Ashland Oil, Inc., Floreffe, PA

Plain-English summary

Ashland Oil operated a petroleum marketing terminal in Floreffe, Pennsylvania. EPA alleged that Ashland’s Spill Prevention Control and Countermeasure Plan did not identify underground storage tanks and was not amended promptly after a 74,000-barrel tank was replaced with a 96,000-barrel tank. The Environmental Appeals Board held that the plan was not carefully thought out because it omitted the underground tanks, and that the amendment had to be made when the facility change occurred rather than months later. It affirmed both violations and increased the total civil penalty to $55,125.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 22.30, 112.1, 112.3, 112.5, 112.6, 112.7, 114.1, and 114.10; 33 U.S.C. § 1321.
• Outcome: The SPCC violations were affirmed, and the civil penalty was increased to $55,125.
• Key point: An SPCC Plan must account for underground storage tanks and must be amended contemporaneously with a facility change that materially affects the potential for an oil discharge.

Full text (EPA EAB public release)

ASHLAND OIL, INC., FLOREFFE, PA 235
IN THE MATTER OF ASHLAND OIL, INC., FLOREFFE,
PA
SPCC Appeal No. 91-1
FINAL DECISION
Decided September 15, 1992
Syllabus

Ashland Oil, Inc. appeals from an initial decision assessing a civil penalty of
$51,000 for its failure to prepare and maintain a Spill Prevention Control and Counter-
measure (“SPCC”) Plan in accordance with 40 CFR Part 112. The initial decision
states that Ashland’s SPCC Plan failed to meet the requirements of § 112.7 because
it failed to describe adequately the location of storage tanks and failed to disclose
the existence of underground storage tanks. The initial decision also provides that
Ashland failed to amend its plan as soon as possible after a change at the facility
necessitating an amendment under § 112.5.

Held: Section 112.5 requires an SPCC Plan to be amended contemporaneously
with the event necessitating the amendment. Ashland’s amendment of its SPCC Plan
five months after the replacement of a tank violated §112.5. In addition, Ashland’s
failure to disclose the existence of underground storage tanks demonstrates that Ash-
land’s SPCC Plan was not “carefully thought-out” as required by §112.7. A total
penalty of $55,125 is assessed.

Before Environmental Appeals Judges Nancy B. Firestone
and Ronald L. McCallum.

Opinion of the Board by Judge Firestone:

Ashland Oil, Inc. appeals the decision of the Presiding Officer
assessing a civil penalty of $51,000 for Ashland’s failure to prepare
and maintain a Spill Prevention Control and Countermeasure
(“SPCC”) Plan in accordance with 40 CFR Part 112 for its facility
in Floreffe, Pennsylvania. Following a hearing held pursuant to 40
CFR Part 114, the Presiding Officer concluded that Ashland’s SPCC
Plan was not “carefully thought-out” as required by 40 CFR § 112.72

1Environmental Appeals Judge Edward E. Reich did not participate in this deci-
sion.
2 Section 112.7 provides, in relevant part:
Continued
VOLUME 4
236 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

because it failed to describe adequately the location of above ground
storage tanks, and to disclose the existence of underground storage
tanks, and therefore Ashland violated 40 CFR § 112.3 which requires
preparation of an SPCC Plan in accordance with § 112.7. The Presid-
ing Officer also concluded that Ashland violated 40 CFR §112.5(a)
by failing to amend its SPCC Plan as soon as possible after replacing
a 74,000 barrel storage tank with a 96,000 barrel tank. For the
reasons set forth below, we affirm the Presiding Officer’s conclusion
that Ashland violated §§ 112.3 and 112.5(a), and we assess a penalty
of $55,125 for these violations.

FACTUAL AND PROCEDURAL BACKGROUND

Ashland owns and operates a petroleum marketing terminal in
Floreffe, Pennsylvania. The terminal is adjacent to a small stream,
Lobbs Run, which is a tributary of the Monongahela River. On Janu-
ary 2, 1988, Ashland filled, for the first time, a new tank designated
as tank 1338. During this filling, the tank ruptured and collapsed,
resulting in a spill of approximately 1,000,000 gallons of oil into
the Monongahela River. See Region’s Response, at 4.

During an inspection of the facility on January 7, 1988, Ashland
gave the EPA Region III inspector a copy of its SPCC Plan. On
the same date, Ashland amended its SPCC Plan to reflect the replace-
ment of old tank 1338, which held 74,000 barrels of oil, with new
tank 1338, which was designed to hold 96,000 barrels of oil. The
amendment states that construction of new tank 1338 was completed
on August 15, 1987, and that the new tank was connected to piping
in November 1987.

After reviewing Ashland’s SPCC Plan as amended, Region III
issued a notice of violation (“NOV”) on January 30, 1989. The NOV
alleged that Ashland violated 40 CFR §112.3 (a) or (b)® because
its SPCC Plan failed to meet the requirements of 40 CFR § 112.7
in two ways: (1) it was not “carefully thought-out” and in accordance

The SPCC Plan shall be a carefully thought-out plan, prepared

in accordance with good engineering practices; and which has the

full approval of management at a level of authority to commit

the necessary resources.

