April 23, 2007

Draft rules address gaps in management of petroleum storage tanks under federal control

By: Mark Sabourin

Ottawa will plug the federal regulatory vacuum around storage tanks for petroleum products with a new regulation that is now out for comment in draft form. The draft Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations were published in the April 7, 2007 edition of the Canada Gazette, Part I, for a 60-day comment period.

The regulations have been a long time coming: consultations began in September 2002 and continued through March 2005.

The existing regulation (Registration of Storage Tank Systems for Petroleum Products and Allied Petroleum Products on Federal Lands and Aboriginal Lands Regulation) has been in place since 1997, but it requires only that tanks be registered. Owners are required to self-assess their storage tank systems against technical guidelines, but compliance with the guidelines is not mandatory. However, the current regulation has contributed to the building of an inventory of tanks that will be subject to the new regulations.

According to that inventory, some 8,500 tanks will be affected by the regulation, more than 3,000 of which pre-date 1987.

Petroleum storage tanks under federal jurisdiction are those that are owned or operated by the federal government, its agencies and Crown Corporations, port authorities, railways, airports and those situated on federal and Aboriginal lands. They are a problem. According to government figures, releases of petroleum products from storage tank systems are responsible for 66% of the soil contamination on contaminated sites on federal and Aboriginal lands. The cost of implementing the new regulation will be $187 million (2004 dollars), yielding a benefit of $556 million over 12 years.

Despite the anticipated cost of compliance, the regulatory proposal does not include federal funding for upgrades of existing systems. The system owner will be responsible for the compliance cost.

The new regulation will reduce the risk of environmental contamination in a number of ways.

First, it defines classes of storage tank systems deemed "high risk" for contaminating soil and groundwater, and requires their removal within four years of the regulation taking effect.

High-risk is defined as follows:

* Storage tank systems that are designed to be installed aboveground but that are installed below grade or in secondary containment surrounded by fill;

* Storage tank systems that are designed to be installed underground but that are installed above grade or in unfilled secondary containment;

* Storage tank systems that include partially buried tanks;

* Single-walled underground storage tank systems that do not have pre-existing corrosion protection and leak detection; and

* Single-walled underground piping that does not have corrosion protection and leak detection.

Second, the regulation would require owners or operators of existing storage tank systems to perform prescribed leak-detection testing at specified intervals. The requirement will only apply to single-walled underground equipment and single-walled aboveground equipment that does not have secondary containment.

Third, the "transfer area" (defined as the area around the connection point between a delivery vehicle and storage tank system with a capacity of 2,500 litres or more) would have to be designed to contain spills that might occur during the product transfer process.

Fourth, systems would be assigned an identification number issued by the Minister of Environment. That number would be displayed on or near the storage tank system. Suppliers of petroleum products would be prohibited from delivering product to a tank system if the system's identification number was not visible, and would be required to record the identification number on the invoice and to notify the operator of any spills or leaks that occurred during the product transfer process.

Fifth, the design and installation of new storage tank systems, or any components of new systems, would have to conform with the 2003 Environmental Code of Practice for Aboveground and Underground Storage Tank Systems Containing Petroleum and Allied Petroleum Products, issued by the Canadian Council of Ministers of the Environment.

Sixth, the owner or operator would be required to prepare an emergency plan that takes into account measure necessary to protect the environment and human health. In the event of a spill, the regulation will require a detailed report to the Minister of Environment, detailing circumstances of the spill and mitigation measures taken.

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