Response to submissions on proposed regulations on storage tank systems for petroleum products

On April 7, 2007, the proposed Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations were published in the Canada Gazette, Part I. A 60-day period for public comments followed this publication.

The purpose of the proposed regulations is to eliminate contamination of groundwater and soil from storage tank systems containing petroleum products or allied petroleum products that are under federal jurisdiction. The proposed regulations are made under Part 9 of the Canadian Environmental Protection Act, 1999 (CEPA 1999), which defines federal jurisdiction as: departments, boards and agencies of the Government of Canada; federal works and undertakings; Crown corporations, as defined in subsection 83(1) of the Financial Administration Act; Aboriginal land, federal land, persons on that land and other persons in so far as their activities involve that land.

Environment Canada held comprehensive consultations on these proposed regulations between February and September 2003. The process included 25 consultation and information sessions across Canada, 17 of these sessions being held with Aboriginal peoples. Follow-up bilateral sessions were also held on request with various members of the regulated community from September 2003 to April 2006.

By the end of the comment period, a total of 21 sets of comments were received, expressing concerns or suggestions on various parts of the proposed regulations. None of these submissions included a notice of objection requesting that a board of review be established under section 333 of CEPA 1999. Comments were received from 11 departments, agencies or boards of the Government of Canada, three federal works and undertakings and seven others, including one territorial government, one provincial corporation, three industry associations or companies involved in the petroleum or petrochemical industry, one Aboriginal company and one individual.

Several submissions contained both comments and requests for clarification. This document addresses the comments and concerns expressed by stakeholders. The requests for clarification are being handled in a parallel process. In some cases, Environment Canada has already contacted the originator of the questions to provide the requested clarifications. In other cases, clarification will be provided through compliance promotion sessions and materials after publication of the final regulations in Part II of the Canada Gazette.

Comments were received on all parts of the proposed regulations, and on the Regulatory Impact Analysis Statement (RIAS). The most controversial issue for the regulated community appears to be the provision of the proposed regulations requiring that all product transfer areas be designed to contain spills within four years of promulgation of the regulations. Ten submissions, including seven from federal departments and agencies, expressed concerns about this provision. All of these comments included a request that the requirement in the regulations be more explicit as to what exactly will be considered acceptable for the purpose of containing spills. In other words, stakeholders requested that the regulations describe how to achieve this goal. Several of these submissions also requested that the costs-benefits analysis in the RIAS includes the cost for complying with this provision.

Other areas of the proposed regulations which received multiple comments are the spill reporting provisions, the compliance timelines, the provisions for suppliers of products, as well as the challenges for storage tank systems located in remote areas.

Regarding spill reporting, three submissions requested that spills of a volume lower than 100 liters should also be reported. These comments made reference to the fact that during the consultations in 2003, Environment Canada had proposed to require biannual reporting of these small spills. It was asked that such a provision be put back into the final regulations.

Environment Canada received contradicting comments regarding the requirement to remove high-risk storage tank systems within four years after promulgation of the regulations. Three federal departments commented that this timeline could be too short to be feasible, while another federal department commented that, given the risk to the environment, this timeline should be shorter.

Three industry representatives made comments on the proposed requirements for product suppliers. The main concern was that it may be very difficult for delivery agents to know whether a storage tank system is under federal jurisdiction, and consequently the prohibition against delivering product to a storage tank system which does not have an identification number from Environment Canada may be difficult to comply with. There was also some opposition to the provision requiring the suppliers to record the identification number of the storage tank systems on their invoice. This concern was also expressed verbally to Environment Canada during the 60-day period comment, by several industry representatives who decided not to follow up with written comments.

The application of the proposed regulations to storage tank systems in remote areas and/or at unmanned locations was the subject of various comments. At least four federal departments expressed concerns about the feasibility of certain provisions of the proposed regulations in such circumstances. For example, it was mentioned that the monthly visual inspections required for single-walled aboveground piping would not be feasible at unmanned remote locations. These submissions also expressed concerns about the likelihood of a lack of resources (mainly expertise) to conduct all of the work required to be done within a short period of time, i.e. four years after promulgation of the regulations. To address these issues, it was suggested that the final regulations contain provisions allowing the storage tank owners an extension if they can demonstrate that delays are being caused by circumstances beyond their control. It was also suggested to add provisions that would give storage tank owners the possibility of not complying with certain provisions of the regulations if they can suggest an alternative solution acceptable to Environment Canada. On the other side, an Aboriginal company pointed out that northern Canada is a pristine and very fragile environment, where emergency response capacity is not readily available, and it should consequently be protected against environmental risks. They suggested that the provisions in the proposed regulations were not stringent enough to do so.

There was one comment on the application of the proposed regulations to storage tank systems already regulated by other jurisdictions. This submission noted that Environment Canada had been very careful in minimizing potential duplication with provincial/territorial regulations but not the potential duplication with other federal regulations. It was therefore requested to exclude from the scope of application those storage tank systems which are part of a pipeline already regulated by the National Energy Board.

Eight submissions provided comments on the cost-benefits analysis of the RIAS. Almost all of these requested that the costs to storage tank owners for complying with the provision requiring spill containment at transfer areas be included in the analysis. The other comment that was made by several stakeholders relates to the costs of conducting work in northern and remote locations. The RIAS currently considers these costs to be 150% of the costs for the same activities elsewhere in Canada. Two federal departments suggested that 200% would better represent the reality. Finally, there was one submission expressing the view that the benefits section of the RIAS was very conservative and significantly underestimated the real benefits of the proposed regulations.

The table on next page provides a detailed description of the comments received and Environment Canada's response to these comments.

Environment Canada's Response to Comments Received

Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations

1. General Comments
Comments Responses

A number of submissions commented on the wording of the proposed regulations. There were requests that the regulatory text be as precise as possible to avoid misinterpretation from the regulated community. Also, some specific terminology was suggested, such as replacing any reference to "must" in the document with "shall" and replacing "that" or "those" with "the".

Some submissions also pointed out missing words or discrepancies between French and English versions of the proposed regulations.

All comments related to the use of specific words or to other terminology issues were forwarded to the drafting unit of the Department of Justice, which applied government-wide drafting conventions and best practices to develop the final text of the regulations.

Appropriate revisions were made to the text of the Regulations to address typographical errors and discrepancies between official languages.

In addition to suggested changes and the expression of concerns on specific provisions, almost all submissions included questions of clarification on the proposed regulations and its implementation. These questions were discussed directly with the requesters in most cases. Environment Canada is also planning to develop compliance promotion materials which will aim at providing clarification on the regulations and its intent.

 

2. Interpretation
Comments Responses
One submission proposed that these regulations define fuel storage system ownership on First Nations lands. This comment stated that First Nations own these systems and, as such, the government department with responsibility to administer these lands is not responsible for fixtures and buildings on reserve lands and that custodial care and associated costs of these fuel storage systems rests with First Nations.