3Section 112.3(a) provides that owners and operators of facilities that “have dis-

charged, or, due to their location, could reasonably be expected to discharge oil in
harmful quantities * * * into or upon the navigable waters of the United States

• • • shall prepare a Spill Prevention Control and Countermeasure Plan * * * in
      accordance with § 112.7.” Section 112.3(b) is substantially similar. The only difference
      between the two is the deadline for compliance, which is based on the operational
      date of the facility in relationship to the effective date of the regulations.
      VOLUME 4
      ASHLAND OIL, INC., FLOREFFE, PA 237
      with good engineering practices because the plan was generic, not
      specific to the Floreffe terminal, and (2) it failed to address reason-
      ably anticipated types of equipment failures, or to predict the rate
      and direction of a possible spill.4 The NOV also alleged that Ashland
      violated 40 CFR §112.5(a) by failing to amend its SPCC Plan to
      reflect the replacement of old tank 1338 immediately upon completion
      of the new tank on August 15, 1987. The Region sought a penalty
      of $145,000 for these violations, based on its calculation that the
      penalty should be $1,000 per day for the 145-day period of non-
      compliance between August 15, 1987 and January 7, 1988 (between
      the date the new tank was completed and the date Ashland amended
      its SPCC plan).

Ashland requested a hearing on the allegations made in the
NOV, and the hearing was held on May 17 and 18, 1990, before
the Presiding Officer. In February 1991, Ashland filed a motion to
dismiss the action on the ground that the Presiding Officer failed
to issue a decision within thirty days of the close of the hearing
as required by 40 CFR §114.10. The Presiding Officer denied Ash-
land’s motion to dismiss, and issued an initial decision on May 22,
1991.

In the May 22, 1991 decision, the Presiding Officer rejected the
Region’s contention that Ashland’s SPCC Plan was deficient for the
reasons advanced by the Region at the hearing. Instead, the Presiding
Officer concluded that Ashland’s SPCC Plan failed to meet the re-
quirements of § 112.7 in two respects: it failed to describe adequately
the location of the terminal’s storage tanks, and to disclose the exist-
ence of the terminal’s underground storage tanks. Therefore, the Pre-
siding Officer concluded, Ashland’s SPCC Plan was not “carefully
thought-out” as required by §112.7, and Ashland violated § 112.3
by failing to have an SPCC Plan prepared in accordance with § 112.7.
Initial Decision, at 7—8.

The Presiding Officer also determined that the replacement of
old tank 1338 with new tank 1338 was a change in the facility
requiring an amendment to Ashland’s SPCC Plan under § 112.5(a).
The Presiding Officer interpreted § 112.5(a) as requiring the amend-
ment to be made “as soon as possible.” Initial Decision, at 13. Accord-

4 See 40 CFR § 112.7(b), which provides:

(b) Where experience indicates a reasonable potential for equip-
ment failure (such as tank overflow, rupture, or leakage), the
plan should include a prediction of the direction, rate of flow,
and total quantity of oil which would be discharged from the
facility as a result of each major type of failure.
VOLUME 4
238 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

ing to the Presiding Officer, Ashland violated § 112.5(a) because its
January 7, 1988 amendment to the SPCC Plan was not made as
soon as possible after the August 15, 1987 completion of the new
tank.

For these two violations, the Presiding Officer assessed a civil
penalty of $51,000. This penalty is based on the Presiding Officer’s
conclusion that a per-day penalty of $750 is appropriate. The Presid-
ing Officer determined that Ashland was in violation of the regula-
tions for the sixty-eight-day period beginning in November 1987,
when the new tank was first connected to piping, and ending on
January 7, 1988, the date of the inspection and the amendment.

This appeal followed. Ashland urges several reasons for setting
aside the Presiding Officer’s initial decision. Ashland contends that
the Presiding Officer’s factual findings are not supported by the
record, and that the Presiding Officer failed to find certain facts
established by the record. Ashland also maintains that its SPCC
Plan fully complies with the requirements of § 112.7, that is, that
the plan is “carefully thought-out.” Ashland argues that the replace-
ment of tank 1338 was not a change in the facility that required
an amendment to its SPCC Plan, and even if it was, Ashland amend-
ed its plan within the six month period Ashland argues is allowed
by §112.5(a). Concerning the penalty, Ashland argues that § 311(j)
of the Clean Water Act (“CWA”), 33 U.S.C. § 1321(j) (1989),5 does
not authorize the imposition of a daily penalty for a continuous viola-
tion of the SPCC regulations. Finally, Ashland argues that the Presid-
ing Officer’s decision should be set aside because it was not issued
within the thirty-day time period provided by 40 CFR § 114.10.

