Bill exempts oil, natural gas industry from WV chemical tank safety law

More than two-thirds of the chemical storage tanks covered by a safety law passed after the Freedom Industries spill into the Elk River would be exempt from that law, under a bill now moving through the West Virginia House of Delegates.

The legislation would exclude 29,000 tanks owned and operated by the oil and gas industry from West Virginia’s Aboveground Storage Tank Act, according to a preliminary analysis by the state Department of Environmental Protection. That’s 69 percent of the 42,000 tanks that must be registered with the DEP under the law, passed by the Legislature in the wake of the January 2014 spill that contaminated drinking water for hundreds of thousands of people across the Kanawha Valley and surrounding communities.

House Bill 2811 was introduced just two days ago and was approved Thursday afternoon by the House Committee on Energy, with little debate and by a unanimous voice vote.

It now goes to the House Judiciary Committee.

Judiciary Chairman John Shott, R-Mercer, is a co-sponsor of the bill, as is House Democratic leader Tim Miley, D-Harrison.

Supporters say the bill aims to exempt from the law only certain types of smaller tanks that are not located near drinking water intakes.

Gov. Jim Justice has expressed support for giving the natural gas industry relief from the chemical tank law.

The West Virginia Environmental Council called the legislation “a new attack” on the chemical tank safety bill that would “undercut the protections” of that law, which already was significantly scaled back and has been the subject of repeated efforts by oil and gas operators, and by some other industries, looking for what are practically wholesale exemptions.

Under the bill, a new exemption would apply to tanks with a capacity of 210 barrels, or about 8,820 gallons, that contain “brine or water or other fluids produced in connection with hydrocarbon production activities,” if those tanks are not located in a “zone of critical concern,” an area that is estimated to be about five hours upstream from a drinking water intake.

Larger natural gas industry tanks and those located within zones of critical concern near drinking water intakes still would be covered by the law.

“It certainly does not reduce the level of regulation on tanks inside the zone of critical concern,” said Charlie Burd, executive director of the Independent Oil and Gas Association.

The bill’s lead sponsor, Judiciary Vice Chairman Roger Hanshaw, said a goal of the legislation is to remove from the DEP the burden of regulating gas industry tanks that are not located where they present a threat to drinking water supplies.

“We have an agency that is underfunded, that can’t do all the things it needs to do. This would let them spend their time on things that pose problems instead of ... things that aren’t a problem,” said Hanshaw, a Clay County Republican who holds a doctorate in chemistry and, as an attorney with the Charleston firm Bowles Rice, sometimes represents the West Virginia Independent Oil and Gas Association and the West Virginia Oil and Natural Gas Association.

The vast majority of the tanks that would be exempted under the bill, though, do not actually fall within a section of the current storage tank law that contains any specific safety requirements or mandated inspections, according to the DEP.

After the Freedom spill, lawmakers passed a landmark and very strong chemical storage tank law. The law was much broader in scope than then-Gov. Earl Ray Tomblin had proposed and was approved unanimously, despite numerous efforts by various industry lobbyists and some lawmakers to weaken its provisions. A year later, lawmakers scaled back the number and types of tanks covered by the law, but refused a natural gas industry effort to get a wholesale exemption.

Existing law spells out several types of chemical storage tanks that are covered in different ways.

A broader collection of containers is defined as “aboveground storage tanks,” if they meet certain criteria, including having a capacity of more than 1,320 gallons. All of those tank owners are required to file a registration form with the DEP and pay a registration fee of $40, for tanks that filed before July 1, 2015, and $20 for tanks that filed after that date. Operators of those tanks also must place signs or markers that list their registration number and an emergency contact number.

The law outlines two other categories of tanks. “Regulated Level 1 Tanks” are located within a zone of critical concern that contain certain particularly hazardous materials or have a capacity of 50,000 gallons or more. “Regulated Level 2 Tanks” are located within an area called the “zone of peripheral concern,” which is 10 hours upstream from any drinking water intake.

Both categories of “regulated” tanks are subject to DEP safety standards and requirements for certain types of inspections, with Level 1 tanks being subject to more scrutiny than Level 2 tanks because of their closer proximity to drinking water intakes.

Joe Sizemore, an assistant chief inspector for the DEP’s Division of Water and Waste Management, noted for the committee that HB 2811 does not apply to any tanks that are located within a drinking water zone of critical concern.

As of early January, the DEP’s inventory of registered aboveground storage tanks contained about 42,000 tanks in all categories combined, Sizemore said.

The legislation being considered would exempt 29,000 of those tanks from the definition of “aboveground storage tanks” covered by any part of the law. Sizemore said. Of those 29,000 tanks, about 2,300 tanks that would be exempted from the bill are within the zone of peripheral concern, making them Level 2 tanks, according to Sizemore’s testimony to lawmakers Thursday afternoon.

That means that about 26,700 of the tanks that would be exempted by the bill are not “regulated” tanks and face only a requirement that they be registered with the state and carry a marker listing their registration number and an emergency contact, according to Sizemore.

Dave McMahon, a lobbyist for the West Virginia Surface Owners Rights Organization, said the registration of all aboveground storage tanks is important for residents in the state’s natural gas producing regions.

“Our concern is, if you live out in the country, you ought to be able to look at a map and see what tanks are out there and go look at them,” McMahon said. “This will stop that from happening.”

Before passing the bill on to the Judiciary Committee, members of the Energy Committee also approved an amendment that would exempt tanks with a capacity of 10,000 gallons or less that contain sodium chloride or calcium chloride “for roadway snow and ice pretreatment” if those tanks are not located in zones of critical concern.

Rita Pauley, a lawyer for the West Virginia Division of Highways, said her agency requested the amendment. Pauley said the DOH has 146 such tanks but that six would not be exempt because they are located within zones of critical concern. Pauley said the DOH does get some of the brine material it uses on roadways from the oil and gas industry.

Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.

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