Earl Crochet: Navigating New Regulations

Earl Crochet, owner of Crochet Midstream Consulting, explores the fast pace of regulatory changes in the aboveground storage tank industry

As someone who has been dealing with aboveground storage tanks (ASTs) for more than 36 years, I have seen drastic regulatory changes over that time. And the pace of this change continues to increase. In 1988, when I started on Plantation Pipe Line, a pipeline regulated by the Federal Department of Transportation (DOT), now known as the Pipeline and Hazardous Materials Safety Administration (PHMSA), the only regulation required was to do a yearly inspection on a tank (and no one even told us what inspection was required). In addition, there were Environmental Protections Agency (EPA) standards for emissions, called Kb, and a few state regulations on emissions but even those were relatively simple. My, how things have changed. The first federal regulations on tanks happened in 1999 when DOT and PHMSA mandated breakout tanks (tanks that either receive and deliver products from a regulated pipeline or receives surges from a regulated pipeline) to follow the American Petroleum Institute (API) Standard 653 Tank Inspection, Repair, Alteration, and Reconstruction (the 1999 version) for inspection and repairs. Since 2002, EPA has required owners and operators storing any kind of oil (crude oil, refined products, vegetable oils, etc.) to follow the Spill Prevention, Control and Countermeasures (SPCC rules) and to follow API 653, the Steel Tank Institute (STI) SP001, or have a professional engineer in the state to write their own plan, among other items. Fast forward to today, there are even more state and federal regulations on emissions from ASTs and many states have passed their own sets of regulations on inspections, repairs, and overfill prevention (Pennsylvania, Florida, North Carolina, Wisconsin and Texas to name a few). The rest of this article will address some of the more recent and impactful regulations on both a state and federal level. Plus, there are now even local- specific rules, such as the South Coast Air District of California that just began requiring optical gas imaging (OGI) to help reduce the release of volatile organic compounds (VOC). API 2350: Overfill Prevention  DOT and PHMSA recently updated several of the API standards that they incorporate by reference into their regulations. One of the most impactful updates for tanks is requiring the new API 2350 Overfill Prevention for Storage Tanks in Petroleum Facilities 5th edition, for breakout tanks. API 2350, 5th edition requires owners and operators to perform a risk assessment on each tank. Until this risk assessment is performed, the owner and operator must comply with the category system (0, 1, 2, and 3), which is based on the technology on the tank (no gauge, local gauge, remote reading gauge, independent alarm). These categories require a minimum of 30, 60, 90 or 120 minutes of capacity at the top of the tank in order to try and prevent an overfill or other damage to the tank.

EPA Emissions Reductions

In May 2024, EPA published the final Gasoline Distribution MACT and GACT, National Emission Standards for Hazardous Air Pollutants (NESHAP) - 40 CFR 63 Subparts R & BBBBBB. The purpose of this new regulation is to reduce emission from facilities that distribute gasoline, including the tanks that store the gasoline. Some of the major changes include:

• Additional fitting requirements for storage vessels (tanks) with external floating roofs,
• Adding a requirement for storage vessels with internal floating roofs to maintain the concentrations of vapors inside a storage vessel above the floating roof to less than 25 percent of the lower explosive limit (LEL)
• Require semiannual monitoring using either Optical Gas Imaging (OGI) or EPA Method 21 and repair leaks identified from these monitoring events or leaks identified by Audio, Visual, and Olfactory (AVO) methods during normal duties.

Update To KB

EPA also announced in 2023 that it was intending to update the Kb tank emissions regulations to Kc, officially ‘Standards of Performance for Volatile Organic Liquid Storage Vessels (Including Petroleum Liquid Storage Vessels) for Which Construction, Reconstruction, or Modification Commenced After (TBD)’. For reference, Kb has been the industry standard since 1984. Since this is a proposed regulation only, none of the following items are final but as of now, the following are some of the major changes proposed:

• Tanks impacted would be ones constructed, reconstructed or modified after October 4, 2023
• Proposed rule asserts that service changes to higher-volatility liquids (such as diesel to gasoline or potentially even from a lower Reid Vapor Pressure (RVP) to a higher RVP gasoline) would count as a modification, this is major change from 40 years of past EPA guidance
• Any tank greater than 20,000 gallons with no true vapor pressure (TVP) minimum
• Significant changes to seal requirements (actually outlawing several existing seal types in certain situations)
• New requirements for guide poles
• If the atmosphere above a tank roof exceeds 25% LEL it would be considered an inspection failure and ‘must be remedied as such’.

