Confusion at Federal Level Leaves Farmers Unsure of SPCC Rule Compliance
Peggy Hall, Asst. Professor, OSU Extension Agricultural and Resource Law Program
A common joke among attorneys is that the answer to every legal question is “maybe,” and that answer is appropriate when asking whether farms will be exempted from complying with the Oil Spill Prevention, Containment and Countermeasure (SPCC) rule.
May 10, 2013 was the compliance deadline for the EPA rule requiring SPCC plans for farms storing above a threshold amount of oil. But several legislators have spoken out against the regulation and intend to exempt most farms from its requirements. As we reported in an earlier post, legislators successfully delayed EPA’s ability to enforce the SPCC rule against farms until September 23, 2013, and also drafted the legislation to exempt many farms from the SPCC rule. But while the Senate and House have each passed proposals with SPCC exemption language, they’ve used two different bills to do so–the Senate’s Water Resources Development Act and the House’s Farm Bill. Neither bill has passed both chambers and the SPCC exemption remains in limbo today, the date after which the EPA may begin enforcing the rule.
In mid-August, two sponsors of the exemption, Senators Inhofe (R-OK) and Pryor (R-AR), sent a letter to EPA Administrator Gina McCarthy regarding SPCC enforcement. The letter clarified that Congress plans to exempt most farms from the rule and suggested that the EPA should not attempt to retroactively enforce the rule back to the original compliance date of May 10, 2013. Time will tell whether the senators’ letter will prevent EPA from penalizing farms that did not have an SPCC plan by May 10 but had an oil spill anytime after the May 10 compliance deadline.
What Should Farmers do about SPCC Plans now?
Farmers who have been waiting to see if Congress would exempt them from the SPCC rule have to make a decision: comply now or risk penalties for non-compliance. A few considerations may help the decision-making process:
- Operating without an SPCC plan carries financial risk. If a farm that is subject to the SPCC rule does not have a plan but does have an oil spill that discharges into a waterway, the farm will incur additional penalties for failing to have and implement an SPCC plan. These penalties vary depending upon the size of the facility and the severity of the spill; our research revealed recent fines ranging from $1,500 to over $55,000. Our research also shows the cost of an SPCC plan from a certified engineer or consulting firm to begin at around $1,000, with higher costs for larger farms.
- Only certain farms must comply with SPCC. Farms that store less than 1,320 gallons of diesel, gasoline, hydraulic oil, lube oil, crop oil or vegetable oil aboveground or less than 42,000 gallons below ground do not need an SPCC plan. All other farms might need an SPCC plan if it’s possible that spilled oil could discharge into a waterway. To learn more about whether a farm is subject to the SPCC plan rule, visit here.
- Smaller, lower-risk farms can “self-certify” their SPCC plan. The SPCC rule allows farms with smaller oil storage and no history of significant oil spills (“Tier I farms”) to create and implement an SPCC plan; other farms require certification by an engineer. The EPA provides a model template for Tier I farms on their website. Be aware, however, that preparing the plan requires some work: a thorough assessment of the farm’s oil storage, selection and installation of appropriate containment measures and proper training and response practices. For those who don’t want to prepare their own plan, consider a consultant. Consulting companies offer services such as assessment, consultation, plan development, certification and future inspections.
- A farm may be able to seek a compliance deadline extension. The SPCC rule allows a farm that couldn’t meet the compliance deadline to submit a written request for an extension to the EPA regional administrator for the state where the farm is located. There are several reasons EPA may grant an extension: because a Professional Engineer (PE) isn’t available to create and certify a plan, if the farm is located in an area impacted by floods, or because facility modifications could not be completed before the deadline. For more on seeking an extension, visit this link.
- Insurance coverage may be at risk. Non-compliance with the law can negate insurance coverage; most insurers would likely deem the failure to have an SPCC plan after September 23, 2013 as “non-compliant.”
- Oil storage containment is good risk management. Even without the SPCC rule, assessing and managing oil storage and handling practices on the farm can pay off. Consider the recent case of an Ohio farm with a leaking oil tank that polluted a nearby waterway; the farm paid over $15,000 in fines and cleanup costs.
While “maybe” is a good answer to whether Congress will exempt many farms from the SPCC rule, it isn’t a good answer to whether farmers should ignore the SPCC regulation because of the confusion in Congress. For more on SPCC and agriculture, visit the EPA’s web page.