Proposed Rule: Avoiding a Worst-Case Scenario for Worst-Case Discharges

EPA is poised to issue a final rule (the Rule) requiring stringent planning requirements for facilities with the potential for a “worst-case discharge” that could reasonably be expected to cause substantial harm to the environment.[1] A worst-case discharge is defined as the largest foreseeable discharge from a facility in adverse weather conditions. Facilities subject to this Rule will be required to model a worst-case discharge scenario; complete and submit a Substantial Harm Certification Form (SHCF); and create and submit a Facility Response Plan (FRP). This article offers a high-level overview of the Rule as it was proposed to help facilities better understand whether they will be subject to the Rule and how they may comply with the Rule’s general requirements.

When does the Rule take effect?

EPA and OMB estimate the final Rule will take effect on September 30, 2024. Pursuant to a Consent Decree entered between EPA, NRDC, Clean Water Action, and the Environmental Justice Health Alliance for Chemical Policy Reform in March 2020, EPA was required to publish a proposed rule regulating worst-case discharge planning by March 2022. The Consent Decree requires EPA to sign the final Rule by September 2024. As such, facilities must prepare to comply with the Rule as soon as September 2024.

Who is subject to the Rule?

The proposed Rule applies to “the owner or operator of any non-transportation-related onshore facility that, because of its location, could reasonably be expected to cause substantial harm to the environment by discharging Clean Water Act (CWA) hazardous substances into or on the navigable waters by meeting [applicability criteria in § 118.3].”[2] The applicability criteria are: (1) a threshold quantity of a CWA hazardous substance; (2) proximity to navigable waters; and (3) substantial harm criteria, which includes (a) ability to cause injury to fish and wildlife; (b) ability to adversely impact a public water system; (c) ability to cause injury to public receptors; and (d) reportable discharge history. Note that this Rule covers a facility only if all three applicability criteria are met, but the substantial harm criterion is met if just one of the listed facts applies.          

A facility meets the threshold quantity when the maximum capacity onsite for any CWA hazardous substance,[3] at any one time, meets or exceeds 10,000 times the Reportable Quantity[4] in pounds. The proximity criterion simply requires a facility to be located within one-half mile of navigable waters or a conveyance to navigable waters.          

A facility meets the substantial harm criteria in a myriad of ways. A facility meets the criteria for its ability to cause injury to fish, wildlife, and sensitive environments if it is located at a distance to an endpoint[5] such that a worst-case discharge could injure fish, wildlife, or sensitive environments. A facility meets the criteria for its ability to adversely impact a public water system if the facility is located such that a discharge from the facility could adversely impact a public water system. An adverse impact includes a concentration of CWA hazardous substance reaching a public water system which: (1) violates a National Primary Drinking Water Standard or State Drinking Water Regulation; (2) compromises the public water system’s ability to produce water in compliance with a National Primary Drinking Water Standard or State Drinking Water Regulation; (3) results in adverse health impacts to people exposed to the maximum concentration that could enter the system; (4) contaminates public water system infrastructure; or (5) impairs the taste, odor or other aesthetic characteristic of the water entering a drinking water system. The substantial harm criterion can also be met where the facility has an ability to cause injury to public receptors.[6] This criterion is met if the facility is located such that a discharge to navigable water could cause injury to a public receptor. Finally, substantial harm criteria can be met where the facility has had a reportable CWA discharge under 40 C.F.R. § 117.21 within the last five years.          

Outside of the applicability criteria, a facility can be subject to this Rule if the EPA regional administrator determines the facility must submit a FRP and notifies the facility in writing. For the regional administrator to require a FRP, it must make a “substantial harm determination” finding the facility “could, because of its location, reasonably be expected to cause substantial harm to the environment by a discharge, or substantial threat of a discharge, of CWA hazardous substances to navigable waters.” In making a determination on “substantial harm,” the regional administrator may consider: (1) the type of transfer operations; (2) CWA hazardous substance quantity and category stored onsite; (3) proximity to fish, wildlife, and sensitive environments or other areas determined by the regional administrator to possess ecological value; (4) ability to adversely impact public water systems; (5) location in a source water protection area; (6) ability to cause substantial harm to public receptors due to a worst-case discharge to navigable waters; (7) lack of passive mitigation measures or systems; (8) potential for a worst-case discharge to adversely impact environmental justice communities; (9) potential vulnerability to adverse weather conditions resulting from climate change; (10) reportable discharge history; and (11) other site specific characteristics and environmental factors the regional administrator determines to be relevant.

How does a facility comply with the Rule?           

