The midstream industry will see new regulations regarding the storage of liquids in the US and in Texas. Four regulations will shape the industry in the coming years: 1) Full adoption of API Standard 2350 5th Ed, 2) EPA’s soon to be published new regulations regarding VOCs (among other items) within midstream gasoline terminals. 3) EPA’s anticipated expansion of SPCC regulations surrounding tank overfills and tank leaks and, 4) the new bill – TX SB 900 which just passed in the state of Texas.
- API 2350 5th Edition was updated and published in September 2020 and included in PHMSA’s notice of proposed rulemaking (NPRM) on January 15, 2021. Edition 5 emphasizes prevention of overfills utilizing more and enhanced technology with better alarms for increased monitoring and better response times. This formally addresses DOT tanks -aboveground storage tanks (ASTs) that either received product and send product directly to and from a regulated pipeline or receive pressure relief from a regulated pipeline transporting refined products, crude oil, or another regulated liquid. A risk assessment on each individual AST is required. If the Owner/Operator chooses not to perform this risk assessment, then the more conservative Category system must be used and results in less capacity, reduced flow, a human observer and/or additional technology to remedy the situation.
- The EPA has been charged by Congress (and by being sued in Federal court) with better reduction of emissions and more enforcement of existing and proposed regulations in the midstream and particular attention will focus on emissions from distribution facilities that handle gasoline and ethanol. Terminals that are regulated by NSPS XX, NESHAP R, and NESHAP BBBBBB will need to address and employ more technology to address emissions around terminals and install better monitoring devices for VOCs. Storage tank controls and the consideration of regulating transmix as a fuel and subject to EPA regulations are 2 of about 13 items that are being considered by EPA with an initial draft due to be published by Dec 1, 2021. New regulations would be enacted no later than Dec. 1, 2022, with implementation on a regulation-by-regulation scenario.
- The EPA is also considering expanding existing SPCC regulations and potentially adding new regulations primarily around leaks and overflows. These new regulations are not proposed yet, but it is assumed that monitoring overflows, as defined by API2350, will be enforced shortly where tank leaks, potential or actual ones, will need to be addressed and considered.
- TX Senate Bill 900 (TX SB900) recently passed and is now affective as of Sept. 1, 2021, which is a direct result of the ITC fire in Houston in March 2019. The bipartisan bill is directed towards regulating existing and new tanks that are not currently regulated by the State of Texas or the Federal government, such as EPA or PHMSA from an overfill or leak scenario concentrating on better monitoring of above ground chemical tanks which is an area under the Texas Commission on Environmental Quality (TCEQ). While there are rules and regulations for underground tanks, TCEQ will enact and align these new above ground standards based on Standard API 2350 and other API standards. The new performance standards will probably require fire suppression technology, remote shut off valves and overflow protection. These rules will align standards for tanks that are not currently regulated more closely with API and protect ground water in the event of an accident or a natural disaster. While this bill is only a TX law, adoption in other states could follow.
Insurance companies will embrace new regulations as companies lower their risk exposure and ultimately benefit with reduced premiums. New technology will be required by these agencies and may support new ESG reporting mandates that are common requirements in most companies now. The next 18 months could be a very challenging time for the midstream, but it could also be a healthy self-perspective as O&G companies improve all the aspects of their operations.
Written by Earl Crochet and Jim Paladino from Perceptive Sensors Technology Inc. info@perceptivesensors.com
