                                          $21.0
                                                                          $20.9
                                                                          $20.8
                                                                          $20.3
                                                                          $21.2
                                                                          $19.7
                                                                          $19.9
                                                                          $20.4
                                                                         $205.7
                                                                          $24.1
7% Discounted
                                                                          $20.5
                                                                          $18.7
                                                                          $18.7
                                                                          $17.9
                                                                          $17.2
                                                                          $16.2
                                                                          $16.3
                                                                          $14.5
                                                                          $14.1
                                                                          $13.9
                                                                         $168.1
                                                                          $23.9
[1] See Appendix J in Volume II for more details on the calculation of cost savings.

Underground Emergency Diesel Generator Tanks at Nuclear Power Stations
Background
EPA exempted underground oil storage tanks located at nuclear power generation facilities licensed by the Nuclear Regulatory Commission (NRC). This exemption includes both tanks that are completely buried and tanks that are below-grade and vaulted. An underground storage tank or UST is defined in 40 CFR part 280 as "any one or combination of tanks ...the volume of which is 10 percent or more beneath the surface of the ground." Below-grade vaulted tanks and completely buried tanks that serve as underground emergency diesel generator tanks at nuclear power plants fall within this definition. EPA believes that the NRC operating safety requirements best address the specific and unique operational challenges at nuclear power plants. A site visit by EPA to a nearby nuclear power station provided information to demonstrate similarities between UST safety measures implemented under NRC regulations and SPCC requirements applicable to underground tanks.
Universe of Affected Facilities
Nuclear Power Plants Subject to SPCC
At nuclear power plants, each nuclear reactor unit is required to have at least two emergency diesel generators (EDGs) on site. The NRC requires that nuclear power plants have enough emergency diesel fuel available to run the EDGs for seven days. A site visit by EPA suggests that the backup diesel fuel for these EDGs is stored in aboveground and underground tanks on the site. EPA also assumes that all nuclear plants have USTs to supply diesel fuel for EDG systems. The Utility Solid Waste Activities Group (USWAG), a utility trade association, indicated that there are approximately 163 USTs at existing nuclear power plants.
In addition, the Agency believes that all EDG systems at the nuclear power plants have day tanks, whose cumulatively storage capacity may exceed the 1,320-gallon capacity. EPA estimates that all nuclear power plants have cumulative aboveground oil storage capacities in excess of the 1,320-gallon threshold due to the presence of ASTs to supply USTs, day tanks and oil-filled operation equipment (EDGs), which comprise the EDG system at a nuclear power plant. Furthermore, since most nuclear plants are located in coastal areas or close to other navigable waters or adjoining shorelines, EPA infers that all nuclear power plants are subject to the SPCC regulation.
Although the Agency does not have comprehensive information on the storage capacity of underground tanks at nuclear power plants, the power plants contacted indicated total storage capacities under 1 million gallons. Therefore, EPA assumed that most nuclear power plants could be classified as Category III with total storage capacity between 42,000 gallons and 1 million gallons.
Number of Existing Nuclear Power Plants
To estimate the number of facilities affected by this final amendment, EPA used data sources described in this section. The Nuclear Regulatory Commission reports 104 operating nuclear power reactors in 31 states. Those 104 reactors are located at 65 sites; of these, 33 sites have two or more operating nuclear reactors. For the purpose of this analysis, the Agency used the number of sites as a proxy for the number of facilities since EDG systems that store oil are normally shared by the reactors. As a result, EPA estimated the total number of existing nuclear power plants at 65.
Number of New Generating Units at Nuclear Power Plants
An unfavorable business environment has prevented licensing and construction of new nuclear plants in the United States for more than three decades. No new nuclear plants have been built in the United States since 1974. The last new nuclear generating unit at an existing plant brought online in the United States began operation in 1996. Since then, changes in U.S. nuclear capacity have resulted only from up-rating of existing units and retirements. However, in "Annual Energy Outlook 2007 with Projections to 2030," DOE/EIA projects additions of new nuclear power plants. Upcoming construction of new nuclear plants is primarily attributed to the new tax credit allowing facility owners to reduce their tax liability. Because the earliest date at which the first new nuclear unit eligible for the tax credit could become operational is about 2015, the "de-indexing" of the tax credit has the effect of reducing its real value by about 25 to 30 percent.
Based on information provided by USWAG, each of the new units will have its own EDG system, including EDG fuel tanks. As a result, to assess an economic impact of the final option, EPA estimated the number of generating units at nuclear power plants. The NRC licenses all commercially owned nuclear power plants that produce electricity in the United States. As a result, the NRC reports the number of nuclear power plant applications it expects to receive each calendar year through 2009. EPA also consulted with USWAG on the number of expected construction/operating licenses for new units at nuclear power plants. Combining the information on the number of new units provided by NRC and USWAG, EPA estimated approximately 33 new generating units at 25 sites. Applications for those units are expected to be submitted in 2008-2009. Due to an extended period of licensing and construction, the first generating unit at a nuclear power plant is only expected to come online in 2015. Given the expected applications, EPA assumed that seven new units at nuclear plants would start operation in 2015, 22 units in 2016, and three units in 2017 and one unit in 2018. The time period considered in the regulatory impact analysis for the final amendments is 2010 through 2019. In the remaining years of the analysis, no new units at nuclear plants are projected to come online.
Exhibit 6-50 presents the projected number of new generating units at nuclear power plants from the analysis period of 2010 through 2019.