The Region did not appeal the Presiding Officer’s decision to
assess a penalty substantially less than that sought by the Region.
Nevertheless, in response to Ashland’s appeal, the Region argues
that the Presiding Officer should have assessed the penalty sought
by the Region. Because reply briefs are limited to issues raised by
the appeal, cf., 40 CFR §22.30(a)(2), and because the Region did
not file an appeal, we will not consider the Region’s arguments con-
cerning aspects of the penalty calculation not raised by Ashland’s
appeal.

5This statute was amended by the Oil Pollution Act of 1990, Pub. L. No. 101-
380, 101 Stat. 484 (1990), after the Presiding Officer’s final decision in this case.
All references to the CWA in this decision are to the statute in effect prior to the
1990 amendments.

VOLUME 4
ASHLAND OIL, INC., FLOREFFE, PA 239
ANALYSIS
A.

Ashland’s claim that the Presiding Officer’s decision should be
set aside because it was not issued within thirty days from the
close of the hearing as required by 40 CFR § 114.10 6 is without
merit. Because §114.10 is directive, not jurisdictional, the failure
to adhere to its terms does not deprive the Presiding Officer of juris-
diction or automatically invalidate the Presiding Officer’s decision.
The failure to issue a timely decision pursuant to § 114.10 requires
setting aside a decision only upon a demonstration of specific preju-
dice resulting from the delay. See In re Eureka Chemical Co., SPCC
Appeal No. 84-1, at 3 (Nov. 14, 1985); In re Proctor Coal Co., SPCC
1-96 (Feb. 18, 1977); In re Brewer Chemical Corp., SPCC-IX-27C,
at 2-3 (May 19, 1976). Ashland contends that it was prejudiced
by the Presiding Officer’s delay in that it suffered damage to its
business reputation and good-will. Notice of Appeal, at 22. We agree
with Region III that any injury to Ashland’s business reputation
and good-will in this case stemmed from the oil spill, and not from
the Presiding Officer’s delay in issuing a decision on the merits of
the alleged SPCC violations.7 Ashland has failed to show it was
prejudiced by the Presiding Officer’s failure to comply with § 114.10,
and therefore the error is harmless.®

B.

Ashland contends that the Presiding Officer’s decision contains
findings of fact that are not supported by substantial evidence in
the record. Notice of Appeal, at 4. Ashland refers to two of the
~~ 6That regulation provides, in pertinent part, that “[w]ithin thirty (30) days after
the conclusion of the hearings, the Presiding Officer shall issue findings with respect
to the matter, including, where appropriate to the amount of the civil penalty.”

7Indeed, Ashland’s brief on this issue specifically refers to the “adverse publicity
from the oil spill.” Notice of Appeal, at 23.

8 Ashland relies upon Vitarelli v. Seaton, 359 U.S. 535 (1959); Service v. Dulles,
354 U.S. 363 (1957); and Accardi v. Shaugnessy, 347 U.S. 260 (1954), to argue that
the Agency is bound by its own procedural rules. The procedural rules involved in
those cases, however, conferred either a substantive benefit or a procedural safeguard
upon the party objecting to the agency’s failure to follow its own rules. In contrast,
the requirement of §114.10 is intended primarily to regulate the Agency’s conduct
of its internal procedures. See American Farm Lines v. Black Ball Freight Service,
397 U.S. 532 (1970).

VOLUME 4
240 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

five factual findings the Presiding Officer made early in the proceed-

ings ® and contained in the initial decision. These findings are:

1. Ashland Oil, Inc. (“Ashland”), is the owner and
   operator of a facility located at Highway 837 and
   Walton Road in Floreffe, Pennsylvania. The terminal
   is adjacent to a small stream, Lobbs Run, which
   is a tributary of the Monongahela River.
2. On January 2, 1988, an oil spill occurred at the
   facility resulting from the rupture and collapse of
   tank number 1338. This oil eventually spilled into
   the Monongahela River.
3. On January 7, 1988, an EPA inspector visited
   the facility to determine its compliance with the reg-
   ulations governing the storage of oil under 40 CFR
   Part 112. At the time of the inspection, tank number
   1338 had a capacity of 96,000 barrels of oil.
4. The January 7, 1988 inspection revealed the fol-
   lowing:
   (a) Ashland replaced old Tank Number 1338 which
   had a capacity of 74,000 gallons [sic] of oil. This
   replacement was completed on August 15, 1987.
   (b) Ashland amended its SPCC Plan on January 7,
   1988 to show the replacement of old Tank Number
   1338, which had a capacity of 74,000 barrels of oil
   with new Tank Number 1338, which had a capacity
   of 96,000 barrels of oil.
5. The new Tank Number 1338 was connected to
   piping in November, 1987 and was filled to capacity
   on January 2, 1988.

Initial Decision, at 3—4.

