Back in April of this year, a citizen group filed a petition that argued Ohio illegally tried to exempt oil & gas companies from complying with federal emergency planning and citizen reporting requirements under the "Emergency Planning and Community Right-to-Know Act ("EPCRA"). EPCRA requires companies that store certain hazardous chemical above certain thresholds to inform local emergency responders, known as "local emergency planning committees" (LEPCs), regarding the chemical storage. The Act also makes certain information available to the public.
In 2001, the Ohio General Assembly adopted Ohio Revised Code (R.C.) 3750.081, Compliance by Oil & Gas Facilities: Use of Electronic Database which provided an alternative to EPCRA's reporting requirements. The State believed the state and federal reporting requirements were "overlapping" and, therefore, felt R.C. 3750.081 was necessary to eliminate potentially duplicative reporting requirements. The law stated that the information required under EPCRA could be provided in the Ohio Department of Natural Resources (ODNRs) Division of Oil & Gas annual reporting requirements.
In response to the Citizen's petition, U.S. EPA determined that R.C. 3750.081 does not supersede the reporting requirements of EPCRA. Therefore, U.S. EPA determined oil & gas well owners and operators must separately comply with EPCRA.
On September 11th, the Ohio State Emergency Response Commission (SERC) notified oil and gas well owners and operators of U.S. EPA's determination. It clarified that owners and operators must comply with the reporting requirements under EPCRA despite R.C. 3750.081. The memorandum contained the following guidance:
- EPCRA Initial Reporting Requirements- If a well owner maintains any hazardous chemical for which a facility must maintain a Material Safety Data Sheet (MSDS) in quantities at or above 10,000 pounds, the owner must provide written notice to the SERC, LEPC and local fire department within 90 days after receiving a shipment or producing the substance at the site. A lower reporting threshold applies to chemical classified as "Extremely Hazardous Substances (EHS)."
- Tier II Chemical Inventory Annual Reporting- By March 1st of each year, a well owner must provide a chemical inventory report annually if, at any time during the calendar year, the owner stored more than 10,000 pounds of a hazardous chemical or between 1 to 500 pounds of an EHS (depending on the chemical).
- Trade Secret Claims- Any well owner who does not want to disclose a particular chemical for proprietary reasons, must follow U.S. EPA's procedures for asserting trade secret protection.
Failure to comply with EPCRA requirements may result in enforcement by U.S. EPA, including civil penalties of up to $32,500 per day for violations of the Tier II chemical reporting requirements. It is worth noting that U.S. EPA frequently takes enforcement for failure to comply with EPCRA reporting requirements.
If you believe you may have failed to report, it may be worth evaluating U.S. EPA Audit Policy. If a company performs a voluntary audit of its compliance an discloses any noncompliance to U.S. EPA, the company may qualify for reduction in civil penalties. You should consult your attorney before deciding whether to report noncompliance under the Audit Policy.