The term "owner" does not need to be defined in the Regulations, since its meaning is no different from the dictionary definition for this term.

The specific issue raised in the submission goes beyond the scope of these Regulations and should be discussed by the concerned parties.

Another submission suggested that the use of the expression "owner or operator" throughout the Regulations could create some ambiguity with respect to who is ultimately accountable for compliance with the regulations. No changes were made to address this comment. The Regulations identify who is responsible for compliance with the various provisions. In certain cases, the requirements apply to the owner only. In other cases, the requirements apply to the operator only, and in many cases, both the owner and the operator have a responsibility to meet the requirements.
One commenter suggested that "cathodic protection" be defined in section 1 as follows: "a method of reducing or preventing corrosion of a steel tank by making the tank the cathode of an electrochemical cell. Cathodic protection should be designed by a corrosion expert and may be original to the tank or retrofitted to an existing tank before the coming into force of these regulations."

The term "cathodic protection" does not need to be defined since its meaning is no different than the common understanding of the term within the industry.

The Regulations require that cathodic protection be designed by a corrosion expert, which is defined in the Regulations. The definition specifies the qualifications that this corrosion expert must have.

 

3. Application
Comments Responses
One submission suggested that the proposed regulations duplicate existing National Energy Board (NEB) requirements for storage tank systems forming part of pipelines under the National Energy Board Act and the Canada Oil and Gas Operations Act. Based on this, it was requested that the Regulations explicitly exclude NEB-regulated storage tank systems.

Environment Canada conducted an analysis of the relevant NEB regulations. It is believed that when implemented, the NEB regulations reduce the risk of contaminating soil and groundwater due to spills and leaks from storage tank systems, which is the objective of the proposed regulations under CEPA 1999.

Changes have been made to the Regulations in order to exclude storage tank systems that are already federally regulated under the National Energy Board Act or the Canada Oil and Gas Operations Act. Environment Canada is planning to develop an information-sharing Memorandum of Understanding (MOU) with the National Energy Board in order to obtain information on the storage tank systems that are regulated by the NEB and monitor the implementation of the NEB regulations.

One submission expressed concerns about the fact that the proposed regulations do not apply to certain aboveground storage tank systems in which the aggregate capacity of the tanks is 2500 L or less. The submission stated that 2500 litres seems like a large size of aboveground tank to exempt from the regulations as smaller size tanks can also cause significant environmental impacts should they fail. It suggested that the 2500 L threshold be eliminated and that all tank systems be regulated under these regulations.

An outdoor storage tank system that has aboveground tanks in which the aggregate capacity of the tanks is 2500 L or less is exempted from the regulations only if the system is connected to a heating appliance or an emergency generator. This is consistent with the CCME Environmental Code of Practice for Aboveground and Underground Storage Tank Systems Containing Petroleum and Allied Petroleum Products.

The fire and safety aspects of these tank installations are set out in CSA B-139 Installation Code for Oil-Burning Equipment. These tanks, which are generally located in homes or small commercial establishments, have not been previously subject to any environmental control by the federal government. Environment Canada believes that awareness of environmental protection issues related to these tanks should be built through a period of education before including these into a regulatory initiative.

One submission referred to a number of storage tank facilities at airports that are located on Aboriginal lands, stating that the owner of these facilities believe that they are already regulated under provincial storage tank regulations. A concern was raised with potential duplication of work by having to comply with both provincial and federal tank regulations.

The submission suggested that the owner should only have to comply with one regulation and that the federal regulations should supersede the provincial ones.

Whether a provincial regulation applies to a facility should be confirmed with the appropriate provincial authority. In the situation described in the submission, such storage tank systems will be covered by the federal regulations, since they are located on Aboriginal lands.

While it is Environment Canada's intent to minimize duplication in certain requirements, it is recognized that such duplication may exist in certain cases. Technical requirements are fairly consistent from one jurisdiction to another. There could be, however, duplicate reporting requirements. Environment Canada will be open to discussions with the provincial regulator aiming at determining options to streamline administrative processes.

 

4. General Requirements
Comments Responses

A few submissions suggested that the 4-year compliance timelines for the withdrawal and removal of high-risk storage tank systems may not be feasible. This concern was raised for systems located in the North and/or in remote communities, due to limited access and shorter construction windows. These submissions suggested that regulatees be given additional time to withdraw and remove these systems.

On the other hand, one submission stated that because the purpose of these regulations is to reduce the risk of contaminating soil and groundwater due to spills and leaks, 4 years seems like a long time period to allow a high-risk system to continue to be used before it must be removed. The comment stated that Environment Canada originally consulted on allowing up to 2 years for the removal of these tanks from service and suggested that the regulations return to this time period instead of the 4 years found in the proposed regulations.

Environment Canada reiterates the need to address high-risk systems as soon as possible, including in northern and remote locations, where emergency response capacity is more likely to be inadequate and remediation costs higher.

The time period allowed for addressing high-risk tank systems was doubled from 2 to 4 years as a result of consultation with stakeholders who have tank systems in remote locations and is believed to be appropriate. It will also allow for adequate financial planning for those owners managing a large number of storage tank systems.

It should also be stressed that there are other provisions to protect the environment from leaks and spills from these tank systems, including mandatory leak detection testing and immediate withdrawal from service of leaking tank systems.

One submission referred to section 9, which describes the conditions required for existing single-walled underground tanks to be allowed to remain in service. The proposed regulations include such conditions for steel tanks and for reinforced plastic tanks. It was requested that existing underground concrete tanks be also allowed to remain in service if they meet certain conditions. To achieve this goal, the submission suggested the addition of a clause that would permit the continued operation of an existing tank that either does not meet a reference standard or does not have a reference standard, where the owner is able to demonstrate that it meets or exceeds the level of performance and environmental protection intended in the proposed regulations (as warranted by a professional engineer).

Section 4.4 of the Treasury Board Secretariat's Cabinet Directive on Streamlining Regulation requires "Departments and agencies to ... make use of relevant national or international standards ... as a basis for technical regulations ...".

Standards are developed through consensus by committees of affected stakeholders such as representatives from industry, government, academia and users. Development of new standards may be requested. The Cement Association of Canada confirmed that it has no plans to pursue the development of a concrete tank standard for the underground storage of petroleum products. The use of concrete tanks for this purpose is atypical in Canada.

Environment Canada considers that tanks that are not built to standards are at higher risk of releasing product into the environment than tanks that are built to standards.

However, existing single walled tanks that are not leaking will be allowed to stay in service if they meet the criteria set out in the regulations. Once a single walled tank leaks, it must be permanently withdrawn from service and removed. Environment Canada decided to include criteria that must be met for single walled underground tank fabricated of materials other than steel or plastic to remain in service if they are not leaking.