Ashland argues that finding number 3 is impossible because the
tank, having ruptured and collapsed five days prior to the inspection
(as reflected in finding number 2), had no capacity to hold oil on

°See Presiding Officers May 14, 1990 Order denying Region’s Motion for an
Accelerated Decision.
VOLUME 4
ASHLAND OIL, INC., FLOREFFE, PA 241
the date of the inspection. This alleged error is harmless because
it had little or no impact on the Presiding Officer’s conclusion. The
fact germane to the issues in this case is that at the time of its
collapse, tank 1338 had a capacity of 96,000 barrels of oil. This
fact is undisputed.1°

Ashland also contends that with respect to finding 4(a), the evi-
dence establishes only that construction of the new tank was com-
pleted on August 15, 1987, and that the new tank did not replace
the old tank until it could be used for oil storage, which occurred
in November 1987 when it was connected to the piping. This conten-
tion also warrants little discussion. There is no dispute that the
construction of the new tank was completed on August 15, 1987.
Ashland’s amendment to its SPCC Plan (which was made after No-
vember 1987), reflects Ashland’s determination that the new tank
replaced the old tank as of August 15, 1987.11

Ashland also argues that the Presiding Officer erred by failing
to find certain facts supported by the record, namely, that Ashland’s
SPCC Plan was “carefully thought-out,” and that Ashland had six
months after replacing old tank 1338 to amend its SPCC Plan. Notice
of Appeal, at 4-7. Contrary to Ashland’s suggestions, these are not
facts to be found, but rather legal conclusions to be made based
upon an interpretation of the applicable regulations. Therefore, we
conclude that the Presiding Officer did not err by failing to find
these “facts.”

C.

Section 112.3 requires that owners and operators of facilities
shall prepare an SPCC Plan in accordance with §112.7.12 Section
112.7 states that “(t]he SPCC Plan shall be a carefully thought-
out plan, prepared in accordance with good engineering practices

• • *”13 The Presiding Officer concluded that Ashland violated
    § 112.3 because its plan was not “carefully thought-out” in accordance
    with § 112.7. Specifically, the Presiding Officer found that Ashland’s

10 Ashland’s SPCC Plan amendment states that new tank 1338 has a capacity
of 96,000 barrels of oil.

11Ashland’s SPCC Plan amendment states that “on August 15, 1987 a 96,000
barrel tank was re-constructed at Floreffe Terminal in the place of the previous 74,000
barrel tank, No. 1338.”

12 See note 3, supra.

13 The “carefully thought-out” requirement is separate from the requirement that
a plan be prepared in accordance with good engineering practices. See In re Mobil
Oil Corp., SPCC-VII-123 (Mar. [_], 1976).

VOLUME 4
242 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

plan was not “carefully thought-out” because it “failed to adequately
describe tank locations or disclose the existence of underground stor-
age tanks.” Initial Decision, at 7.

Ashland argues that §112.7 contains guidelines, not require-
ments, and therefore there is no requirement that an SPCC Plan
be “carefully thought-out.” Even if an SPCC Plan is required to be
“carefully thought-out,” Ashland asserts that its SPCC Plan met this
requirement because it provides for adequate containment and there-
fore need not disclose the location of above and underground storage
tanks. Furthermore, Ashland argues that the Region failed to meet
its burden of proof on this issue because the inspector admitted
that he did not question the draftsman of the plan, who testified
in detail about his thought process in making the SPCC Plan.

Ashland’s argument focuses on the meaning of the “carefully
thought-out” language in the introductory paragraph of § 112.7, which
provides that an SPCC Plan “shall be a carefully thought-out plan.”
(Emphasis added.) The use of the word “shall” indicates that “care-
fully thought-out” is a requirement, and not merely a suggestion
as Ashland would have us believe. Although § 112.7 is entitled
“Guidelines for the preparation and implementation of a Spill Preven-
tion Control and Countermeasure Plan,” such guidelines are con-
tained in the lettered paragraphs of § 112.7, and not in the introduc-
tory paragraph of the regulation where the “carefully thought-out”
requirement is found.14 The guidelines in the lettered paragraphs
are designed to allow each facility to prepare an SPCC Plan suitable
to its particular design and operation. While each guideline may
not be mandatory in every case, given the differences among facilities,
every SPCC Plan must still satisfy the “carefully thought-out” re-
quirement.

Neither the regulations nor previous SPCC decisions by the Ad-
ministrator define the “carefully thought-out” requirement. In the
absence of any guidance from these sources, we interpret this require-
ment in light of the purposes of the SPCC regulations. The SPCC
regulations were promulgated pursuant to § 311(j)(1)(C) of the CWA.
See 38 Fed. Reg. 14,334 (Jul. 19, 1973). Section 311(j)(1)(C) provides
that regulations shall be issued to establish “procedures * * * to

14The last sentence of the introductory paragraph of § 112.7 provides that a “com-
plete SPCC Plan shall follow the sequence outlined below, and include a discussion
of the facility’s conformance with the appropriate guidelines listed.” The guidelines
are then listed in the following lettered paragraphs. The guidelines in the lettered
paragraphs use the non-mandatory “should,” whereas the introductory paragraph uses
the imperative “shall.” See 38 Fed. Reg. 34,164 (Dec. 11, 1973).