Exhibit 6-50
Projected Number of New Generating Units at Nuclear Power Plants, Assuming Full Compliance in the Baseline
Category
Number of New Generating Units at Nuclear Power Plants

2010
Year 1
2011
Year 2
2012
Year 3
2013
Year 4
2014
Year 5
2015
Year 6
2016
Year 7
2017
Year 8
2018
Year 9
2019
Year 10
Category I
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
Category II
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
Category III
                                       -
                                       -
                                       -
                                       -
                                       -
                                       7
                                      22
                                       3
                                       1
                                       -
Category IV
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -
                                       -

Baseline Compliance Cost and Cost Savings
As a result of the final amendment, EPA expects that owners and operators of nuclear power plants would lower their total compliance costs due to cost savings associated with the exemption of underground storage tanks. Primarily, a facility owner/operator would save the cost for installation and maintenance of secondary containment for underground tanks. The Agency assumed that this amendment would not change engineering practice with respect to tank inspections because the NRC Regulatory Guide requires inspection and testing of fuel oil systems.
To estimate cost savings associated with the final amendment for nuclear power plants, based on information provided by USWAG, EPA assumed that on average, underground storage tanks account for approximately one-third of the total oil storage capacity at a nuclear plant. Therefore, facility owners and operators would save about 33 percent of the compliance cost associated with the secondary containment requirement.
Based on information provided by USWAG, EPA assumed that most owners and operators of power plants determine "impracticability" of secondary containment for underground tanks and provide a written commitment of manpower, equipment, and materials, as well as a contingency plan prepared in accordance with 40 CFR part 109. Therefore, based on the final amendment, facility owners and operators would save the cost of determining impracticability of secondary containment for underground storage tanks. EPA assumes that, consistent with EPA and OMB economic guidelines, existing facilities are in full compliance with the existing SPCC requirements and only new facilities would incur cost savings from this final amendment. The Agency estimates that the cost savings for not having to determine impracticability would be $615 per generating unit. As a result, the cost savings to owners/operators of nuclear power plants would be equal to the baseline cost of compliance with this requirement.
The total cost savings from the final amendment were calculated by multiplying the unit cost savings with the total number of new generating units at nuclear power plants expected to become operational during the analysis period. EPA estimated that on average, the final amendment would reduce compliance costs by about $5,000 and $4,910 per year, discounted at 3 percent and 7 percent, respectively (see Exhibit 6-51).

Exhibit 6-51
Projected Annual Compliance Cost Savings from the Final Amendment for Nuclear Power Plants (2007$)[1]

Compliance Cost Savings

2010
Year 1
2011
Year 2
2012
Year 3
2013
Year 4
2014
Year 5
2015
Year 6
2016
Year 7
2017
Year 8
2018
Year 9
2019
Year 10
4- Year Present Value[2]
Annualized
Not Discounted
                                                                             -
                                                                             -
                                                                             -
                                                                             -
                                                                             -
                                                                         $4,300
                                                                        $13,500
                                                                         $1,840
                                                                           $615
                                                                              -
                                                                        $20,300
                                                                         $5,070
3% Discounted
                                                                             -
                                                                             -
                                                                             -
                                                                             -
                                                                             -
                                                                         $3,600
                                                                        $11,000
                                                                         $1,460
                                                                           $471
                                                                              -
                                                                        $19,200
                                                                         $5,000
7% Discounted
                                                                             -
                                                                             -
                                                                             -
                                                                             -
                                                                             -
                                                                         $2,870
                                                                         $8,420
                                                                         $1,070
                                                                           $334
                                                                              -
                                                                        $17,800
                                                                         $4,910
[1]	The baseline cost of compliance is the same as the compliance cost savings.
[2] 	Cost savings are projected for four years only, based on the expected applications of new nuclear units.

Overall Compliance Cost Savings
The Agency estimates that the combined 2008 and 2009 final SPCC amendments that accounts for the removed provisions in 2009,would result in significant compliance burden reduction for industry as compared to the 2002 rule. The total cost savings ranges from a low estimate of $91.7 million and $91.0 million, a mid-point estimate of $95.5 million and $94.8 million and a high estimate of $99.4 million and $98.6 million at the 3 percent and the 7 percent discount rates respectively. The low estimate reflects the low estimate for security requirements (50 percent of all facilities affected) and AFVO (40 percent of AFVO facilities affected); high estimate reflects the high estimate for security requirements (75 percent of all facilities affected) and AFVO (90 percent of all AFVO facilities affected); and the mid-point estimate reflects the mid-point of the low and high estimates for security requirements (75 percent of all facilities affected) and AFVO (65 percent of AFVO facilities affected).
Exhibit 6-52 presents the costs savings by all the amendments at the 3 percent and 7 percent discount rate. At the 7 percent discount rate, the mid-point estimate of the annualized cost savings from final amendments to the SPCC rule are approximately $8 million from the exemption of hot-mix asphalt containers, $4 million from the exemption of pesticide application equipment and related mix containers, $2 million from the exemption of residential heating oil containers, $3 million from changes in facility diagram requirements, $24 million from the streamlined requirements for Tier I qualified facilities, $9 million from the amendments to the security requirements, $11 million from the amendments to integrity-testing requirements, $2 million for owners and operators of AFVO facilities, $24 million for owners and operators of oil production facilities from the six-month delay in SPCC Plan preparation and implementation, $7 million from the alternative compliance measures for flow-through process vessels in lieu of sized secondary containment, and less than $1 million from the exemption of underground oil storage tanks at nuclear power generation facilities.

