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EPA Finds That Financial Risks from Petroleum and Coal Products Manufacturing Industry Does Not Warrant Additional Federal Requirements

12/04/2019
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WASHINGTON (Dec. 4, 2019) — Today, the U.S. Environmental Protection Agency (EPA) is proposing to not impose burdensome and potentially duplicative financial responsibility requirements for the petroleum and coal products manufacturing industry (the industrial sector that transforms crude petroleum and coal into usable products) because the financial risk to the federal government from those facilities is already addressed by various existing federal and state technical and financial requirements and modern material management practices. EPA’s proposed action would not drop existing federal requirements, rather it is a proposal to not impose additional requirements.

“After a thorough evaluation, EPA has determined that the petroleum and coal manufacturing industry’s current practices, along with existing federal and state regulations, adequately address potential financial risks to the federal government and American taxpayer,” said EPA Administrator Andrew Wheeler. “As part of President Trump’s commitment to protecting our environment and growing our economy, we are committed to responsible regulation while not imposing additional and unnecessary requirements on key sectors of the economy when the current regulatory framework is working.”

In the 39 years since the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was enacted, a comprehensive regulatory framework has developed. Existing monitoring and operation standards have consistently worked over time to decrease the risk in this industry that if a hazardous waste cleanup is needed, the federal government will have to bear the cost of cleanup.

Further, this proposed finding does not affect, limit, or restrict EPA’s current authority to take a response action or enforcement action under CERCLA at any facility in this industry, to include requirements for financial responsibility as part of such response action, or to take appropriate action under various other federal environmental statutes that may apply to individual facilities, such as the Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act, and Toxic Substances Control Act. These existing regulations, including financial responsibility requirements, continue to apply to facilities in this industry.

This proposal is consistent with the analysis EPA undertook in developing its final action for the hard rock mining industry. In that case, EPA’s approach was unanimously upheld by the D.C. Circuit Court of Appeals in July 2019. EPA has evaluated the degree and duration of risk of the possible cost to cover the cleanup of hazardous substance releases associated with the production, transportation, treatment, storage, or disposal of hazardous substances in the petroleum and coal products manufacturing industry. EPA also examined the industry’s economic trends and the financial health of the sector and found the industry to be in a relatively stable financial position with low default risk. EPA’s evaluation showed that existing regulatory programs and voluntary practices reduce the need for federally financed response action at facilities in this industry.

Background

Section 108(b) of CERCLA, also known as Superfund, directs EPA to develop regulations requiring classes of facilities to establish and maintain evidence of financial responsibility to cover the costs associated with releases or threatened releases of hazardous substances from their facilities.

In December 2016, EPA described its plan to consider financial requirements under CERCLA for the electric power industry, the petroleum and coal products manufacturing industry, and the chemical manufacturing industry. On July 2, 2019, EPA proposed to not issue financial responsibility requirements for the electric power industry. EPA is currently working on a proposal for the chemical manufacturing industry.

Today’s proposal for the petroleum and coal industry will be published in the Federal Register, and EPA invites stakeholders and the public to provide comments during the 60-day public comment period.

For more information, visit: https://www.epa.gov/superfund/superfund-financial-responsibility.