VOLUME 4
ASHLAND OIL, INC., FLOREFFE, PA 243
prevent discharges of oil * * * and to contain such discharges.” (Em-
phasis added.) Consistent with the dual purposes of the regulations,
an SPCC Plan should provide for the prevention of oil spills and
for containment measures if preventative measures fail.

Plainly, a “carefully thought-out” SPCC Plan will address both
purposes of prevention and containment. Accordingly, we disagree
with Ashland’s argument that because its SPCC Plan arguably pro-
vided for adequate containment of a smaller spill, there was no need
to disclose the existence of underground storage tanks in order to
comply with this requirement. The SPCC regulations are intended
to prevent spills by requiring owners and operators to address the
risks of potential spills at their facilities. The regulations contemplate
that spills could occur from underground tanks. The failure to dis-
close the existence of underground storage tanks strongly suggests
that Ashland had no plan to prevent a spill from those sources,
as required by the SPCC regulations. The disclosure of underground
storage tanks is an essential element of a plan to control spills from
these sources. The omission of underground storage tanks from the
plan 16 is more indicative of carelessness than carefulness in plan
preparation.!7

Therefore, we affirm the Presiding Officer’s conclusion that Ash-
land violated the requirement in § 112.7 that its SPCC Plan be “care-
fully thought-out” by failing to disclose the existence of underground
storage tanks.18

We also disagree with Ashland’s contention that the “carefully
thought-out” requirement is a subjective standard that can be satis-
fied by evidence that the person who prepared the plan carefully

15See 40 CFR §112.1(d) (Part 112 applies to facilities where the underground
storage is more than 42,000 gallons of oil and the above ground storage capacity
is 1,320 gallons or less of oil).

16 Ashland does not deny that it made this omission. See Hearing Transcript,
at 259-262. Charles D. Norton, the Ashland employee who prepared the SPCC Plan,
testified that the facility's underground storage tanks were not identified anywhere
in the SPCC Plan.

17 See, e.g, In re Mobil Oil Corp., SPCC-VII-123, at 8 (Mar. [ ], 1976) (SPCC
Plan’s failure to describe size, location and composition of dike used for containment
shows plan was not, inter alia, “carefully thought-out”).

18The Presiding Officer also concluded that Ashland’s plan was not carefully
thought-out because it failed to adequately describe tank locations. The basis for
the Presiding Officer’s conclusion is not clear from the record or the regulations.
Since the failure to disclose the underground storage tanks clearly violates § 112.7
and supports a penalty, we do not need to address whether the failure to adequately
describe tank locations was also a violation of § 112.7.

VOLUME 4
244 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
thought about what he or she put into the plan. If the “carefully
thought-out” requirement is subjective, then any plan would meet
the requirement provided someone put some thought into it, even
though the plan may contain unreasonable errors and/or omissions.
A more practical approach is to assess the “carefully thought-out”
requirement on an objective basis. The Presiding Officer used an
objective approach, and concluded that the failure to disclose the
existence of underground storage tanks in a plan intended to provide
for prevention and containment of spills from those tanks is an unrea-
sonable omission sufficient to establish a lack of careful planning.
The Presiding Officer’s application of the “carefully thought-out” re-
quirement is reasonable and consistent with the dual purposes of
the SPCC regulations, and Ashland provides no reason to set it aside.
D.

Section 112.5(a), in pertinent part, provides:

Owners or operators of facilities * * * shall amend

the SPCC Plan for such facility in accordance with

§ 112.7 whenever there is a change in facility design,

construction, operation or maintenance which materi-

ally affects the facility's potential for the discharge

of oil into or upon the navigable waters of the United

States * * *. Such amendments shall be fully imple-

mented as soon as possible, but not later than six

months after such change occurs.
The Presiding Officer concluded that the replacement of old tank
1338 with new tank 1338 on August 15, 1987, was a change in
the construction of the facility that materially affected the facility's
potential to discharge oil into the navigable waters of the United
States because it increased the volumetric capacity of the tank by
30% and placed the tank closer to the dike walls. Thus, according
to the Presiding Officer, Ashland’s SPCC Plan had to be amended
to reflect this change as soon as possible after the change.

Ashland contends that the Presiding Officer erred in finding that
the replacement of tank 1338 necessitated an amendment to its SPCC
Plan pursuant to 40 CFR §112.5(a). Even if an amendment is re-
quired, Ashland maintains that the regulation allows six months
to make the amendment. Because Ashland amended its SPCC Plan
within six months of the completion of the new tank, Ashland asserts
that the Presiding Officer erroneously concluded that Ashland vio-
VOLUME 4
ASHLAND OIL, INC., FLOREFFE, PA 245
lated §112.5(a) by not making an amendment as soon as possible
after the tank replacement.