A few submissions stated that flexibility should be built into the regulations, allowing tank owners to be non-compliant with certain provisions of the regulations if special circumstances make it impossible to comply. One submission recommended the inclusion of the following to address the unusual circumstances at remote and unmanned sites: "If the owner or operator cannot comply with any section(s) of the regulation due to the lack of technical or feasible alternatives, the owner may submit to the Minister an application for variance to the regulation to allow for continued operation such that the Minister is satisfied that the activity will be conducted in a manner that provides a level of environmental safety at least equivalent to that provided by compliance with the regulations, and provide documentation in support of the application." Subsection 3(4) of the Regulations provides a course of action to follow if circumstances make it impossible to comply with subsections 3(1), 3(2) or 3(3). Environment Canada does not believe that such provisions are necessary elsewhere in the Regulations. Other issues of this type will be addressed on a case-by-case basis as they arise.
One submission recommended that Environment Canada remove all references to vertically oriented underground tanks. It was stated that if Environment Canada wishes to keep the requirement for vertically oriented tanks, then the tanks should be defined in section 1 as "fully buried tanks with the longitudinal axis installed vertically with the lower tank wall positioned a minimum of 10 metres below grade". The requirements for underground storage tanks depend upon the orientation of the storage tank and not the burial depth. No change was made to the Regulations.
One submission pointed out some ambiguity with regard to withdrawal of tanks from service. Section 3(2) of the proposed regulations references single-walled underground tanks which leak and dictates that they are permanently withdrawn from service and within two years, be removed, in accordance with Section 40. However, Section 4(b) requires, for similar tanks which are voluntarily withdrawn from service, that only piping and other components outside the tank be removed if these tanks are vertically-oriented underground tanks. It was recommended that Section 3(2) be re-worded to be consistent with Section 4(b). The requirements for permanent withdrawal and removal should be the same, whether a tank is voluntarily withdrawn from service or required to do so by regulations. The requested change was made to the Regulations.
One submission pointed out that Subsection 3(1), which requires that a storage tank system that leaks be taken out of service, would require the shutting down of the entire system, which may have serious implications should the tank system be fuelling a power generator which supplies electricity to a community. It was requested that a system that develops a minor leak, in which the release of product can be halted, and the leaking components isolated from the rest of the system, be allowed to remain in service until repaired, if repairs are begun immediately. Environment Canada agrees that a storage tank system can remain in service if the leaking component can be isolated. Appropriate changes were made to the Regulations.
One submission stated that the proposed regulation is not going far enough in protecting the environment by allowing the continued use of single-walled tank systems (tanks and piping). It was stated that such technology should be phased out completely and that the use of double-walled tank systems only should be allowed. This comment added that this is particularly important for remote locations and the far north, where, should a leak occurred, emergency response may be problematic or not occur at all. It was also stated that the fact that the north contains some of Canada's most sensitive ecosystems justifies that a higher level of protection should be accorded. Environment Canada acknowledges that response in remote and northern locations may be more problematic. However, the proposed regulations are deemed to provide an appropriate level of protection, since all single-walled components of a storage tank system will have to be submitted to leak detection tests at a prescribed frequency. In addition, the regulations require that all new underground storage tanks must be double-walled and all new aboveground storage tanks must be double walled or have secondary containment. In all cases, leak detection tests will have to be conducted if a tank or another component of a storage tank system is suspected of leaking.
One submission stated that owners of single-walled underground tanks and/or piping should be allowed to add corrosion protection, leak detection, groundwater monitoring wells or vapour monitoring wells, as appropriate, if their tanks/piping do not have it, instead of being required to remove these tanks and piping within 4 years after promulgation of the regulations. The CEPA Technical Guidelines have been recommending corrosion protection and leak detection for underground storage tanks and piping since 1993. Environment Canada believes that unprotected tanks and piping that do not have leak detection and that have been operating for years are at a high risk of contaminating soil and groundwater. The requested change has not been made.

 

5. Compliance with Requirements
Comments Responses

One submission referred to the numerous technical standards referred to in the various provisions of section 14. It was suggested that referring to specific clauses, sub clauses, articles and sentences of the CCME Code could be a problem if the Code is updated.

Similarly, the submission pointed out that the references to the Underwriters Laboratory of Canada (ULC) standards in subsection 14(2) and 14(3) are the most recent version of that standard as provided for in subsection 14(4). It was suggested that this will require that Environment Canada ensure that it has an internal mechanism to review the contents of standards as they are updated to ensure that these continue to provide the level of environmental protection that Environment Canada is striving to achieve. In the event that updated versions of the standards do not satisfactorily address Environment Canada's concerns, the regulations would need to be amended.

Another submission expressed similar concerns for all external standards referred to in the regulations.

The Regulations incorporate parts of the current version of the CCME Code. When the Code is revised, Environment Canada will consider the revision and amend the Regulations as appropriate.

Environment Canada is a voting member on many of the reference standards committees, and will consider revisions to the Standards and amend the Regulations as appropriate.

Section 15 of the proposed regulations requires the product transfer areas to be designed to contain spills that may occur during the transfer process. Numerous submissions expressed concerns with this provision. At least 10 submissions requested that the requirement be more explicit as to what exactly will be considered acceptable for the purpose of containing spills. This was deemed necessary in order for the regulated community to plan future actions and financial needs to comply with this requirement. Some of these comments also said that the definition of transfer areas was not clear enough to really understand what constitutes a transfer area. This provision of the Regulations is in accordance with the new Cabinet Directive on Streamlining Regulations, which promotes the use of outcome-based requirements as often as possible in technical regulations. Such an approach is particularly relevant for the containment of spills at transfer areas, since there exists a very broad range of situations across Canada with respect to these transfer areas (depending on the geology of the site, the geographic location, the climatic conditions, the presence or absence of staff on site, the frequency of fuel deliveries and the amount of fuel transferred, etc). These situations will lead to various appropriate ways of preventing spilled products from reaching the environment. As only the performance outcome is known, the provision was not changed.
With respect to the same requirement, one submission pointed out that it may be difficult to install a transfer area where double walled tanks have been installed directly on the ground and where there is no existing concrete pad under the tank and no existing containment area. It was suggested that the regulations require only that a person be in constant attendance during the fuel transfer process for double walled tank systems.

Having a person in constant attendance during product transfer may be an important element of spill containment. This could minimize the volume of product spilled and consequently reduce the size or complexity of the product transfer area.

However, constant attendance during fuel transfer has been a standard practice for a number of years, yet spills during product transfer still occur. Containment of spills at transfer areas will be required for all systems.

A few submissions expressed the view that spill containment in the product transfer area should not be required for tanks with low product throughput and/or requiring infrequently filling, such as those associated with emergency electricity generators.

