On May 15, 2018, the U.S. Environmental Protection Agency (EPA) announced a renewed emphasis on Self-Disclosed Violation Policies, as implemented in EPA's New Owner Audit Policy on April 11, 2000. The agency will promote the eDisclosure program, and the additional flexibility available to new owners who self-disclose violations. The Audit Policy includes tailored incentives that encourage new owners to closely examine and self-disclose environmental compliance issues at their recently acquired facilities. As a reminder, this can include site air, water, waste, Spill Prevention Control and Countermeasure (SPCC) and Risk Management Program (RMP) compliance.
EPA's modifications to the Audit Policy conditions expand opportunities for previous noncompliance items to be eligible for self-disclosure incentives for new owners by
- Recognizing the pre-closing due diligence as a one-time event
- Expanding EPA's interpretation of Voluntary Discovery
- Identifying a time period of up to 45 days after closing for self-disclosure
This flexibility allows new owner companies to self-disclose and, most importantly, identify and address noncompliance issues identified in due diligence and initial review of acquired sites. EPA believes new owners have a unique opportunity for a “clean start” with these type of facilities. All new owners that initiate and meet the applicable requirements will receive incentives, including penalty mitigation beyond what the Audit Policy offers and an expanded range of violations that may be eligible for Audit Policy consideration.
The Audit Policy option may be attractive to new owners, as they:
- Were not responsible for the facility when the noncompliance began
- May already be assessing and auditing new facilities to manage and reduce risk
- May have funding available to fix problems, or have budget commitments which are still relatively flexible
Oil & Gas Sector Specifics
On March 29, 2019, EPA finalized a New Owner Clean Air Act Audit Program specifically tailored for the oil and natural gas sector. This program is initially being made available to upstream exploration and production sites. EPA is offering this program to new owners because of the significant non-compliance from excess emissions from vapor control systems at these facilities. EPA has developed a standard audit program agreement template for new owners, which requires new owners to assess storage tank battery vapor control system design as part of their audit process.
If your organization has recently acquired a new facility, Trinity Consultants offers a wide range of environmental compliance services to meet your organization's needs. For immediate assistance with self-disclosure activities at existing or newly acquired sites, please call (800) 229-6655.