On February 16, 2016, the U.S. District Court for the Southern District of New York approved a Consent Decree between environmental plaintiff groups and the U.S. Environmental Protection Agency that likely will result in comprehensive new requirements affecting companies that handle, store, transport or process hazardous substances. Envtl. Justice Health All. for Chem. Reform. v. U.S. EPA, No. 15-cv-05705, ECF No. 46 (S.D.N.Y. Feb. 16, 2016). The Decree requires EPA to develop regulations under Section 311(j)(1) of the Clean Water Act (CWA) “establishing procedures, methods, and equipment and other requirements for equipment to prevent discharges of . . . hazardous substances . . . from onshore facilities . . ., and to contain such discharges . . . .” 33 U.S.C. § 1321(j)(1)(C). This provision has long been a part of the CWA regulatory regime. EPA implemented the provision with respect to oil, resulting in the Spill Prevention, Control and Countermeasures (SPCC) and Facility Response Plan (FRP) rules, but it never did so for hazardous substances.

The Decree requires that EPA must issue a notice of proposed rulemaking within 18 months and take a final action no later than 14 months thereafter. If EPA decides (within the next 60 days) that it must undertake an information collection exercise pursuant to 44 U.S.C. § 3506(c)(2)(A), both deadlines will be extended by 10 months.

Those familiar with EPA’s SPCC and FRP requirements under 40 C.F.R. Part 112 will appreciate the potential complexity of this new regulatory undertaking and the compliance challenges it will create for facility owners and operators. While the current regulations apply only to oil, the new provisions would apply to hundreds of different substances whose physical and chemical properties are as varied as the facilities and equipment industry has employed to manage them.  See 40 C.F.R. § 116.4. And the regulated community is likely to expand as EPA’s new requirements affect facilities – especially small businesses – that may store chemicals but do not store oil.

SPCC Plans cover many aspects of facility design, construction and operation, and we would expect EPA to consider a similar approach to developing the new regulations for hazardous substances. These aspects include, for example: discharge prevention measures (including material handling procedures), drainage controls such as secondary containment, countermeasures for discovering and responding to releases, disposal methods for material that is cleaned up, a systematic plan for inspections, tests and record keeping, personnel training programs, and security measures. See 40 C.F.R. § 112.7.

Those likely to be subject to this new initiative should begin now to prepare for their participation in the regulatory process. EPA should be strongly encouraged to avoid duplication or supplementation of requirements already imposed under other regulatory programs, and to understand the efficacy of existing best industry practices. EPA should be educated as to the different types of measures that should be recognized because of differences among chemicals and groups of chemicals. The added cost of the new regulation, and its impacts on small businesses, should be documented and communicated effectively to the Agency as options are identified for consideration. And if EPA undertakes an information collection activity, it will be imperative for industry trade associations to become involved sufficiently to reduce the burden of information collection on their members by tailoring requests and advocating for efficiencies in the process.