Exhibit 6-52
Summary of Estimated Cost Savings Associated with the Final Amendments (2007$ Millions)
Rule Component/Scenario[1]
Annualized Cost Savings

                               Discounted at 3%
                               Discounted at 7%
Hot-Mix Asphalt
Exempted HMA containers
                                                                            $8
                                                                            $8
Pesticide Application Equipment
Exempted pesticide application equipment and related mix containers
                                                                            $4
                                                                            $4
Applicability of Mobile Refueler Requirements to Farm Nurse Tanks

Clarified that nurse tanks used on farms are considered mobile refuelers
                                                       No monetized cost impact
                                                       No monetized cost impact
Residential Heating Oil Containers
Exempted residential heating oil containers
                                                                            $2
                                                                            $2
Facility Definition
Clarified the definition of "facility"
                           No monetized cost impact
                           No monetized cost impact
Facility Diagram
Revised facility diagram requirement
                                                                            $3
                                                                            $3
Tier I Qualified Facilities
Provided streamlined requirements for Tier I qualified facilities with aggregate storage capacity less than 10,000 gallons and no containers greater than 5,000 gallons
                                                                           $24
                                                                           $24
General Secondary Containment
Provided final revisions to the general secondary containment provision
                           No monetized cost impact
                           No monetized cost impact
General Secondary Containment for Non-Transportation-Related Tank Trucks
Extended regulatory relief for mobile refuelers to non-transportation-related tank trucks
                           No monetized cost impact
                           No monetized cost impact
Security Requirements
Low Estimate (50% of all facilities affected)
                                                                            $6
                                                                            $6
Mid-Point Estimate (75% of all facilities affected)
                                                                            $9
                                                                            $9
High Estimate (100% of all facilities affected)
                                                                           $12
                                                                           $12
Integrity Testing
Provided greater flexibility in the use of industry standards for integrity testing requirements
                                                                           $11
                                                                           $11
Animal Fats and Vegetable Oil
Amended integrity testing requirements for AFVO containers that meet certain criteria
Low Estimate (40% of facilities affected)
                                                                            $1
                                                                            $1
Mid Point Estimate (65% of facilities affected)
                                                                            $2
                                                                            $2
High Estimate (90% of facilities affected)
                                                                            $3
                                                                            $3
Oil Production Facilities
Provided six month delay for Plan preparation and implementation
                                                                           $24
                                                                           $24
Alternative compliance option for flowlines and intra-facility gathering lines in lieu of secondary containment
                           No monetized cost impact
                           No monetized cost impact
Provided an alternative compliance option for flow-through process vessels
                                                                            $7
                                                                            $7
Provided an alternative compliance option for produced water containers
                                                       No monetized cost impact
                                                       No monetized cost impact
Man-Made Structures
Allowed to consider manmade structures in determining SPCC rule applicability
                           No monetized cost impact
                           No monetized cost impact
Nuclear Power Stations
Exempted underground oil storage tanks at nuclear power generation facilities
                                 Less than $1
                                 Less than $1
Wind turbines
Clarified applicability of the rule to wind turbines used to produce electricity
                           No monetized cost impact
                           No monetized cost impact
Total: Low Estimate
                                                                         $91.7
                                                                         $91.0
Total: Mid-Point Estimate
                                                                         $95.5
                                                                         $94.8
Total: High Estimate
                                                                         $99.4
                                                                         $98.6
1 	Cost impacts are presented by rule component; impacts across industries are not separated out.