The Rule provides three major requirements for covered facilities: (1) the facility must model a worst-case discharge scenario; (2) the facility must complete and submit to the EPA regional administrator a SHCF; and (3) the facility must prepare and submit to EPA a FRP.

Worst-Case Discharge Scenario Model         

Section 118.10 of the Rule requires facilities to “model a worst-case discharge; calculate endpoint distances to fish, wildlife, and sensitive environments and public receptors; and compare endpoint concentrations against calculated concentrations.” The Rule does not contain any express submission or documentation requirements for the model. However, because the model will largely inform a facility’s SHCF and FRP, we recommend submitting the model as part of the documentation required to be submitted with SHCFs and FRPs and keeping detailed records of the model consistent with recordkeeping requirements for SHCFs and FRPs.        

To satisfy the modeling requirement, the Rule requires a facility to calculate a “worst-case discharge quantity” by evaluating the discharge potential of the container with the largest capacity of a CWA hazardous substance with a maximum capacity onsite that exceeds the threshold quantity provided in the applicability criteria. Section 118.10(a) includes methods for calculating a discharge quantity based on the types of containers used in a facility; where multiple container types apply, the facility will use the type with the greatest potential discharge capacity.           

To calculate distances to endpoints for fish, wildlife, sensitive environments, public water systems, and public receptors, the Rule offers facilities discretion in selecting a methodology. Facilities may use any methodology, model or other technique, including proprietary ones, to determine distances, so long as the chosen method accounts for facility-specific conditions and considerations stated in § 118.10(b). The listed considerations generally concern topography and location.

Substantial Harm Certification Form

Any facility that meets applicability criteria in § 118.3(a) and (b) (threshold quantity and proximity to navigable waters) must complete and submit a SHCF. The SHCF can be found in Appendix A of the Rule. The SHCF repeats the applicability criteria in question form, requiring the facility to answer “yes” or “no” as to whether it meets each criterion.

Existing facilities must submit the SHCF within twelve months of the effective date of the Rule. For new facilities, the SHCF must be submitted within one month of meeting the § 118.3(a) and (b) criteria, but not sooner than twelve months after the effective date of the Rule. Facilities beginning operation within twelve months of the effective date of the Rule should prepare to submit the SHCF within the thirteenth month from the effective date of the Rule. Any facility beginning operations after one year from the effective date of the Rule must submit the SHCF within one month of beginning operations.

The SHCF must include attachments documenting “calculations, and any other information necessary to demonstrate the reliability and analytical soundness of the substantial harm determination as well as a review of potential receptors that could be impacted as a result of a CWA hazardous substance discharge.”

The Rule also provides retention and update requirements. Facilities must retain their completed SHCF and supporting documentation for the entire time the CWA hazardous substance maximum onsite is at or exceeds the threshold quantity and for an additional ten years. Facilities must submit to the regional administrator updates to the SHCF every five years unless there is “a change at or outside the facility that impacts the facility’s potential to cause substantial harm to the environment in accordance with the criteria in § 118.3.” If such a change occurs, the facility must submit to the regional administrator updates to the SHCF within sixty days of the change.

Finally, the Rule provides a mechanism for facilities to avoid revealing confidential business information. Facilities withholding business information must be prepared to substantiate that the information is in fact confidential. For the complete requirements related to confidential business information, refer to § 118.4(d).

Facility Response Plan

The Rule requires covered facilities to prepare and submit an FRP to EPA. The timeline for submitting such a FRP varies depending on when a facility becomes covered by the Rule. For facilities in operation on the effective date of the Rule that satisfy the applicability criteria or are notified by the regional administrator that an FRP is required, the FRP must be submitted within twelve months of meeting the criteria or notification. The Rule also provides timelines for newly regulated facilities, newly constructed facilities, facilities regulated as a result of a planned event or change, and facilities regulated as a result of an unplanned event or change. The timelines for submission for these facility types are generally shorter than those for initially regulated facilities and can be found in § 118.4(a)(2-5).

When a facility submits an FRP, the regional administrator will review the FRP to determine whether the facility could reasonably be expected to cause “significant and substantial harm” to the environment in the event of a discharge. This is a distinct, but similar, determination to the “substantial harm” determination the regional administrator may use to require an FRP from a facility otherwise not meeting the applicability criteria. The regional administrator may use the same factors used to evaluate “substantial harm,” as well as considerations listed in § 118.5(d), including (1) frequency of past reportable discharges; (2) proximity to navigable waters; (3) age of containers and equipment; (4) potential for disastrous weather events; and (5) relevant facility-specific and region-specific considerations.