Section 112.5(a) unambiguously requires an amendment “when-
ever there is a change in facility * * * construction * * * which
materially affects the facility’s potential for the discharge of oil into
or upon the navigable waters of the United States.” It is undisputed
that the completion of tank 1338 in August 1987 was a change
in the construction of the facility. The issue is whether this change
materially affected the facility's potential to discharge oil into navi-
gable waters. Ashland maintains that the change did not materially
affect. the facility's potential to discharge oil because at all times
the containment for tank 1338 was sufficient under the regulations. 19
In other words, according to Ashland, the dike around tank 1338
was sufficient to contain the entire contents of either the old tank
or the new tank, and therefore the completion of the new tank did
not change the facility’s potential to discharge oil.

We disagree. First, the voluntary amendment of its plan on Janu-
ary 7, 1988 evidences Ashland’s own determination prior to these
proceedings that an amendment is required pursuant to § 112.5(a).
Second, we agree with the Presiding Officer that the replacement
of the old tank with a tank closer to the dike walls and with 30%
more volumetric capacity increased the facility's potential to discharge
oil. The increase in the capacity of one tank by 30%, or 840,000
gallons of oil, also increases the potential for oil to be discharged
into navigable waters.

The next issue is whether the Presiding Officer correctly con-
cluded that Ashland violated § 112.5(a) because its amendment was
not made as soon as possible after the replacement of tank 1338.
In the final order, the Presiding Officer interpreted § 112.5(a) as
“requirling] amendment of a SPCC Plan as soon as possible.” Initial
Decision, at 13. The Presiding Officer decided that Ashland’s amend-
ment five days after the spill (and almost five months after the
completion of the new tank) was not “as soon as possible” after
the change, and therefore Ashland violated § 112.5(a). Id. Ashland
contends it had six months from the date of the change to make
the amendment. We agree with the Presiding Officer that Ashland
failed to amend its SPCC Plan in a timely fashion under § 112.5(a),
but for slightly different reasons.

" 19See § 112. 7(eX2Mii).
VOLUME 4
246 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Although §112.5(a) details the events requiring an amendment
to the plan (a change in facility design, construction, operation or
maintenance materially affecting the facility’s potential to discharge
oil into navigable waters), it does not explicitly detail the time period
within which the amendment must be made.?° The regulation, how-
ever, does provide that a plan shall be amended “whenever” there
is such a change, and that the amendment should be “implemented”
as soon as possible but not later than six months after the change
that necessitated the amendment. This language leads us to conclude
that § 112.5(a) requires that SPCC Plan amendments be made con-
temporaneously with the event that triggered the need for the amend-
ment.

Ashland, by arguing that it had up to six months to make the
amendment as well as to implement it, equates the amendment itself
with its implementation. We interpret the regulation differently. The
term “implement” contemplates something in existence to be imple-
mented. This concept is evident throughout the SPCC regulations
pertaining to SPCC Plan implementation.?! Moreover, there is noth-
ing in §112.5(a) to suggest that a contrary interpretation should
apply. In addition, we interpret the term “whenever” in § 112.5(a)
as referring not only to the specific event triggering the need for
an amendment, but also as referring to when such an amendment
should be made, i.e., contemporaneously with the event. This inter-
pretation allows the amendment to be made before it is imple-
mented.2?

20Tn contrast, the only other regulation pertaining to plan amendments expressly
allows a facility six months to make the amendment. Section 112.5(b) provides that
if, as a result of a review performed every three years, a facility owner or operator
determines that an amendment is necessary, “the owner or operator shall amend
the SPCC Plan within six months of the review.” Given this express six-month author-
ization for certain amendments, we conclude, for the reasons stated above, that amend-
ments required under §112.5(a) must be contemporaneous with the change in the
facility.

21For example, the regulations requiring promulgation of SPCC Plans specifically
allow implementation within a certain time after promulgation. See 40 CFR §§ 112.3(a)
and (b). In fact, in contrast to § 112.5(a), these sections specify a set time for promulga-
tion, and provide another set period for implementation, again affirming the view
that when the Agency intended to provide a time for preparation of a plan and
implementation, it did so expressly.