As indicated in the definition of transfer area in the regulations, the spill containment provision will not apply to sites associated with storage tank systems having a capacity less than 2500 L.

Regarding systems with a capacity greater than 2500 L that require infrequent filling, Environment Canada believes that the spill containment provision is necessary, since those systems are often the ones most likely to be found in remote locations, where the surrounding ecosystem may be fragile and where the capacity for emergency response may not be readily available.

Regarding section 15, one submission mentioned that under the Quebec Construction Code, tank systems having a capacity of less than 50 000 L are required to have a shut-off valve and a spill bucket with a capacity of 15 L. It was suggested that this requirement under the Quebec Construction Code should be sufficient for storage tank systems regulated under these regulations. The purpose of these regulations is different than that of the Quebec Construction Code. These regulations seek to reduce the risk of contaminating soil and groundwater due to spills and leaks of petroleum products and allied petroleum products from storage tank systems. No changes were made to the Regulations.

 

6. Leak Detection
Comments Responses

A few submissions commented on the leak detection requirements of the proposed regulations. In one case, it was stated that the leak detection provisions for single-walled underground piping (section 17) may not be suitable for every storage tank system and that the section should include provisions for equivalent tests.

Another submission expressed some major concerns with the provision requiring monthly inspections of aboveground single-walled piping. It was stated that there are numerous unmanned and remote stations in the Arctic where such provisions would be technically impossible. The submission explained that the majority of the unmanned stations are visited on a quarterly basis only for maintenance checks and that these visits are weather dependent and often cannot be done in winter months. As an alternative to monthly visual inspections of single-walled aboveground piping at remote and unmanned sites, it was suggested to give consideration to the installation of remote fuel level sensors on all operating storage tanks at select sites. A second option could be a 24-7 remote monitoring and control system for the tank system.

In light of these comments, important changes have been made to the leak detection section of the Regulations. The final Regulations give the tank owners and operators flexibility in the type of leak detection or monitoring method they want to use. These options include the use of continuous monitoring systems as well as periodic leak detection methods.
One submission referred to Section 19 of the proposed regulations, which pertains to the inspection of the internal bottom of vertical aboveground storage tanks (without secondary containment) every 10 years. It was pointed out that Section 19 also requires that tanks be inspected within two years after the coming into force of the regulations. It was recommended that tanks that have been inspected one, two, five years, etc, before the regulations are enacted should not have to be inspected within two years of coming into force of the regulations. Environment Canada agrees with this comment provided that appropriate documentation can be produced to demonstrate that the inspection was done using the appropriate validated method. Changes were made so that if an appropriate inspection was made during the eight years before coming into force of the Regulations, then another inspection needs to be performed no later than 10 years after that inspection (but not necessarily within two years after the promulgation).
There was a comment regarding the requirement that specific work "be performed by an individual trained in the care and use of the test equipment and its operating procedures using a documented and validated method." The submission inquired about the existence of a third party certification program that would simplify things, otherwise how does one establish whether the individual has the appropriate training in the care and use of the test equipment and its operating procedures using a documented and validated method? It was recommended to add such a notion of third-party certification to the provision.

There is no general certification for individuals that perform leak detection tests, so the regulations were not changed to address this comment.

The owner or operator should ask the individual performing the testing to show proof of training and keep a record of this proof.

 

7. Identification of Storage Tank Systems
Comments Responses
One submission stated that the regulatory timelines for the identification of storage tank systems (two years after the coming into force of the Regulations) may prove difficult to meet for a specific federal department as it is anticipated that this department will not complete its inventory assessment process until March 2010. Under the current Registration of Storage Tank Systems for Petroleum Products and Allied Petroleum Products on Federal Lands and Aboriginal Lands Regulations, which were promulgated in 1997, federal departments are already required to have an inventory of storage tank systems. Given that these regulations have been in place for more than 10 years, and that the new regulations will give another two years to complete the inventory, Environment Canada considers the proposed timelines are appropriate.

Section 24(4) of the proposed regulation requires all owners to maintain the storage tank ID numbers on or near the storage tanks. One submission commented that this may be problematic to maintain the storage tank ID numbers for underground storage tank systems.

Another submission suggested that section 24 of the proposed regulations would benefit from a clear provision addressing responsibilities in the event of the sale or transfer of ownership or operation of a storage tank system.

No changes were made to the regulations. While it is the responsibility of the owner to decide how to display the ID number, Environment Canada would consider the fill pipe an appropriate place to display the ID number. Environment Canada will provide advice to tank owners, as appropriate, after the promulgation of the Regulations.

The regulations state that the owner or operator must update the information on an identified storage tank system and submit the changes to Environment Canada within 60 days of the change. Environment Canada believes this requirement addresses the comment on sale or transfer of operation.

There was a comment regarding the requirement that specific work "be performed by an individual trained in the care and use of the test equipment and its operating procedures using a documented and validated method." The submission inquired about the existence of a third party certification program that would simplify things, otherwise how does one establish whether the individual has the appropriate training in the care and use of the test equipment and its operating procedures using a documented and validated method? It was recommended to add such a notion of third-party certification to the provision. Once the regulations come into force, Environment Canada is committed to conducting compliance promotion sessions to help stakeholders comply with the requirements under these regulations.
A few submissions referred to the information on storage tank systems that will be provided to Environment Canada by tenants on their lands, and requested that the regulation provide landlords with access to information on their tenants' storage tank systems. No changes were made to the Regulations to address this issue. Because of confidentiality issues, Environment Canada will not provide the information received from tank owners to anybody, except if compelled to do so under the Access to Information legislation.
One submission expressed some concerns with the potential delays in getting an identification number from Environment Canada. It was stated that if the regulated community is to acquire an identification number, the government ability to issue the recognized number must be in place (with sufficient lead time to acquire number) before the regulation enters into force OR as part of implementation, the regulation must allow a grace period. Environment Canada has developed a web-based identification system that will be used by the regulated community to provide information on their tank systems. Once all the required information (as described in Schedule 2 of the regulations) is provided, the system will immediately generate an identification number which will be sent to the tank owner.

 

8. Delivery of Petroleum Products or Allied Petroleum Products
Comments Responses

A few submissions expressed concerns related to the requirements for suppliers of petroleum or allied petroleum products in the proposed regulations. Concern was expressed that the suppliers will be responsible and liable to ensure that all tanks that are delivered to are registered according to these regulations. It was mentioned that there are many difficult and critical deliveries into remote areas where these regulations will apply. The supplier and/or contracted transporters will be put into an awkward position of having to make such a critical delivery to a site that does not have a visible identification number at the point of delivery. It was suggested that the identification information be made available to suppliers and/or transport carriers in advance of arrival at the point of delivery.