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Chapter 7

Impacts on Human Health, Welfare and the Environment

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Impacts on Human Health, Welfare and the Environment
The principal effect of the final amendments is to lower compliance costs for owners and operators of certain types of facilities, as discussed in detail in Chapter 6. There would be environmental and human health impacts of these rule amendments if the amendments result in a change in threat of discharge. Thus, the first step is to determine if the amendments have an impact on discharges. In the absence of detailed data on oil discharges, it is difficult to assess quantitatively the extent to which the final amendments are likely to affect the oil discharge threat, i.e., to estimate, for each amendment, the corresponding increase or decrease in both the incident frequency and volume of oil discharged. Therefore, the Agency relied on available sources of information, including available data on historical oil discharges, to inform a qualitative evaluation of changes in oil discharge threat.
Oil Discharge Threat
The following sections provide a qualitative assessment of the impact of the final rule amendments on the oil discharge threat, focusing on those factors most likely to affect either the frequency of incidents, or the volume of oil discharged. Final amendments that are intended only to provide clarity on rule requirements are not discussed here, as they are not expected to affect the oil discharge threat. As discussed in detail in the sections below, the Agency concludes that the final amendments provide relief in areas that are expected to be equally protective of the environment and are not likely to change the threat of discharge. For example, EPA exempted HMA containers since the properties of HMA make it unlikely to "flow" into navigable waters or adjoining shorelines; EPA is providing flexibility to owners and operators to determine the appropriate integrity testing of animal fat and vegetable oil (AFVO) containers that meet specific requirements (shop-built, bottom drainage) that reduce corrosion damage and therefore reduce the likelihood of an oil discharge.
Hot-Mix Asphalt (HMA)
In 2008, EPA exempted HMA containers from SPCC requirements. Since HMA material (the mixture of asphalt cement and aggregates) is unlikely to flow as a result of the entrained aggregate, there is no reasonable expectation that any release of HMA would reach navigable waters or adjoining shorelines. This is illustrated by the lack of incidents reported either to the National Response Center (NRC) or in the news media of discharges of hot-mix asphalt mixtures to navigable waters or adjoining shorelines from fixed facilities regulated under SPCC. Further, Regional Administrators would continue to have the option under §112.1(f) to require an owner or operator of a facility, including one solely handling or storing HMA mixtures, to prepare or amend and implement an SPCC Plan or any applicable part, including HMA containers, if a determination is made that it is necessary in order to prevent a discharge of oil into waters of the United States or upon adjoining shorelines. Therefore, this change is not likely to affect the threat of an oil discharge.
Pesticide Application Equipment and Related Mix Containers
In 2008, EPA exempted pesticide application equipment and related mix containers regardless of use location from SPCC requirements. As noted in Section 6.2, a couple of studies suggest that the capacity of pesticide application equipment can range from 500 gallons to 1,200 gallons depending on the farm size. However, in evaluating the threat posed by pesticide containers and application equipment when promulgating the Standards for Pesticide Containment Structures in 40 CFR part 165, Subpart E, under authority from the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), EPA's Office of Pesticide Programs (EPA/OPP) noted that on-farm bulk storage of pesticides remains rare (71 FR 47422, August 16, 2006, as amended at 73 FR 64227, October 29, 2008). Further, EPA/OPP found that there was insufficient evidence of contamination occurring as a result of these containers or equipment to warrant their regulation under the pesticide container-containment rule. This may be the result of best management practices such as "Farm*A*Syst" programs (partnerships between government agencies and private business that foster pollution prevention on farms) that some states have, which suggest that farms: (1) adhere to pesticide label instructions and prepare only the necessary amount needed for immediate use; (2) prepare the pesticide mix immediately before application; (3) fill the equipment spray tank half full with water prior to mixing in the pesticide formulation; and (4) mix and load pesticides on a concrete pad. Therefore, EPA expects that the pesticide application equipment would not pose a significant threat of discharge and the rule amendment is not likely to change the discharge threat as compared to the baseline.
Residential Heating Oil Containers
In 2008, EPA exempted containers that are used to store oil for the sole purpose of heating a single-family residence. The residential oil containers are typically either 275 gallons or 550 gallons in size. To the extent that a smaller total storage capacity has lower threat of discharge (EPA's 1995 Survey of Oil Storage Facilities suggests that an important determinant of discharge threat is the total oil storage capacity), this amendment is not expected to have an impact on oil discharge threat.
Security
In 2008, EPA amended the rule to allow facility owner/operators to tailor their security measures to the facility's specific characteristics and location, rather than comply with the current, more prescriptive set of requirements. This provides a facility owner/operator with the flexibility to determine the most adequate security measures to protect the facility from vandalism and to assist in the discovery of oil discharges. For example, the amendment tailors the requirement for fencing to allow an owner/operator to only install fencing around the oil handling, processing, and storage areas of facility, rather than install fencing around the entire facility.
Because the security requirements, found at §112.7(g), in the 2006 SPCC rule are subject to environmental equivalence under §112.7(a)(2), a facility owner/operator already has the flexibility to provide tailored security measures by demonstrating that the alternative measures are environmentally equivalent to the required measures in §112.7(g). Therefore, this amendment is not expected to affect the threat of an oil discharge.
Integrity Testing Requirements for Animal Fats and Vegetable Oils
The 2008 final rule allowed the PE or owner/operator certifying an SPCC Plan at a facility that is subject to the U.S. Food and Drug Administration (FDA) regulation found at 21 CFR part 110, Current Good Manufacturing Practice in Manufacturing, Packing, or Holding of Human Food, to determine the type of integrity testing appropriate for shop-built containers that store fully refined food oil and also satisfy other requirements. This rule amendment tailored the requirements in §112.12(c)(6) of the 2006 SPCC rule for eligible containers, which require containers to be tested on a regular schedule, using a combination of both visual inspection and another non-destructive testing technique. Instead, the Plan preparer can design a testing program and schedule that is best suited for these eligible food oil containers.
Because the integrity testing requirements, found at §112.12(c)(6), are already subject to environmental equivalence under §112.7(a)(2), a facility owner/operator already has the flexibility to specify an alternative integrity testing program by demonstrating that the alternative is environmentally equivalent to the required measures in §112.12(c)(6). Additionally, in developing this rule amendment, EPA determined the eligibility criteria for this streamlined requirement specifically to keep the threat of oil discharge that may occur from less stringent testing requirements the same. The regulation at 21 CFR part 110 specifies requirements for the design, construction, and use of equipment used at food processing facilities, including containers that hold oil. Other criteria, such as requiring that containers must be made from austenitic stainless steel and be self-draining, ensure that the containers are less likely to suffer from corrosion. Criteria such as the requirement for containers to be shop-built and have manholes for internal inspection are design elements that make visual inspection an effective inspection method, should the Plan preparer rely on visual inspection only. Therefore, this amendment is not likely to increase the threat of oil discharge.
Oil Production Facilities
In 2008 and 2009, EPA made several amendments that would affect oil production facilities. These include amendments to the Plan preparation and implementation date; alternative measures for flow-through process vessels; produced water containers and flowlines and intra-facility gathering lines. In 2008 EPA included alternative qualified facility criteria for oil production facilities and an exemption for certain produced water containers, which are being removed in 2009.
Six-month delay: In 2008, EPA extended, by six months, the timeframe by which the owner or operator of a new oil production facility must prepare and implement an SPCC Plan. A facility owner or operator is likely to use this relief to develop an SPCC Plan and certify it after operations have stabilized. It is difficult to determine what the effect of this delay would be on the oil discharge threat and if there is a higher likelihood of threat in the initial months while operations are beginning. The data on oil discharges does not provide information on the age of the facility.
Flow-through process vessels: In 2008, EPA provided an alternative option for flow-through process vessels at oil production facilities to comply with the general secondary containment requirement and additional oil spill prevention measures in lieu of sized secondary containment requirements. The Agency estimated that a large percentage of these installations are already within a facility's tank battery and therefore have adequate sized secondary containment; only heater-treaters are likely to be located outside the tank battery. The oil discharge threat would likely change only insofar as heater-treaters outside the tank battery would be subject to general containment rather than sized secondary containment, where the former are built to prevent a "typical" discharge.

