PARKERSBURG, W.Va. — Members of the Independent Oil and Gas Association of West Virginia say the state’s requirements for above-ground storage tanks are unfair and are harming the industry.
James McKinney and Jon Hildreth, both board members of IOGA, spoke Tuesday in Parkersburg, saying the rules which are meant to protect drinking water supplies from chemical spills instead place a severe financial burden on oil and gas wells.
“It may put some companies out of business, and it certainly will stifle job growth,” said McKinney, vice president and general manager of EnerVest of Charleston. “It will have a huge, negative economic impact.”
EnerVest operates 1,500 tanks in 24 West Virginia counties. The tank bill affects about 1,300 storage tanks owned by EnerVest, most at low-production wells in remote and rural areas, he said.
Hildreth, vice president of IOGA and president of Hildreth Supply in Spencer, said his company already has reduced its staff from 90 to 70 positions through attrition and reduced its storage tanks from 500 to 450.
“The law, if not changed, will be devastating the way it is written,” he said. “We’ve been a family-owned business for 62 years. We cannot survive as a business if this is not changed.”
Senate Bill 373, the Water Resource Protection Act, was drafted and passed last session in response to the January chemical spill at Freedom Industries, which tainted the water supply for hundreds of thousands of West Virginia residents in and around Charleston.
The act requires the registration and inspection of any tank holding 1,320 gallons of liquid, that is 90 percent aboveground and has been in a fixed location for more than 60 days. State officials have estimated as many as 80,000 above-ground storage tanks meet those requirements. Companies also are required to submit spill plans for those tanks.
The intention of the bill was to identify and regulate storage tanks in “zones of critical concern,” those located near drinking water supplies for communities or which contained toxic chemicals which could endanger a community.
But McKinney said in the Legislature’s haste to find those tanks which were potentially dangerous and unknown, the final bill “misses the mark. It’s a lose-lose for everyone.”
One major issue with the requirement is oil and gas storage tanks are being double regulated. Companies in the oil and gas industry already are required by both state and federal code to register and inspect their storage tanks, as well as have emergency response and cleanup plans in place.
“There was this misconception we were not regulated,” McKinney said. “We are well-regulated. Now we’re being over-regulated.”
McKinney said much of the information already had been filed with the state Department of Environmental Protection, but the tank bill required the development of a new database.
“It’s all information the DEP already has, but not in the form they wanted, so we have to do it all over again,” he said.
Hildreth said there is still confusion over who can conduct the inspections. The law originally required a petroleum engineer to sign off on each tank, which would be a time-consuming and expensive process. McKinney pointed out the state doesn’t have enough engineers to inspect all 80,000 tanks, and the DEP lacks the manpower to make sure those inspections occur.
The new regulations also cast a much wider net than the intent of the original bill. McKinney estimates only about 2 percent of EnerVest’s tanks are located within zones of critical concerns, and those tanks contain only oil or brine. Hildreth said he believes about 2-3 percent of his tanks are located in those zones, but won’t know until the DEP cross references their locations.
“I won’t know for sure until they tell me,” he said.
Hildreth said that brings up another issue: While the requirements remain foggy, the deadlines are set in stone. All of the qualifying storage tanks had to be registered in October, and spill plans are due to the DEP today.
Hildreth said he has been forced to re-allocate his company’s resources and manpower just to meet those deadlines.
McKinley also pointed out while all storage tanks must be in compliance by Jan. 1, the legislative session doesn’t begin until Jan. 14. The DEP has issued some emergency rules and guidance, but has deferred some of the decisions until the Legislature can review the law.
“We calculated it, and I could be fined $3 million a day for not being in compliance,” Hildreth said.
Even without the threat of fines, Hildreth said the effort to meet those requirements has taken a toll financially.
“The damage has already happened and is continuing,” he said.
McKinney said IOGA will continue speaking to legislators and the media, urging the Legislature to either exempt the oil and gas storage tanks from the law or enforcing the rules only for those within zones of critical concern.
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