22This is consistent with the Presiding Officer's analysis of the issue in the May
14, 1990 Order, supra, note 9, which we find more precise and persuasive than
the analysis in the May 22, 1991 Initial Decision. In the Order, the Presiding Officer
stated that “{t]he drafters of the regulations clearly knew how to differentiate between
the terms ‘amend’ and ‘implement.’ I find that 40 CFR §112.5(a) requires that an
amendment to an SPCC Plan be made when the change occurs but allows up to
six months for full implementation of the amendment.” Order, at 6. It is not evident
VOLUME 4
ASHLAND OIL, INC., FLOREFFE, PA 247

Finally, this interpretation, in contrast to the one advanced by
Ashland, furthers the purposes of the SPCC regulations. As discussed
above, the purpose of an SPCC Plan is to provide for prevention
and containment of oil spills. Section 112.5(a) identifies several trig-
gering events that are sufficiently significant to warrant an amend-
ment. If the plan is amended as soon as the triggering event occurs,
the goals of spill prevention and containment can be promptly
achieved and enhanced. Allowing six months to lapse prior to amend-
ing the SPCC Plan, as Ashland suggests, substantially hampers a
facility’s ability to prevent and contain a spill because the plan does
not reflect the true state of the facility. Indeed, that is exactly what
happened here.

Ashland amended its SPCC Plan to reflect the August 15, 1987
replacement of tank 1338 on January 7, 1988. Because the amend-
ment was approximately five months after, and not contemporaneous
with, the tank replacement, Ashland violated § 112.5(a).

E.

Pursuant to 40 CFR §114.1, the Presiding Officer imposed a
$51,000 penalty for Ashland’s violations of §§ 112.3 and 112.5. Section
114.1,23 in pertinent part, provides:

Owners or operators of facilities * * * who violate

the requirements of part 112 of this subchapter D

by failing or refusing to comply with any of the provi-

sions of §112.3, 112.4 or 112.5 of this subchapter

shall be liable for a civil penalty of not more than

$5,000 for each day such violation continues.
The Region sought a penalty of $145,000 on the ground that Ash-
land’s violations required a penalty of $1,000 per day for the 145-
day period between August 15, 1987 (the date new tank 1338 was
complete) and January 7, 1988 (the date Ashland amended its SPCC
Plan and EPA inspected the facility). Instead, the Presiding Officer
decided that the period of non-compliance began in November 1987
when the new tank was connected to the piping, and ended on Janu-
ary 7, 1988. According to the Presiding Officer, this period equaled
sixty-eight days. The Presiding Officer decided that a per day penalty
of $750 is appropriate, for a total penalty of $51,000.
why the Presiding Officer used the more general “as soon as possible” language in
the Initial Decision.

23This regulation is substantially similar to 40 CFR § 112.6, which also authorizes
daily penalties of up to $5,000 for violations of Part 112.

VOLUME 4
248 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Ashland contests this penalty assessment solely on the ground
that § 114.1 allows penalties up to $5,000 per day of violation and
thus conflicts with § 311(j)(2) of the CWA,24 which Ashland contends
authorizes a maximum penalty of $5,000 for each violation. Ashland
requests that the Presiding Officer’s decision be set aside on this
ground, or in the alternative, that the amount of the penalty be
reduced.

Generally, the validity of final Agency regulations is not
reviewable in Agency enforcement proceedings.25 Otherwise, Agency
enforcement proceedings would turn into routine requests to recon-
sider regulations at the expense of scarce Agency resources and estab-
lished rulemaking procedures. In re Dow Chemical Co., TSCA (16(a))-
1, at 9, 18 (July 28, 1982).26 Accordingly, we will not review the
validity of § 114.1 in this proceeding.

Even if we were to review this issue, we are not persuaded
by Ashland’s argument. Ashland argues that provisions in the Oil
Pollution Act of 1990 (“OPA”) confirm its conclusion that the regula-
tions authorizing daily penalties conflict with the statute authorizing
penalties for violations of the SPCC regulations, CWA § 311(j)(2).
The OPA amended §311(j), and the new version expressly allows
penalties for each day of a violation. Ashland contends that this
represents a change from the original CWA §311(j)(2) penalty provi-
sion applicable here. To the contrary, we conclude that the OPA
only clarified, but did not change, the law. The regulations authoriz-
ing daily penalties for violations of the SPCC rules are valid Agency
interpretations of §311(j)(2) as it existed prior to the OPA. By amend-
ing § 311(j)(2) to allow for daily penalties, Congress merely ratified
the Agency’s longstanding interpretation of the law. See Red Lion
Broadcasting Co. v. FCC, 395 U.S. 367, 380-382 (1969) (years of

24Section 311(4)(2) provides that “[alny owner or operator of a * * * facility * * *
subject to any regulation issued under paragraph (1) of this subsection who fails
or refuses to comply with the provisions of such regulations shall be liable to a
civil penalty of not more than $5,000 for each violation * * *.”

25 See In re Dow Chemical Co., TSCA (16(a))-1 (July 28, 1982). See also In re
Federal-Hoffman, Inc., RCRA (3008) Appeal No. 87-15, at 2 (Dec. 18, 1989); In re
South Coast Chemical, Inc., FIFRA Appeal No. 84-4, at 10 (Mar. 11, 1986); In re
American Ecological Recycling Research Corp., RCRA (3008) Appeal No. 83-3, at 5
(July 18, 1985); In re Georgia Pacific Corp., NPDES Appeal No. 84—2, at 3 n.3 (Apr.
29, 1985).