Since the relief provided by this amendment is subject to revocation if a facility has a reportable discharge, EPA expects that it would not have a significant negative effect on oil discharge threat. For flow-through process vessels, EPA also finalized the amendment to require the inspection of equipment components, including ancillary equipment; prompt removal of any oil accumulations; and corrective action should a discharge occur. These requirements are expected to provide further protection from oil discharges.
Flowlines and intra-facility gathering lines: In 2008, EPA also amended the rule to allow contingency planning and written commitment of resources in lieu of secondary containment requirements for flowlines and intra-facility gathering lines, without the requirement for an impracticability determination. EPA provided more prescriptive requirements for a flowline/intra-facility maintenance program. Flowlines are certainly at threat of discharges. The flowline/gathering line maintenance is currently required by the existing 2002 SPCC rule and this final amendment is adding clarity and specificity to the existing requirements. In lieu of a secondary containment requirement, EPA is requiring a contingency plan and written commitment of manpower, equipment, and materials for flowlines and intra-facility gathering lines at an oil production facility, and is prescribing specific requirements for the existing flowline and intra-facility gathering line maintenance program. The requirements that are expected to prevent discharges, improve discharge detection, and mitigate discharges include:
      1. Compatibility of flowlines and intra-facility gathering lines and associated valves and equipment with the type of production fluids and their potential corrosivity, volume, and pressure, and other conditions expected in the operational environment;
      2. Visual inspection for leaks, discharges, corrosion, etc.;
      3. Corrective action/repairs; and
      4. Prompt removal of any accumulations of oil discharges.
 Insofar as there are owners and operators of facilities with a maintenance that does not have these requirements and would follow a more prescriptive maintenance plan as required by the SPCC rule, the oil discharge threat would be reduced.
Alternative Qualified Facility Criteria for Oil Production Facilities: In 2009, EPA is removing the alternative criteria for an oil production facility with marginal wells to be eligible to self-certify an SPCC Plan as a qualified facility. EPA believes that the alternative qualified facility eligibility criteria for onshore oil production facilities would not effectively protect the environment from discharges of oil in quantities that may be harmful. The alternative qualified facility eligibility criteria is based on the flow rate of oil at the facility, and undermines the existing capacity based criteria. Additionally, small oil production facilities are more complex than other small facilities, and the amount of oil discharged from oil production facilities is increasing. EPA is removing the alternative criteria for oil production facilities because:
* Allowing unrestricted oil storage capacity undermines the existing qualified facility eligibility criteria and may pose an environmental threat,
* The alternative qualified facility eligibility criteria for production facilities includes more complicated facilities that may pose a higher threat of oil discharge, and
* The volume of oil discharged from production facilities are increasing.
Many small oil production facilities produce low quantities of oil on a daily basis. Despite the daily low produced amount, the accumulated quantity stored can far exceed 10,000 U.S. gallons. Without a limit on storage capacity, the Agency is concerned this approach increases the likelihood that relatively high-volume facilities will self-certify their SPCC Plan without the spill prevention benefits afforded by PE review and certification. Finally, the production rate criterion does not include the associated fluids, such as produced water, which typically contains oil. Marginal or stripper wells are often older and near the end of their production life. The fraction of produced water generated by each stripper well may be far greater than that generated by other producing wells and will likely require significant storage container capacity prior to re-injection or removal from the facility. It is potentially possible that there may be containers storing produced water and oil in large quantities (e.g., up to one million gallons) at oil production facilities qualifying under these alternative criteria. The Agency believes that establishing a threshold for the production rate per well does not limit the amount of oil storage, including oils in associated fluids.
Upon reconsideration, EPA has concluded that the type and scale of operations and the equipment involved at those oil production facilities that may meet the alternative criteria, and that they are generally more complex than the non-production facilities eligible under the qualified facility approach in the December 26, 2006 amendments (71 FR 77266). Although there may be some similarities across production facilities, each is unique and tailored to address factors, such as the oil field, production rate, type of fluid, location on a platform or onshore, fluid viscosity, separation process, and type of water injection or disposal. Given these factors, an oil production facility's configuration and degree of complexity is variable, regardless of flow rate.