If the regional administrator determines the facility can reasonably be expected to cause significant and substantial harm, the regional administrator must (1) review the FRP; (2) require amendments where necessary to meet the Rule’s requirements; (3) approve an FRP if or once it meets the requirements; and (4) review the FRP on a set schedule. Note, the regional administrator only approves FRPs where the facility presents significant and substantial harm; if the facility only presents substantial harm, the FRP need only be submitted for a facility to comply with the Rule. Of course, the submission of an FRP triggers the regional administrator’s review for significant and substantial harm so a facility should not assume its duties are complete simply because it submitted an FRP.

A written FRP satisfies the Rule’s substantive requirements if it “complies with other Federal contingency plan regulations or is consistent with the approach in the National Response Team’s Integrated Contingency Plan Guidance . . . and . . . includes the elements provided in [§§ 118.11(a)(1)-(4) and 118.11(b)(1)-(18)]. The most noteworthy elements referenced require the FRP to (1) be consistent with the National Oil and Hazardous Substance Pollution Contingency Plan (40 C.F.R. part 300) and applicable Area Contingency Plans prepared pursuant to § 311(j)(4) of the CWA (33 U.S.C. § 1321(j)(4)); (2) identify the qualified individual having full authority to implement the FRP and describe their duties; (3) identify and ensure by contract or other means the availability of private personnel and equipment necessary for a response to a worst-case discharge; (4) describe training, testing and drills of persons who may carry out the FRP; (5) and include emergency response information consistent with § 118.11(b)(1)-(18). Owners and operators must be sure to consult the full regulation in § 118.11 to ensure compliance with all FRP requirements.

The Rule also requires a facility to submit amendments to its FRP upon any “facility change that materially may affect the response to or potential for a worst-case discharge.” Such changes include a change in the facility’s configuration that materially alters information in the FRP; a change in the CWA hazardous substance maximum capacity onsite; a material change in the capabilities of spill response organization(s) that provide equipment and personnel to respond to discharges; or a material change in the facility’s discharge mitigation and response equipment or procedures.

The Rule requires a facility to coordinate its FRP with the local emergency response plan developed by the Local (or Tribal) Emergency Planning Committee. Coordination must be done at least annually and includes the provision of relevant documents, consulting on response drills and exercises and documentation of the coordination efforts. Full coordination requirements are found in § 118.12.

Finally, the facility must develop and implement a facility response training program and a drills and exercise program consistent with the requirements in § 118.13. These programs must be described in the FRP. Any program following the National Preparedness for Response Exercise Program complies with the Rule. Additionally, the facility must keep and include in its FRP, logs of training meetings and sessions. Such logs must be kept for five years from each training session.

Appeals

The Rule provides that owners and operators may request reconsideration of a regional administrator’s determination that the facility could reasonably be expected to cause substantial harm or significant and substantial harm and/or a regional administrator’s determination that amendments to the facility’s FRP are necessary. The owner or operator must submit its request to the regional administrator within sixty days of receipt of the original decision. An owner or operator may also request reconsideration of the facility’s classification if the owner believes an unplanned event or change in the facility’s characteristics (i.e., substantial harm or significant and substantial harm) warrants a change in classification.

If the regional administrator denies a request for reconsideration, an owner or operator may appeal the regional administrator’s original determination to the EPA administrator. Such appeal must be made within sixty days of receipt of the decision from the regional administrator that the request for reconsideration was denied.

Takeaways       

EPA’s new Rule requires certain facilities handling CWA hazardous substances to model a worst-case discharge scenario; complete and submit a SHCF; and create and submit a FRP. Owners and operators should consult the regulatory text to determine whether their facility meets the criteria to be covered by this Rule. If covered, the facility must identify its facility-type to determine the applicable timelines for submissions of a SHCF and FRP. Facilities must consult the regulatory text and, if necessary, employ experienced legal professionals to navigate the complex determinations that go into completing a SHCF and developing an FRP.

[1] Clean Water Act Hazardous Substance Worst-Case Discharge Planning Regulations, 87 Fed. Reg. 17890 (proposed March 28, 2022) (to be codified at 40 C.F.R pt. 118).
[2] In this article, the term “facility” refers exclusively to non-transportation-related onshore facilities.
[3] CWA hazardous substances are listed at 40 C.F.R. § 116.4.
[4] Reportable Quantities are listed at 40 C.F.R. § 117.3.
[5] Acceptable methods for calculating distances to endpoints are provided in § 118.10(b).
[6] “Public Receptor” is defined in § 118.2 as “parks, recreational areas, docks, or other public spaces inhabited, occupied, or used by the public at any time where members of the public could be injured as a result of a worst-case discharge to navigable waters.”