26 See also RSR Corp. v. Donovan, 747 F.2d 294, 301 (5th Cir. 1984) (“An agency
has an interest in finality and conservation of its resources. It should not be compelled
to defend the same regulation against identical attacks in successive enforcement
actions, when those challenges could and should have been asserted in the period
for pre-enforcement review”).

VOLUME 4
ASHLAND OIL, INC., FLOREFFE, PA 249
administrative statutory construction undisturbed until Congress ex-
pressly adopted that construction reinforces natural conclusion that
Agency correctly construed prior law).?7

Although we agree with the Presiding Officer that daily penalties
are valid, we disagree with the Presiding Officer’s calculation of the
number of days Ashland was in non-compliance with §§112.7 and
112.5(a). According to the Presiding Officer, the period of non-compli-
ance began when new tank 1338 was connected to piping in Novem-
ber 1987, and thereby first posed a threat of discharge, and ended
sixty-eight days later when Ashland amended its SPCC Plan. The
Presiding Officer neglected to explain how the occurrence and con-
tinuation of each violation correlates with this period of non-compli-
ance.

We conclude that the Presiding Officer did not establish the
proper correlation. Ashland’s violation of §112.5(a) occurred when
Ashland failed to amend its plan contemporaneously with the August
15, 1987 completion of the new tank, not when the tank was con-
nected to the piping.?® This period is 145 days. Concerning the viola-
tion of §112.7, it is arbitrary to relate this violation (the failure
to disclose underground storage tanks in the SPCC Plan) to the
date when the new tank was connected to the piping, or for that
matter, to the date when construction of the new tank was complete,
as urged by the Region. Because it did not exist when the original
SPCC Plan was made, the new tank obviously has nothing to do
with the adequacy of the original SPCC Plan. The completion of
the new tank is relevant only for determining Ashland’s compliance
with the amendment requirement in § 112.5(a). Accordingly, for lack
of any other date advanced by the Region as the commencement
of the period of non-compliance, we conclude that a one-day period
of non-compliance is appropriate for Ashland’s failure to prepare a
“carefully thought-out” plan.

Although we disagree with the Presiding Officer’s calculation of
the period of non-compliance, based on the record before us we have
no basis for questioning the $750 penalty amount assessed for both
violations. Ashland does not contest this amount, and the Region

27We also note that the Ashland employee who prepared the SPCC Plan believed
that the penalty “for not having a plan is $5,000/day.” See Complainant’s Prehearing
Exchange, Enclosure 1.

281t is not clear why the Presiding Officer selected the November 1987 starting
date for the period of non-compliance, as she had previously determined that Ashland
violated §112.5(a) by not amending its SPCC Plan as soon as possible after the
August 15, 1987 replacement of tank 1338.

VOLUME 4
250 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
did not appeal the Presiding Officer’s decision to assess this amount.
In the absence of any contrary indication, we assume that the $750
penalty is evenly divisible between the two violations. Therefore we
conclude that a penalty of $375 is sufficient for Ashland’s violation
of §112.5(a). Accordingly, Ashland’s violation of §112.5(a), (failure
to amend its plan), a 145-day violation, warrants a penalty of
$54,375. With regard to Ashland’s failure to prepare a “carefully
thought-out” plan in accordance with § 112.7, we conclude that $375
is not an adequate penalty, but that Ashland should be assessed
a penalty of $750 for this violation. The total penalty for the two
violations is $55,125.29
CONCLUSION

The Presiding Officer’s decision that Ashland violated 40 CFR
§ 112.3 by failing to have a SPCC Plan prepared in a “carefully
thought-out” manner as required by 40 CFR §112.7 because the
plan failed to disclose the existence of underground storage tanks
is hereby affirmed. In this case, based on the record before us, we
conclude that this was a single violation for which a one-day penalty
of $750 is appropriate. The Presiding Officer’s decision that Ashland
violated § 112.5(a) is also affirmed, but for the reason that Ashland
failed to amend its SPCC Plan contemporaneously with the August
15, 1987 completion of new tank 1338. Because Ashland did not
amend its plan until January 7, 1988, Ashland violated § 112.5(a)
for a period of 145 days. This violation warrants a per-day penalty
of $375. Accordingly, we hereby assess a civil penalty of $55,125
against Ashland. Ashland shall pay the penalty assessed within sixty
(60) days of service of this order by forwarding to the Regional Hear-
ing Clerk, U.S. EPA Region III, a cashier’s or certified check payable
to the United States of America in the amount of $55,125.

So ordered.

29We note that as a result of the Oil Pollution Act of 1990, the authorized
penalty amounts increased from $5,000 to $25,000 per day; accordingly, the penalty
assessment in this case should not be given any precedential value. Indeed, we would
expect in future cases involving violations of these regulations that far larger penalties
would be assessed.
VOLUME 4