The Agency believes that small oil production facilities (i.e., those comprised of marginal wells) have and can continue to pose a threat of an oil discharge to navigable waters and adjoining shorelines. EPA has reviewed the spill data for the oil production sector contained in its study of the exploration and production sector and while these data do not characterize the extent of environmental damage caused by oil discharges from small oil production facilities, it does demonstrate that the volume of oil discharged from onshore oil production facilities are increasing, and the number of oil discharges on a yearly basis has remained the same, despite a decline in crude oil production. In addition, oil production facilities are often unattended, and typically located in environmentally sensitive and remote environments, which potentially increase the threat of environmental damage of an oil discharge from these facilities. Therefore, EPA believes that removing this provision will reduce the threat of oil discharge.

Produced Water Containers. In 2009, EPA is removing the exemption for certain produced water containers that do not contain oil in quantities that may be harmful as certified by a PE.  EPA believes that produced water containers present a threat of discharge that can cause harm to the environment and human health.. The comments received by EPA generally confirm that the presence of oil in produced water is not exceptional, but rather is expected as a matter of regular operations. The separation equipment found at onshore oil production facilities are not perfectly efficient at separating oil from the produced fluids and become progressively less efficient with age. Furthermore, in the event of a discharge, the aqueous phase of the produced water mixture may serve to carry the oil farther overland and into waters than cases where crude oil alone is discharged. The spill data shows that produced water containers are indeed a common source of oil discharges from onshore oil production facilities. Even if a produced water container has a very small amount of oil, the container still holds the potential to cause harm.
Finally, produced water containers may be equally or even more likely to fail than other containers in the tank battery. Corrosion as a common cause of oil and produced water discharges at onshore oil production facilities. The higher salt content of produced water fluids as compared to crude oil may lead to the increased corrosion rate of metallic components of the produced water storage system. The oil production process is configured to send continuously flowing and treated well fluids to the storage containers, with the produced water containers often located at the end of that process. The Agency's review of the circumstances of past oil discharges reported to the NRC shows that produced water containers often receive the additional well fluids when treatment equipment or appurtenances fail or when a pumper's scheduled visit is delayed, thereby increasing the amount of oil entering the produced water container and the threat that the tank will overflow, or otherwise discharge oil to navigable waters or adjoining shorelines.
Therefore, EPA believes that removing the exemption for produced water containers will reduce the threat of oil discharge.
Tier I Qualified Facilities
In 2008, EPA further streamlined requirements for a subset of qualified facilities. Under this option, EPA allows qualified facilities with a maximum individual oil storage container capacity of 5,000 gallons (called "Tier I qualified facilities") to complete and implement a self-certified SPCC Plan, following a template provided by EPA. Qualified facilities are not required to have their Plans certified by a Professional Engineer (PE). Additionally, the use of the simplified Tier I template does not allow for a "hybrid" approach whereby a PE certifies sections of the Plan that involve environmentally equivalent measures or determinations that secondary containment is impracticable. Therefore, minimal to no involvement of a PE is expected in the development of an SPCC Plan at a Tier I qualified facility. EPA designed the Tier I template to be straightforward and simple for a Tier I facility owner/operator to complete. The Plan is meant to cover relatively simple operations, such as those where only containers up to 5,000 gallons would be used, and for which appropriate discharge prevention measures are relatively standard and can more readily be selected and implemented.
In designing the template, EPA removed certain provisions that do not apply to Tier I qualified facilities (based on the criterion that they would not have oil containers with capacities greater than 5,000 gallons). For example, the requirement for brittle-fracture evaluation (§112.7(i)) has been removed. This provision is only applicable to field-constructed aboveground containers that would be potentially subject to brittle-fracture failure -- which are by their nature larger size containers greater than 5,000 gallons in capacity. Certain other provisions have been removed or tailored for Tier I qualified facilities directly the threat of discharge at a facility with only smaller size containers is expected to be low. For example, the requirement to prepare a facility diagram was removed for Tier I qualified facilities, because qualified facilities with a maximum container capacity of 5,000 gallons are expected to be small and simple in configuration -- most qualified facilities have only a few containers, since the facility total storage capacity for qualified facilities may not exceed 10,000 gallons. The benefit of a diagram for such simple facility layouts would be minimal, and removing this requirement is therefore not expected to increase the threat of oil discharge. Finally, EPA specifically set a single aboveground container capacity limit of 5,000 gallons by considering industry standards for integrity inspections of bulk storage containers, which make a distinction for this size container in terms of the level of expertise and inspection frequency needed to assess the continued integrity of an in-service container.
Distributional Analysis
The final amendments to the SPCC rule will result in direct and indirect effects that may precipitate the transfer of economic benefits among various industry sectors. One direct impact of the amendment is the alternative offered to owners and operators of qualified facilities that allows them to use a template SPCC Plan. Additionally, facilities that store animal fats and vegetable oils may not have to perform integrity testing on their tanks, and owners and operators of production facilities would experience decreases in compliance costs that differ from the decreases experienced by farms and other facilities. However, all facilities would have the flexibility to choose adequate site-specific security measures, for example, and would consequently have lower compliance costs. The final amendments also give flexibility to facilities to define non-contiguous parcels as different facilities in a way that minimizes their cost. The new option to self-certify the SPCC Plan decreases the demand for PE certification and/or SPCC Plan development.
There are likely to be many indirect effects of the final amendments that are not estimated or comprehensively discussed in this analysis. However, to illustrate how they might operate, some examples are as follows. The final amendments no longer require facility boundaries to be fenced. This could lead to changes in demand for fencing. The reduction in demand for fencing would result in a transfer of income from fence suppliers to owners and operators of facilities. In the same way, to the extent that AFVO facilities were relying on outside professionals to conduct integrity testing, the fee that was previously charged by professionals would instead be transferred back to owners and operators of AFVO facilities. Further, to the extent that the facilities would rely on PEs to determine the type of integrity testing that should be conducted, there could be a transfer of resources from the owners and operators of AFVO facilities to the engineers.
Another aspect of the distributional analysis is the spatial impact of the rule with respect to the location of regulated facilities. While we lack information on the specifics of facility locations, EPA acknowledges that clustering of SPCC-regulated facilities exists (such as oil production facilities in the Gulf of Mexico coastal states). Therefore, nationally estimated impacts on owners and operators of regulated facilities may be spatially disproportional.