Another submission suggested that Environment Canada advise tank owners and fuel suppliers that the regulatory requirements for fuel suppliers should be included in a written agreement between the supplier and tank operator.

Any person who delivers product should ensure that a tank system is identified to Environment Canada before a delivery. Environment Canada will facilitate this process by providing an online application to verify the validity of identification numbers. Furthermore, this requirement will not come into force until two years following promulgation of the regulations, which should give tank owners ample time to identify tank systems to Environment Canada.

With respect to a written agreement between the supplier and the tank operator, Environment Canada recognizes that this may be a good option for some tank owners to adopt. However, this will not be a regulatory requirement.

One submission stated that in certain cases, it may be difficult for fuel suppliers to recognize that specific tank systems they are delivering to are under federal jurisdiction and that they need to look for the identification number. Consequently, it was suggested that it should not be necessary for the fuel supplier to verify that the tank system is identified.

Another submission made a similar comment, emphasizing the case of the suppliers of allied petroleum products. Because the regulations will apply everywhere on federal and Aboriginal lands, a routine business transaction between two private sector entities where an allied petroleum substance is being delivered in bulk will be required to comply. It was suggested that it is unlikely that the parties will know about or ask the right conditions - will someone selling/delivering a specified substance, in specified applications know enough to ask about federal land? This scenario is not reasonable to anticipate according to this submission.

A tank system falls under these regulations if it is operated by or belongs to a federal department, board or agency, a crown corporation, a port authority, an airport or a railway, or if it is located on federal lands or on Aboriginal lands.

Environment Canada will provide support to the regulated community (including those persons who deliver product) during compliance promotion sessions and will try to make it as easy as possible for delivery people to know when they should expect to see an Environment Canada identification number. Since these provisions of the regulations will come into force only two years after coming into force of the rest of the regulations, this will give Environment Canada time to work with the persons who deliver petroleum and allied petroleum products on this subject. To address the specific issue of allied petroleum products, Environment Canada will engage such organizations as the Canadian Chemical Producers Association to help inform the regulated community of their responsibilities.

There was also a comment regarding the feasibility of writing the identification number of the storage tank systems on the invoice. The final regulations no longer make reference to an invoice. The delivery persons are required to record the identification number but they can do that in a manner that fits their needs and capabilities.
One submission urged Environment Canada to delete reference to suppliers of allied petroleum products from the regulations, as requirements on the delivery of these products would be unworkable and unnecessary. The suggested change was not made. The purpose of these regulations is to reduce the risk of contaminating soil and groundwater due to spills and leaks of petroleum products and allied petroleum products from storage tank systems.

 

9. Emergency Plan
Comments Responses
One submission requested that records, including the emergency plan, be kept at its area control centres rather than at the nearest place of work as proposed in the regulations. It was mentioned that the addresses could be communicated in addition to the required registration information. An emergency plan for a storage tank system must be located with the tank system or at the nearest place of work in order to enable its implementation in case of an emergency situation.

Two submissions suggested that the proposed requirements for emergency plans would create duplication with other federal requirements such as the Canada Shipping Act or the Environmental Emergencies Regulation developed under CEPA 1999.

It was also mentioned that several tank systems covered by the proposed regulations have environmental management systems which include response plans in the event of petroleum products spills or leaks. Therefore, it was suggested that tank owners should not be required to develop emergency plans as the environmental management systems in place provide adequate protection for the environment.

Section 32 of the final regulations states that "(1) If the owner or operator of a storage tank system has prepared an emergency plan with respect to the system on a voluntary basis or for another government or under an Act of Parliament and the plan meets the requirements of subsections 30(1) and (2), they may use that plan for the purposes of meeting those requirements.

(2) If the plan does not meet all of the requirements of subsections 30(1) and (2), the owner or operator may use the plan if they amend it so that it meets all of those requirements".

Therefore, if the environmental management systems or the emergency plans developed for the purpose of another Act or regulations meet the requirements of subsections 30(1) and (2), they may be used for the purposes of meeting those requirements.

 

10. Installation of Storage Tank System
Comments Responses
The proposed regulations clearly describe the necessary steps that any federal entity will have to follow to have a storage tank system installed. One submission emphasized that there is no requirement for any kind of inspection prior to the system being filled/used for the first time and requested that Environment Canada insist on an inspection of the system prior to the first fill in addition to the subsequent inspections. Additional inspections have merit and can be undertaken but Environment Canada believes that the required installation requirements are appropriate.
One submission suggested that there may be insufficient certified installers to decommission and replace high risk storage tanks within 4 years of coming into force of the regulations. This would be due to considerable market pressures on relatively few certified installers during the compliance period. As a result of this potential shortage of installers, it was suggested that Environment Canada should have a special extension of the timeline in cases where it can be clearly documented that the federal entity started the decommissioning / replacement process immediately following the coming into force of the regulations, but is not able to engage a certified installer.

These concerns, though they may prove to be valid, are only potential issues at this stage. The provinces and territories, responsible for certifying installers, are aware of the federal regulations.

The timeframes in the regulations are believed to be appropriate and have not been changed.

Two submissions requested that the requirement for supervision by an engineer be met by a person in the ENG classification within the Government of Canada. It was explained that federal departments employ engineering staff who have met all requirements of becoming a professional engineer but have not registered with a provincial or territorial association since it is not a requirement of employment. Military Engineers or civilians employed in engineering positions have university degrees in engineering or applied science and may have up to 30 years experience in the engineering field. Consequently it was proposed that 'engineer' replace 'professional engineer' in the regulations.

Two submissions also provided comments on the type of engineers that should be considered acceptable for the purpose of these regulations. In one case, it was mentioned that certain departments have experienced problems with storage tank systems designed by third party professional engineers who were not experienced with local conditions, especially Arctic conditions. It was recommended that the regulations include in its definition of 'engineer' that 'engineers be trained and experienced in the design and installations of storage tank systems in the geographical area'. In the other case, the submission requested that the "acceptable" engineers should have experience with storage tank systems.

No changes have been made to the Regulations.

Through an Act of the provincial or territorial government, provincial and territorial associations of professional engineers have been established to regulate the practice of engineering in Canada. Under these Acts, certain actions and practices are set aside for the exclusive practice by professional engineers.

The primary duty of the professional associations is to protect the public interest. All members of an association are bound by a Code of Ethics which outlines the principles of ethical conduct. P.Engs can only undertake assignments if qualified by training or experience. If the Code of Ethics has been breached, or a member is not practising competently, the member will be sanctioned. Therefore, the type of engineers does not need to be defined in the regulations.

P.Eng. is a professional designation, allowing the practice of engineering in the province or territory where it was granted. Only a P.Eng. or those practicing under the direct supervision of a P.Eng. have a legal right to practice engineering. Employees of the Government of Canada in a position that has an ENG classification have not necessarily met these requirements. Employing a professional engineer to practise engineering is not only a legal requirement but provides recourse if the interests of the public are not uppermost.