Examples given include repair within 45 days, clean the tank, or ask for an extension. In addition, results of LEL readings greater than 25% could lead to needing additional controls (e.g converting a bolted internal floating roof (IFR) to a welded IFR), replacing rim seal systems, or replacing the IFR. There are many more proposed changes to the Kb regulations, but this list shows some of the more concerning items.

Clean Water Act

Another new regulation anticipated for 2024 is Final Rulemaking on Clean Water Act Hazardous Substance Facility Response Plans from the EPA. EPA just recently finalised regulations requiring covered facilities to plan for worst case discharges of Clean Water Act hazardous substances to navigable water. The planning requirements apply to facilities that could reasonably be expected to cause substantial harm to the environment, based on their location. While obviously there are many details to this new law, a simple way to think about this regulation is that it will be essentially the SPCC program for many chemicals for larger facilities. It is based on the Reportable Quantity (RQ) for Hazardous Substances and if the facility stores 1,000 times the RQ and is within 0.5 miles of navigable water or a conveyance, then the facility is in the program. At an industry conference earlier this year, a speaker from the EPA stated that it was estimated it would impact over 12,000 facilities. If you assume a minimum of 10 tanks per facility, then that means over 12,000 more tanks will soon be regulated.

State Laws

Turning to state regulations, Texas passed a law last year called SB 900 (officially titled Texas Commission on Environmental Quality Chapter 338 – Aboveground Storage Vessel Safety Program) that will impact around 36,000 tanks unregulated currently, per the TCEQ. The reason the law references aboveground storage vessels instead of ASTs is because, in the state of Texas, the term aboveground storage tank had a different definition. This new rule became law on 1 September 2023 with full compliance by 1 September 2027. Basically, the rule applies to all tanks 21,000 gallons (500 barrels) that are not currently regulated and contain contents that would impact the waters of the state of Texas if the contents was to get out of the tank. Major provisions of the new law reference parts of the following: EPA 40 CFR PART 68 (Risk Management Plan); EPA 40 CFR PART 112 (SPPC plan); API 653, parts of Sections 4 and 6 and all of Sections 8 and 9; API 2350, Sections 4 and 5; NFPA 30, Chapter 22 and API 2001Sections 5-11. Additional recent state regulations include seismic regulations in Oregon and Washington. Washington is requiring ‘seismic protection measures for all oil storage tanks and transfer pipelines regulated under WAC 173 - 180 built prior to July 2023.' Specific items include:

• ‘Flexible mechanical device(s) between storage tank and piping or sufficient piping flexibility to protect the tank and pipe connection and prevent the release of product
• Foundation driven pilings; anchored storage tanks.
• Another seismic protection measure proposed by the facility and approved by ecology, as long as such protection measure equals or exceeds those required in this section. This may include demonstrating the storage tank meets API Standard 650 (2020) seismic design requirements, including Annex E and section E.7.3 Piping Flexibility,'

In Oregon, ‘effect on September 1, 2023 and their mandated standards, performance objectives and performance criteria for seismic design, evaluation and retrofit including but not limited to the following: …d) For tanks ASCE 7 and reference standard for seismic criteria such as API 650 and API 653.’ Things certainly have changed in tank regulations over the years, and I don’t expect the new regulations on tanks to slow down or stop anytime soon. The AST world will continue to become more challenging for owners and operators to comply. Rest assured, I plan to be around for many more years to see what happens and to try and make sense of changes to the regulation.