Chapter 8

Small Entity Impacts, Executive Orders, and Other Required Analyses

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Small Entity Impacts, Executive Orders, and Other Required Analyses
The purpose of this report is to present the final amendments and the alternatives considered and to analyze their respective costs and benefits. In addition to these analyses, several other types of impacts are important to consider in evaluating the effects of a regulation. This chapter presents analyses that report whether the amendments to the SPCC rule portion of the Oil Pollution Prevention regulations impact the financial condition of small entities, as required by the Regulatory Flexibility Act (RFA) and Small Business Regulatory Enforcement Fairness Act (SBREFA). It also responds to Executive Order 13132 - Federalism; Executive Order 13175 - Consultation and Coordination With Indian Tribal Governments; Executive Order 13045 - Protection of Children From Environmental Health & Safety Risks; Executive Order 13211 - Actions That Significantly Affect Energy Supply, Distribution, or Use; National Technology Transfer and Advancement Act; and the Paperwork Reduction Act (PRA).
Regulatory Flexibility Act and Small Business Regulatory Enforcement Fairness Act
The RFA requires federal agencies to determine whether their regulatory actions will have a significant economic impact on a substantial number of small entities, including businesses, non-profit organizations, and government. If an agency does not or cannot certify that a final regulation will not have a significant economic impact on a substantial number of small entities, it must prepare a regulatory flexibility analysis and examine alternatives to the regulation that may reduce adverse economic effects on significantly impacted small entities.
In 1996, Congress enacted SBREFA, which amended the RFA to strengthen its analytical and procedural requirements and to expedite congressional review of rules. SBREFA amended the RFA to reference the definition of a "small entity" found in the Small Business Act, which itself authorizes the Small Business Administration (SBA) to further define "small business" by regulation. The SBA's small business definitions are codified at 13 CFR 121.601, and the SBA reviews and reissues these definitions every year. Size standards are given either in a revenue threshold (presented in thousands of dollars) or in an employee number standard (presented in number of employees). SBA defines a size standard as "the largest that a for-profit concern can be and still qualify as a small business for Federal Government programs," and the size standards are generally calculated using the average annual receipts or the average employment of the entity.
In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives "which minimize any significant economic impact of the final rule on small entities." Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.
The final amendments to the SPCC rule would reduce the burden on small businesses to the extent that these businesses are eligible for reduced regulatory requirements offered to hot-mix asphalt facilities, oil production facilities, facilities that produce or process AFVO, Tier I qualified facilities, and others. Because the SPCC rule categorizes affected entities based on oil storage capacity while SBA defines small businesses based on the business's total number of employees or total annual revenue, EPA does not know the number of SPCC-regulated facilities that are also SBA-defined small businesses. Nevertheless, given their resource constraints, owners and operators of small businesses are likely to take advantage of and benefit from the regulatory burden relief offered by the final amendments.
Executive Order 13132 - Federalism
Executive Order 13132, entitled "Federalism" (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure "meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications." "Policies that have federalism implications" is defined in the executive order to include regulations that have "substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government."
The SPCC rule amendments do not have federalism implications. They would not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Under CWA section 311(o), states may impose additional requirements, including more stringent requirements, relating to the prevention of oil discharges to navigable waters and adjoining shorelines. EPA recognizes that some states have more stringent requirements (56 FR 54612, October 22, 1991). These rule amendments will not preempt state law or regulations. Thus, Executive Order 13132 does not apply to this action.
Executive Order 13175 - Consultation and Coordination with Indian Tribal Governments
Executive Order 13175, entitled "Consultation and Coordination With Indian Tribal Governments" (59 FR 22951, November 6, 2000), directs federal agencies to consider whether a rule has tribal implications (i.e., whether it has substantial direct effects on tribal governments, on the relationship between the federal government and the Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes). These rule amendments do not have tribal implications, as specified in Executive Order 13175. These rule amendments would not significantly or uniquely affect communities of Indian trial governments. Thus, Executive Order 13175 does not apply to this action.
Executive Order 13045 - Protection of Children from Environmental Health & Safety Risks
Executive Order 13045,"Protection of Children from Environmental Health Risks and Safety Risks" (62 FR 19885, April 23, 1997) applies to any rule that: (1) is determined to be "economically significant" as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.
EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This rule amendment is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.
