Crude Oil

Regulatory Oversight

Federal Oversight

The federal government has nearly exclusive jurisdiction over the transportation of crude oil, from tank car standards to product classification. The U.S. Department of Transportation (USDOT) regulates railroads and hazardous materials transportation, the U.S. Coast Guard (USCG) regulates shipments through coastal waters, and the Environmental Protection Agency (USEPA) regulates petroleum storage. Therefore, the federal government is chiefly responsible for protecting New Yorkers from incidents involving railroads, tankers and barges.

USDOT has the sole regulatory authority for the shipment of commodities by rail (FRA - Federal Railroad Administration) and by pipeline (PHMSA Pipeline and Hazardous Materials Safety Administration). 

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Shipping by vessels is the under the regulatory authority of the USGC.  Under the Oil Pollution Act of 1990, the Coast Guard requires vessel owners to prepare Vessel Response Plans (VRPs) to insure that adequate resources are available to respond to incidents involving pollution and fire.  The VRP has several elements, including identification of the vessel’s designated Oil Spill Response Organization (OSRO), Qualified Individuals (QIs), who can make technical and financial decisions for the ship operators during an incident, and the organizations with knowledge and responsibility for operations related to salvage (i.e., structural stability, emergency towing, external emergency transfer operations, etc).

The Coast Guard reviews and files these response plans for each vessel.  They also inspect vessels for compliance with several federal regulations.  They also have the ability to require vessel owners to participate in both regularly scheduled and unannounced drills to exercise these plans.

Fixed oil storage facilities on the shore are regulated by the Coast Guard in the coastal zone (shore side) and the USEPA in the Inland Areas.  Under the Oil Pollution Act of 1990 (OPA 90), large oil storage facilities have to file and get a Facility Response Plan (FRP) approved by the Coast Guard or EPA, depending on their location. OPA 90 also requires the preparation of a Spill Prevention, Control, and Countermeasure plan (SPCC).  For non-transportation-related oil storage facilities located in the “coastal zone,” the Coast Guard has primary authority for review of the SPCC as well.

The Federal Regulations related to transport by rail are available online.

New York State’s Role

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While the State has little authority over the actual transportation of crude oil, it does have responsibility for the fixed facilities where crude oil is transshipped from rail to ship, or along pipelines. 

The New York State Department of Transportation (NYSDOT) does not have regulatory authority over freight rail, but does play an important role in safety oversight. NYSDOT partners with the Federal Railroad Administration to conduct a Rail Safety Inspection Program in New York State. NYSDOT has inspectors trained in four disciplines (Track & Structures, Motive Power & Equipment, Hazardous Materials and Operating Practices), who regularly conduct inspections of tracks, rail yards, rail cars and other equipment to ensure compliance with federal law. In addition, State law requires railroads to report significant rail incidents including derailments involving hazardous materials to NYSDOT within one hour or face potential penalties. NYSDOT also participates in post-incident investigations.

The New York State Department of Environmental Conservation (DEC) is responsible for licensing Major Oil Storage Facilities (MOSFs) to handle and store various forms of petroleum.  MOSFs have storage capacities greater than 400,000 gallons.  DEC bulk storage regulations establish requirements for storing and handling petroleum in ways to minimize the risk of a release of petroleum to the environment.  As part of this licensing process, facility operators must provide DEC with detailed information about the facility and its operation.  The facilities must comply with both Federal and DEC regulations in their construction and operations, and there are license fees collected which are directed to the New York State Environmental Protection and Spill Compensation Fund (Oil Spill Fund).  The fund is used to respond and remediate oil spills in New York where the responsible party is unknown, unwilling, or unable to do so.

While DEC does not have regulatory authority, it does have the responsibility to respond to spills of crude oil under the NYS Navigation Law.  DEC participates with federal and local response agencies in planning, preparedness and actual response to crude oil incidents. 

Similarly DEC has permitting authority over air emissions from petroleum storage facilities.   DEC implements the Federal Title V program for major sources of air pollution.  Potential emissions of various hydrocarbons, including Hazardous Air Pollutants are frequently found at these sources.  The permits issued to the facilities establish regulatory requirements to minimize emissions so as to not cause an exceedance of air quality standards, and to be protective of public health and the environment.  Such facilities are regulated in the same manner regardless of whether they are managing crude oil or other petroleum products including gasoline, heating oils or ethanol.

The New York State Division of Homeland Security and Emergency Services (DHSES) does not have a regulatory role in the transport of crude oil. However DHSES, under General Municipal Law 204-f, is responsible for reviewing and approving a County’s hazardous materials response plan and, in partnership with federal and local agencies, works to ensure appropriate emergency response plans are in place.