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Talking up the tank bill

Delegate John Kelly, R-Wood, speaks in support of a bill he sponsored designed to ease regulatory burdens on the oil and gas industry that would allow operators to inspect their own tanks nearest to public water intakes. The bill, House Bill 2598, has drawn the ire of drinking water advocates who fear another episode like the 2014 Elk River chemical spill that contaminated the drinking water supply of 300,000 people. Kelly said the tanks contain mostly brine salt water, but Department of Environmental Protection data say tanks more commonly contain crude oil.

The House of Delegates has passed a bill exempting oil and gas tanks closest to public water intakes from mandated evaluations and certifications by registered professional engineers or other approved individuals under the state Aboveground Storage Tank Act.

The state defines zones of critical concern — the areas nearest to water intakes — as consisting of a five-hour water-travel time in streams to an intake.

Approved by the House in a 77-22 vote mostly along party lines in the supermajority-Republican chamber Tuesday, House Bill 2598 would allow tanks in that category with 210 barrels (8,820 gallons) or less of brine water and other fluids produced in connection with hydrocarbon production, transmission and storage to be self-inspected and self-certified by their owner or operator at least once per year and reported to the state.

The bill is designed to benefit the oil and gas industry by lessening inspection costs for tank operators. But it has provoked concern about potential drinking water contamination from tank leaks of pollutants harmful to human health near public water intakes.

House and Energy Manufacturing Committee Vice Chairman John Kelly, R-Wood, lead sponsor of HB 2598, contradicted West Virginia Department of Environmental Protection data on the composition of substances stored in the tanks to be exempted that his own committee got from the agency last week.

Kelly claimed the main chemical in the tanks would be “brine salt water.” But that’s not true, according to DEP general counsel Jason Wandling, who cited data to Kelly’s committee last Tuesday indicating that a plurality of the tanks contains only crude oil.

Wandling told the committee that 48% of the tanks contain crude oil and that 35% contain a mixture of brine or oil and gas, while just under 13% contain only brine. The remaining 2.7% contain natural gas condensate, Wandling said.

“It’s not just salt water,” Delegate Mike Pushkin, D-Kanawha, said. “There’s a whole lot of stuff in there, things that you don’t want to drink.”

Also covered by the exemption would be tanks with 10,000 gallons or less of sodium chloride or calcium chloride water for roadway snow and ice pretreatment.

Owners or operators would have to perform and document secondary containment inspections at least once per month. The current requirement is that they be inspected once every two weeks.

The Legislature passed the Aboveground Storage Tank Act in 2014 in response to the Elk River chemical spill in January of that year that contaminated the drinking water supply for 300,000 people.

Nearly 11,000 gallons of a mixture of a coal-cleaning solvent and polyglycol ethers escaped from a Freedom Industries aboveground storage tank at the company’s chemical storage and distribution facility in Charleston. The mixture flowed downstream to the intake of a West Virginia American Water treatment facility 11/2 miles downriver.

The leak prompted West Virginia American Water to issue a do-not-use order for people in parts of nine counties. Hundreds of people experiencing skin, eye and respiratory tract irritation sought treatment at local hospital emergency rooms. Businesses and schools closed.

“These burdensome overregulations, the ripple effect coming out of this law several years ago, is tremendously adversely impacting our small producers across the state,” Assistant Majority Whip Trenton Barnhart, R-Pleasants, said.

But HB 2598’s opponents cited the 2014 spill as a reason to stop the bill.

“I’m really astonished, as somebody who was here in 2014 when 300,000 people lost their water, that we would be saying today that self-inspection of tanks inside the zone of critical concern is fine,” Delegate Barbara Evans Fleischauer, D-Monongalia, said. “This is not a compromise. This is trusting people to do everything right about our drinking water.”

Energy and Manufacturing Committee Chairman Bill Anderson, R-Wood, argued that the bill would help West Virginia avoid an increase in abandoned oil and gas wells left by operators he said are desperate for HB 2598’s proposed regulatory relief.

“I think it strikes a balance between the need to protect the water of the people of this state and to protect an industry in this state that is important ... in both creating jobs, providing energy for this state, and for the future of this state,” Anderson said.

The Legislature has gradually weakened its oversight of oil and gas tanks since 2014. The exemptions started a year after the Elk River spill, when the Legislature, in 2015, scaled back the Aboveground Storage Tank Act to only require inspection of tanks that contain either 50,000 gallons or more of hazardous material or are located within a zone of critical concern.

In 2017, the Legislature carved out an exemption for tanks outside zones of critical concern.

“We’ve exempted out thousands, tens of thousands of tanks,” Delegate Evan Hansen, D-Monongalia, said. “We have less-stringent regulations for the ones that are further away. But, for the ones that are immediately upstream of our drinking water intakes, let’s maintain what we have.”

The DEP categorizes tanks by threat level, with Level 1 tanks representing the highest threat. Tanks in that category include those located within a zone of critical concern, source-water protection area or public surface water-influenced groundwater supply source area.

Most oil and gas tanks already are exempt from regulation under the state’s aboveground storage tank rule, except for registration, labeling and notification to public water intakes.

Under existing law, regulated aboveground storage tanks and secondary containment structures (which include double-walled tanks, dikes, pits or drainage trench enclosures) must be evaluated by a registered professional engineer or person working under their direct supervision, an individual certified to perform tank inspections by the American Petroleum Institute or the Steel Tank Institute, or anyone certified under another DEP-approved program.

Wandling agreed with Anderson prior to the Energy and Manufacturing Committee’s approval of HB 2598 last week that it was a “reasonable compromise,” compared with last year’s version of the bill.

“We’re very excited that they’re supporting us in this effort to help keep these wells in service through more sensible regulations of tanks that hold brine water,” Gas and Oil Association of West Virginia Executive Director Charlie Burd said of the DEP.

Last year’s HB 2598 would have fully exempted the category of tanks closest to water intakes holding up to nearly 9,000 gallons of oil or gas from regulation under the Aboveground Storage Tank Act, which requires registration and certified inspection of such tanks, as well as the submission of spill-prevention response plans.

The DEP, the Department of Health and Human Resources and water utilities feared that last year’s HB 2598 would reduce source-water protection for systems with tanks located in zones of critical concern.

But critics of the current version of HB 2598, including the West Virginia Rivers Coalition, fear crude oil and other substances in many tanks that would be exempted contain pollutants that dissolve in water and could harm human health in the event of a leak.

A 2016 legislative rule established a registration fee of $40 per tank for all tanks in service prior to July 1, 2015, and $20 per tank for tanks placed into service since then. An operating fee of $201 per tank per year for tanks within zones of critical concern and an annual response fee to be reviewed annually also were established.

Opponents of the bill say the measure should have been referred to the House Human Health and Resources Committee as originally planned. The Energy and Manufacturing Committee opted to dispense with the planned second committee reference after the DEP approved the move.

Tanks within zones of critical concern weren’t included among those to be exempted from independent inspections until the House approved a Kelly-proposed amendment making that allowance to the bill Monday.

The bill now goes before the Senate, where last year’s version of HB 2598 died after it was referred to the Senate Judiciary Committee.

Mike Tony covers energy and the environment. He can be reached at 304-348-1236 or mtony@hdmediallc

.com. Follow @Mike__Tony on Twitter.

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