Executive Order 13211 - Actions that Significantly Affect Energy Supply, Distribution, or Use
Executive Order 13211, entitled Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001), directs federal agencies to identify actions that will have a significant adverse energy effect. Adverse effects are defined as:
Reductions in crude oil supply in excess of 10,000 barrels per day
Reductions in fuel production in excess of 4,000 barrels per day
Reductions in coal production in excess of 5 million tons per year
Reductions in natural gas production in excess of 25 million cubic feet per year
Reductions in electricity production in excess of 1 billion kilowatt-hours per year or in excess of 500 megawatts of installed capacity
Increases in energy use required by the regulatory action that exceed any of the thresholds above
Increases in the cost of energy production in excess of 1 percent
Increases in the cost of energy distribution in excess of 1 percent
Other similarly adverse outcomes
The SPCC rule regulates owners and operators of facilities that comprise the energy sector  -  Oil and Gas Production, Electric Utility Companies, Petroleum Refineries, Petroleum Bulk Stations and Terminals, and owners and operators of facilities in alternate energy sectors including Biomass Refineries, Hydroelectric Power Plants, Wind Power Utilities, and Nuclear Powered Electric Utilities. Adverse effect on energy supply, distribution, and use would result if the rule imposes expenditures on the energy sector and these expenditures impact the profitability significantly. However, the final amendments to the SPCC rule reduce the burden on owners and operators of regulated facilities; EPA does not expect an adverse impact of the rule on energy supply, distribution, or use.
National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs federal agencies to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs federal agencies to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.
The owner or operator of a facility subject to the SPCC rule has the flexibility to consider applicable industry standards in the development of an SPCC Plan, in accordance with good engineering practice. However, this rulemaking does not involve technical standards, as it does not set or incorporate by reference any one specific technical standard. Therefore, the NTTAA does not apply.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) (superseding the PRA of 1980) is implemented by OMB and requires that agencies submit a supporting statement to OMB for any information collection that solicits the same data from more than nine parties. The PRA seeks to ensure that federal agencies balance their need to collect information with the paperwork burden imposed on the public by the collection.
The definition of "information collection" includes activities required by regulations, such as permit development, monitoring, recordkeeping, and reporting. The term "burden" refers to the "time, effort, or financial resources" the public expends to provide information to or for a federal agency, or to otherwise fulfill statutory or regulatory requirements. Under PRA, the paperwork burden is measured in terms of annual time and financial resources the public devotes to meet one-time and recurring information requests (44 U.S.C. 3502(2); 5 CFR 1320.3(b)).
Information collection activities may include:
Reviewing rule requirements
Using technology to collect, process, and disclose information
Adjusting existing practices to comply with requirements
Searching data sources
Completing and reviewing the response
Transmitting or disclosing information
Agencies must provide information to OMB on the parties affected, the annual reporting burden, and the annualized cost of responding to the information collection. The SPCC rule (40 CFR part 112) requires and establishes procedures for the preparation and implementation of SPCC Plans. As discussed in chapters above, owners and operators of regulated facilities must prepare SPCC Plans in accordance with good engineering practices and have them approved by a person with the authority to commit the resources necessary to implement the SPCC Plan. The Information Collection Request (ICR) Supporting Statement reports the estimated paperwork-related burden resulting from the SPCC rule and incorporates the amendments to the SPCC rule at 40 CFR part 112, expected to be finalized in fall 2008. EPA estimates that approximately 640,000 facilities will incur paperwork-related burden in the first year of the ICR and the total reporting and recordkeeping burden for these facilities will amount to approximately 8 million hours in each year of this ICR. The Agency estimates that as a result of the 2008 and 2009 final amendments to clarify and streamline certain SPCC requirements, the reporting and recordkeeping burden will decrease by 1.3 million hours. These rule amendments would reduce capital and operating and maintenance costs by an estimated $7.5 million on an annualized basis.
Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations
Executive Order 12898 (59 FR 7629, February 16, 1994) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. The overall effect of the action is to decrease the regulatory burden on facility owners or operators subject to its provisions.
Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is a "major rule" as defined by 5 U.S.C. 804(2) because it will likely result in an annual effect on the economy close to $100 million.

Chapter 9

Key Limitations and Assumptions

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Key Limitations and Assumptions
According to Executive Order 12866, agencies are required to assess all costs and benefits of regulatory activities, including quantitative and qualitative measures. The EO also requires assessment of all benefits and costs including, but not limited to, those related to the environment, public health and safety, distributive impacts, and issues of equity.