One submission mentioned that there could be difficulties meeting the requirements under which certified as-built drawings from a professional engineer are prepared prior to the first transfer of product, in remote locations due to serious cost and time restrictions related to access. It was suggested that Environment Canada allow the first fuel transfer to proceed provided that the as-built drawings are certified within a year of installation. The requirements for as-built drawings are minimal. As-built drawings must be done as the tank is installed, which is normal engineering practice. The proposed requirement is believed to be appropriate.
There was one comment regarding the use of the word "supervise" in section 29 of the proposed regulations, which requires that, in provinces that do not have provincially approved fuel tank installers, a professional engineer must "supervise" the installation. For clarity purposes, it was suggested to require that an engineer provide field review services of the tank installation and provide a letter giving assurance that the installation of the tank and associated piping was in accordance with the requirements of this standard and all reference standards. Since Professional Engineers are bound by a Code of Ethics, they will be required to use their professional judgment to determine what they consider adequate supervision.

 

11. Operation and Maintenance
Comments Responses
No comments

 

12. Release Report
Comments Responses
For greater clarity, one comment suggested that the section heading "Reporting", which precedes section 36, should be changed to "Reporting Spills", as one would not intuitively know that this section applies to reporting spills until one reads some of the detail under the section. The section heading of the final regulations reads: "Release Report". This terminology is consistent with the terminology of the Canadian Environmental Protection Act, 1999, under which these regulations are developed.

Two submissions provided comments on the potential of the spill reporting provisions for creating duplicating and cumbersome reporting processes in addition to those already in place across Canada.

The first one recommended that the federal regulations enable the reporting of spills through the existing federal-provincial spill reporting mechanism in order to avoid the need to report each spill more than once.

The second one recommended that the requirements for spill reporting under the proposed regulation be identical to the existing reporting requirements contained in CEPA 1999 and its other regulations. It was emphasized that members of the regulated community have already developed spill reporting procedures that are in compliance with these regulations and that it would be more difficult to keep track if there were different reporting requirements for spills for storage tank systems than for other hazardous materials spills which are already well addressed under CEPA 1999.

Environment Canada's intent is not to create another reporting mechanism for these regulations. The regulations will use existing reporting procedures for spill notification.

The regulations also require a follow-up written report, which may not be required under all existing reporting mechanisms. Such a situation will be no different than the situation of other regulations, such as the Environmental Emergency Regulations.

One submission referred to the fact that notification of a leak or spill less than 100 L is not required, noting that this differs from the spill reporting requirements that were consulted on in 2003 when it was proposed that all leaks and spills be reported, with leaks or spills of 100 L or more being reported to the existing provincial/territorial reporting mechanism and those spills of less than 100 L being reported directly to Environment Canada twice a year. The stated purpose of these regulations being to reduce the risk of contaminating soil and groundwater due to spills and leaks, it was questioned how Environment Canada would assess this without all the leak and spill information. It was therefore requested that Environment Canada put back in the regulations the requirement for spill reporting twice a year with no minimum threshold so that the effectiveness of the technical requirements imposed by these regulations may be measured.

Environment Canada recognizes that this information would be useful in assessing the success of these regulations.

Environment Canada is committed to obtain good spill information and will work with the regulated community to obtain relevant information through a combination of regulatory provisions and voluntary measures.

The final regulations will require verbal notification of all spills and a follow-up written report for spills over 100 L.

One submission requested clarification on the reporting requirements, as these requirements do not clearly indicate who must report the spill. It was suggested that more specific information be included in the regulations. No changes were made to the regulations. These provisions refer to Section 212 of the Canadian Environmental Protection Act, 1999 which states that a spill must be reported by "... any person who (a) owns or has the charge, management or control of the substance immediately before its release ... or (b) causes or contributes to the release ..."

 

13. Withdrawal From Service
Comments Responses
One submission made comments on the terminology used in the section dealing with "withdrawal from service" and "permanent withdrawal from service". It was mentioned that the terms 'deactivation' and 'abandonment' are currently used in legislation, regulations and standards for the oil and gas pipeline industry. Further, the use of these terms could cause confusion as to when an assessment under the Canadian Environmental Assessment Act may be triggered. It was therefore suggested that the terms 'deactivation' and 'abandonment' be used in the storage tanks regulations. The proposed Regulations are based on the CCME Environmental Code of Practice for Aboveground and Underground Storage Tank Systems Containing Petroleum and Allied Petroleum Products. Environment Canada uses the same terms as are used in the Code of Practice. It is possible that the same terms will have different meanings within the upstream and downstream sides of the oil and gas industry.

 

14. Temporary Withdrawal from Service
Comments Responses
One submission requested additional guidance in the provision of the regulations requiring internal inspection of temporarily withdrawn field-erected aboveground storage tanks. Internal inspection has been clarified in the regulations. The requirement for field erected aboveground storage tanks is now a floor inspection following a prescribed method.

 

15. Permanent Withdrawal from Service
Comments Responses
No comments

 

16. Removal of Storage Tank System Removal
Comments Responses
One submission expressed concerns regarding the provision allowing vertically oriented underground tanks to remain in place. It was recommended that allowing tanks to remain in place should be based on risk. For example, confirmation of free product underlying the tank should negate the ability to leave the tank in place. It was suggested that a clause be added to the regulation to address this issue. The commenter also expressed the view that shallow buried tanks should be removed regardless of their orientation unless the structural integrity of adjacent structures will be compromised.

The intent of allowing vertically oriented underground tanks to remain in place is due to a number of considerations including costs, risk, rarity, potential environmental impact, and other factors. There is a clause in the regulations that will allow such a storage tank to be abandoned in place. Not only would the cost of removal be high but removal of these large capacity underground storage tanks may cause more damage to the environment than allowing them to be abandoned in place.

Section 44(3)(c) of the final regulations does lay out the requirements for permanent withdrawal from service, which includes that the withdrawal is done in a way such that there will be no immediate or long-term harmful effect on the environment and it will not constitute a danger to human life of health.

 

17. Record Keeping
Comments Responses
One submission asked whether Environment Canada would consider alternatives to the proposed requirement to keep records at the nearest workplace, to accommodate remote locations. This organization explained that at its unstaffed sites, the tanks are maintained by various maintenance staff reporting to different locations. It was suggested that it would be more appropriate for these records to be kept at each location where the maintenance staff report.

The wording of the requirement to keep records at the nearest workplace is meant to accommodate unattended sites where structures would have to be built solely for the purpose of housing records.

At least one complete copy of the required records should be kept at a location that will be identified to Environment Canada.

One submission requested that all records be allowed to be kept at a place of work that may not be the nearest place of work as proposed in the regulations (the rationale being that the nearest place of work could be occupied by operations personnel with no background nor responsibility with respect to those records). It was mentioned that the addresses could be communicated in addition to the required registration information.

The final regulations still require that records be kept at the nearest place of work. It is implicit that the nearest place of work refers to the work that is associated with the work that is done at the unattended site.

The civic address of the location where the records are kept will have to be provided as part of the information required when a tank owner identifies a storage tank system with Environment Canada.

 

18. Coming Into Force
Comments Responses
No comments

 

19. Schedule 1 : Allied Petroleum Products
Comments Responses
One submission pointed out that a number of Canadian General Standards Board (CGSB) standards for allied petroleum products (e.g. Boiled Linseed Oil, Ethylene Glycol, Uninhibited, etc.) referenced in the proposed regulation have been withdrawn or superseded by the CGSB. It was requested to reference the most current standards. Appropriate changes have been made to the regulations to reference the most current standards and to remove those standards that are no longer in existence.

One submission pointed out that some of the standards that are referenced in the regulations are not readily available and are not free of costs. It was suggested that all standards that are part of the regulations should be free and readily available to the regulated community.

The submission also expressed concerns about the fact that to acquire a CGSB standard, one is required to purchase a Government of Canada standards from a foreign (USA) company. It was suggested that Canadian government standards should be available to Canadians inside Canada instead of being required to spend funds outside Canada.

All the referenced Canadian standards are readily available in Canada through the appropriate standards organizations. The purchase of standards is not necessary, nor recommended, to comply with the regulations. The requirement is only for the equipment to bear a certification mark certifying conformance with a standard or for owners to know if their stored product falls within the application of these regulations.

Revenue generated through the sale of standards and other publications of the standards organizations, supports the work of standards development organizations which are not-for-profit.

One submission questioned why "oxygenated gasoline" is identified as an allied petroleum product in the Regulations. It was suggested that oxygenated gasoline would meet the definition of petroleum product from the definition in section 1 of the Regulations and that listing this product in as an allied petroleum product in Schedule 1 creates a duplication. It was recommended that Environment Canada review the need to list oxygenated gasoline in Schedule 1 and delete, as required. "Oxygenated gasoline" is a mixture of conventional gasoline and one or more combustible liquids which contain oxygen ("oxygenates"). At present, ethanol is the most common oxygenate in the Canada. These mixtures can be less than 70% hydrocarbons. In such case, oxygenated gasoline would not fall under the definition of petroleum product. No changes were made to the Regulations.

 

20. Schedule 2 : Information Required to Identify a Storage Tank System
Comments Responses
No comments

 

21. Regulatory Impact Analysis Statement (RIAS)
Comments Responses

One submission included several comments on the cost-benefit analysis, stating that Environment Canada did a good job calculating the estimated costs for affected parties to comply with the regulation, but that the scope of the benefits analysis was too limited. It was suggested to consider such avoided costs as health impacts, accidents, loss of product, loss of land use and emergency response.

The submission pointed out that there have been a number of studies published on the subject of costs associated with cleaning up after a leaking storage tank fails. Two of the most commonly used and rigorous methods for calculating the probable costs for cleanup are the Remediation Technology Costs Compendium - year 2000, published by the U.S. Environmental Protection Agency and Retroactive Liability and Future Risk: The Optimal Regulation of Underground Storage Tanks by Boyd and Kunreuther. It was suggested that using Environment Canada's estimated number of tank systems that are currently leaking (3,073) to feed these costing matrices would result in estimated benefits of $1.537 billion and $1.107 billion, respectively. It was recommended that Environment Canada redo the benefits analysis to reflect the true costs of allowing leaking tanks to continue to operate.

As noted in the RIAS, the dollar amount of benefits provided in the benefit section is a conservative estimate. This is mainly due to data and information limitations.

Additional information obtained from departmental technical experts allowed the inclusion of avoided groundwater and soil contamination resulting from the future removal and disposal of single-walled underground storage tank systems installed after 1995. With other adjustments, the benefit has increased from $556 million to about $757 million (discounted $ 2004) over 12 years.

Even with the inclusion of the new element the total dollar amount of benefits is still a conservative estimate given that non-monetized benefits are believed to be significant.

Environment Canada contracted Science Applications International Corporation (SAIC) to estimate the average cost of remediating a contaminated site by estimating the average mass of soil contaminated per leaking tank, the average volume of groundwater contaminated per leaking tank, and the unit costs of remediating contaminated soil and groundwater. The remediation technology and cost information was compiled from a number of sources, one of which was: "Remediation Technology Costs Compendium - year 2000", published by the U.S. Environmental Protection Agency. SAIC had also consulted the study "Retroactive Liability and Future Risk: The Optimal Regulation of Underground Storage Tanks" by Boyd and Kunreuther when completing the report.

Another submission commented on the uncertainty of the cost-benefit analysis. More specifically, it was mentioned that the net benefit calculation in the RIAS was based on modelling and assumptions. It was suggested that the assumptions made during the uncertainty testing may be flawed. It was assumed that the number of tanks and unit costs affected by this proposed regulation was uncertain. In the modeling, this variable was allowed to fluctuate between ± 5-10%. The submission concluded that this may not be a great enough range. In the analysis, tank inventory, unit cost, and other key variables were allowed to fluctuate. However, the range in which they were allowed to fluctuate depends on the uncertainty around the variable. For variables whose values were reasonably estimated such as unit costs and N60 tank inventory, a range of ± 10% was assumed. For other variables, a wider range (± 20% - 30%) was used to account for the considerable uncertainty present. Such variables are tank inventories of FWU and Crown corporations, etc.

One submission suggested that the "incremental benefits" pertaining to "avoided ESA costs" should be reduced to a more realistic amount. It stated that although the proposed regulations may result in lower remedial costs associated with leaking storage tank systems, environmental site assessments will still be required as a condition of sale or transaction (however likely at a reduced level of effort).

The same submission also provided comments on the "avoidance" on the "loss of recreation value of contaminated sites". It stated that although a valid statement, it may not be fully accurate. In larger developed areas, the parks and green spaces are sometimes found at former Brownfield sites since these sites are considered "affordable" to redevelop as parkland. Sites in larger developed areas that are not contaminated would likely be redeveloped for commercial or industrial purposes and would be considered cost-prohibitive for the establishment of green spaces.

While environment site assessments will still be required as a condition of sale or transaction, ESA would not be required as a condition of remediation as leaks and hence remediation would be avoided by the regulations

It is possible that remediated sites are reintroduced as a reproductive resource. Such reintroduction is often stimulated by strong demand for land. Depending on the characteristics of the land, its current and potential uses, and the degree of contamination, the value (economic, recreational, etc.) of the land could be lost once a contamination has occurred but could be restored once it is remediated.

Several submissions stated that the cost analysis should include the costs related to the provision requiring that product transfer areas be designed to contain spills. Environment Canada had not included those costs in the RIAS, based on the assumption that federal departments and agencies already had an obligation to do so under the National Fire Code of Canada. These submissions argued that this assumption was flawed and requested Environment Canada to recognize these additional costs in the RIAS.

In accordance with Treasury Board Secretariat's Policy on Fire Protection, Investigation and Reporting (Chapters 2 to 5), federal departments and agencies should conform to the National Fire Code of Canada.

Environment Canada recognizes that there is no legal obligation to do so and consequently, designing product transfer areas to contain spills could be considered as creating an additional financial burden on the regulated community in order to comply with the regulations.

These costs were estimated to represent a total of about $3 million dollars (discounted) and were included in the final RIAS.

A large number of submissions provided specific comments on the cost analysis:

  • some federal departments/agencies stated that the cost analysis did not take into consideration all of their storage tank systems;
  • one submission stated that the cost to system owners to bring into compliance indoor tanks without secondary containment equal to1 x 10-6 cm/s maximum hydraulic conductivity were never considered in the cost analysis. It also noted that these systems may not even be inventoried since they are indoor tanks and were never captured under the current Regulations;
  • one submission stated that the cost analysis did not consider the cost to owners who have tank systems that are currently temporarily out of service for longer than 2 years;
  • one submission mentioned that because the requirements around monthly visual inspections of single-walled aboveground tanks and piping may not be feasible in remote and unmanned locations, all of these single-walled components would have to be replaced by double-walled components and that this additional cost (estimated to be around $50 million for one federal department only) was not considered in the RIAS;
  • one federal department stated that it owns a large number of storage tank systems north of 60 and that the costs should reflect the fact that doing business in the north is more costly than in the rest of the country;
  • one submission mentioned that the RIAS estimate does not include costs associated with necessary training; internal compliance promotion and audits; increased operations and maintenance costs; and increased inspections. It was stated that these costs are directly linked to the proposed regulations and must be factored in to the RIAS.

The information on storage tanks that was used by Environment Canada for the RIAS was obtained over the course of a few years directly from the federal departments and agencies, as well as other members of the regulated community. When comments were received from specific departments, Environment Canada invited them to submit updated information when deemed appropriate and used the updated information for the final version of the RIAS.

Costs related to the activities described in the comments received have been included in the final RIAS when appropriate.

The RIAS did not differentiate between in-service and out-of-service tank systems. Therefore, costs for any out-of-service tank systems had already been included in the RIAS.

Monthly visual inspections are no longer mandatory in the final regulations, since the regulations provide for alternative options (other leak detection or monitoring methods). Therefore, there was no need to add in the RIAS the costs required to change all single-walled components to double-walled components.

The information used to calculate costs in the RIAS was extracted from the complete tank inventory supplied by departments. This detailed information included location of tank systems and enabled Environment Canada to determine if a given tank system is located north of 60. As such, the costs to address departments' tank systems north of 60 was taken into account and scaled.

The requirement for additional training, internal compliance promotion and audits, and increased inspections is not considered an additional cost directly required for compliance with the regulations. All federal departments should already be conducting these activities as part of their commitment to fulfill their existing responsibilities under the following: the Code of Environmental Stewardship adopted by the Treasury Board Secretariat in 1992; the Federal Registration of Storage Tank Systems for Petroleum Products and Allied Petroleum Products on Federal Lands and Aboriginal Lands Regulations that came into effect in 1997; and the National Fire Code of Canada. Therefore, these costs were not included in the RIAS.

While the regulations require the affected parties to submit a written report, the cost associated with reporting is expected to be minimal.

One submission took offence of the following statement in the RIAS, on page 846 of the Canada Gazette notice:

"...as stakeholders have been consulted on the draft proposed Regulations through formal and informal meetings over a considerable period of time, it is reasonable to expect stakeholders to have some preliminary compliance plan to respond to these proposed Regulations. This preliminary planning would reduce the time required to prepare any submissions to secure funding for the purposes of complying with the proposed Regulations".

The submission stated that: "...expending resources and incurring costs on proposed regulations is not a practice readily accepted in the regulated community unless the risks are extraordinarily high and that actions will be taken when certainty is available. As such, the regulated community must be given sufficient time to comply with the final requirements when known. Further, not all affected stakeholders were privy to the advanced consultation; and for equity considerations, they should be given sufficient time to develop compliance mechanisms and implement...".

Environment Canada has engaged discussions with stakeholders since 2003 on these proposed regulations and expects them to be aware of and prepared for the upcoming coming into force of the regulations. The intent document, on which the stakeholder consultations were based, was developed from the CCME Code of Practice which represented the best industry practice in 2003. Revisions were made in response to comments received.

It is recognized that some members of the regulated community may not have been as involved as others in the consultation process and Environment Canada is committed to conducting compliance promotion sessions and training in order to reach out to as many stakeholders as possible following the promulgation of the regulations.

One submission suggested that Table 3 - column 2-3 of the RIAS be renamed First Nations (instead of INAC, Aboriginal and Federal Lands). Changes were made to the final version of the RIAS. The table now refers to "Aboriginal and Federal Lands" (no reference to INAC nor to First Nations).
One submission requested that Environment Canada undertake a new Regulatory Impact Analysis Statement (RIAS) in the future. This request was based on the fact that the commenter's organization is currently conducting a fuel storage inventory assessment and should be able to provide Environment Canada with a more accurate inventory following March 2010. Once this information is submitted, it is believed that the costs will be higher than estimated in the RIAS. The RIAS reflects the situation as known at the time of promulgation of the regulations. The uncertainty model that was built into the cost-benefit analysis takes into account situations such as the one described in this submission.
One submission suggested that a leveraging fund similar to that established for the Federal Contaminated Sites Action Plan be made available to those parties affected by the proposed regulations. This is not a regulatory issue and will not be addressed in the regulations.
A few submissions mentioned that costs of storage tank replacement and other work in remote areas are 50% higher than standard costs. In northern areas the costs would be 100% higher. It was requested to modify the cost analysis consequently.

Environment Canada reviewed costs for projects in northern areas and agrees with the figure of 100% higher in northern areas. Changes were made to the RIAS.

Environment Canada also reviewed costs for projects in remote areas and is of the view that a scale factor of 25% was reasonably assumed as most of these remote areas have road access. Additionally, as it is assumed in the RIAS that only 10% of the disposal, repair, replacement, site assessment and remediation costs associated with tank systems belonging to federal departments, boards and agencies, Crown corporations and Aboriginal lands are incurred in remote locations, changes in the scale factor would only slightly affect the total cost of the regulated community.

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