ILLINOIS POLLUTION CONTROL BOARD
December 20, 1990
ROCKFORD DROP FORGE
)
COMPANY,
)
Petitioner
)
v
)
PCB 90—46
(Underground Storage Tank)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
OPINION AND ORDER OF THE BOARD (by M. Nardulli):
This matter comes before the Board on a petition for review
filed on April 3, 1990 by Rockford Drop Forge Company (Rockford)
pursuant to Section 22.l8b(g) of the Environmental Protection Act
(Ill. Rev. Stat. 1989, ch. ill 1/2, par. 1022.18b(g) challenging
the Illinois Environmental Protection Agency’s (Agency) denial of
Rockford’s application for reimbursement from the Underground
Storage Tank Fund for corrective action costs. A hearing was held
September 11, 1990 in Rockford, Illinois at which no members of the
public attended.
FACTS
Rockford owns two parcels of property located at the
intersection of 20th Avenue and 9th Stre~t in Rockford. (Tr. at
29.) Both parcels are located north of ~Oth Avenue. One parcel,
Lot 18 in Block 11, is located on the west side of 9th Street and
the other parcel, which is part of Block 8, is located on the east
side of 9th Street. The parcels are separated by 9th Street, a
public thoroughfare which is owned by the City of Rockford. Lot
18, located west of 9th Street, contained ten underground tanks,
installed between 1925 and 1949, ranging in capacity from 20,500
and 22,000 gallons each. The tanks were registered with the Office
of the State Fire Marshal on February 4, 1986. (Resp. Ex. 1.) The
tanks were used to store fuel oil. Ten to 15 percent of this fuel
was used to fuel forklift trucks and other equipment. The
remaining 85 to 90 percent of the fuel was used to fuel furnaces
located in the forge shop which was, in turn, located on Block 8
on the east side of 9th Street. The fuel oil was pumped through
pipes underneath 9th Street to the forge shop. (Resp. Ex. 1; Tr.
30—31, 50—51.)
In October of 1989, Rockford removed five of the tanks (Tr.
39-40) and in November, the remaining five tanks were removed (Tr.
62). On October 3, 1989, Rockford discovered that one of the tanks
had leaked. On the same day, Rockford notified the Emergency
Services and Disaster Agency (ESDA). (R. 58.) As of August 1,
1990, Rockford had expended approximately $49,000 on corrective
117—65
2
action. (Tr. 44.)
On January 3, 1990, Rockford filed an application for
reimbursement from the Fund for corrective action costs. (R. 56-
75.) On January 12, 1990, the Agency notified Rockford that
reimbursement was denied because the “definition of underground
storage tank does not include tanks used for, storing heating oil
for consumptive use on the premises where stored. (35 Ill. Adm.
Code 731.112 and 40 CFR 280.12.)” (R. 76.) “Since your tank held
fuel oil that was consumed for process heating, your tank is exempt
from the
...
UST regulations according to the definition of UST.”
(R. 76.) On February 19, 1990, Rockford requested reconsideration
of the Agency’s decision. (R. 82.) On March 9, 1990, the Agency
notified Rockford that the Agency’s position had not changed and
that reimbursement was denied. (R. 86—88.) On April 5, 1990,
Rockford filed a petition for review challenging the Agency’s
denial of reimbursement.
DISCUSSION
The sole issue is whether Rockford’s tank falls within the
exclusion to the definition of underground storage tank set froth
at 22.28(e) (1) (A) of the Act (Ill. Rev. Stat. 1989, ch. ill 1/2,
par. 1022.18(e) (1) (A)) and adopted by the Board at 35 Ill. Adm.
Code 731.112. If the Board determines that Rockford’s tank falls
within this exclusion, Rockford is not eligible for reimbursement
from the Fund because its tanks are not “underground storage tanks”
within the meaning of the Act and regulations.
Section 22.18(e) (1) (A) of the Act provided at the time
Rockford filed its application and the Agency rendered Its
determination as follows:
The terms “petroleum” and “underground storage tank”
shall have the meanings ascribed to them in Subtitle I
of the Hazardous and Solid Waste Amendments of 1984
(P.L.98-616), as amended, of the Resource Conservation
and Recovery Act of 1976 RCRA (P.L. 94—580), as
amended. (Ill. Rev. Stat. 1989, ch. 111 1/2, par.
1022.18(e) (1) (A).)
RCRA defines underground storage tank in the following manner:
Sec. 9001. For purposes of the subtitle
—
(1) ‘The term ‘underground storage tank’
means any one or combination of
tanks (including underground pipes
connected thereto) which is used to
contain an accumulation of regulated
substances, and the volume of which
(including the volume of the
underground pipes connected thereto)
117—66
3
os 10 per centrum or more beneath
the surface of the ground. Such
term does not include any
—
(B) tank used for storing heating
oil for consumptive use on the
premises where stored.
Pursuant to Section 9001 of RCRA, the United States Environmental
Protection Agency promulgated rules that copy the definition set
froth in RCRA (40 CFR 280.12). The Board adopted 35 Ill. Adm.
Code 731.112 defining underground storage tanks which is identical
in substance to the federal regulation.
Both parties cite to the preamble to 40 CFR 280 in support of
their interpretations of the statutory and regulatory language.
The terms that require interpretation are “consumptive use” and
“on the premises where stored”. Rockford points to the fact that
the tanks were located on a separate parcel of property from where
the heating oil was used and to the fact that 10
-
15 of the oil
was used to fuel industrial equipment in support of its contention
that its tanks do not fall within the exclusion. The Agency
argues that Rockford owned both parcels of property and that the
exclusion places no restrictions on the use of the heating oil in
support of its position that Rockford’s tanks fall within the
exclusion.
Rockford cites the following portion of the preamble:
Throughout the development of the UST
regulations, where there has been ambiguity in
the terms defining the jurisdiction of the
Subtitle I program, it has been the Agency’s
policy to define the scope of the UST
regulations broadly and interpret the
exclusions relatively narrowly. By taking
this approach, the Agency hoped to avoid
prematurely eliminating from its jurisdiction
tanks that may pose an environmental threat.
(40 CFR 280; 53 Fed. Reg. 37,114a(l)(a).)
The Agency relies on the following portions of the preamble which
explain the meaning of the terms “consumptive use” and “on the
premises where stored”:
(b) Consumptive use means used on the
premises.
Accordingly, this
exclusion applies to tanks at
residential, commercial and
industrial facilities storing
heating oil that is used at the same
site. The heating oil exclusion
117—67
4
does not apply to the storage of
heating oil for resale, marketing or
distribution.
In the preamble to the proposed
rule, EPA stated that ‘consumptive
use’ was not intended to be limited
to only space heating purposes, and
described other uses of heating oil
that would qualify for this
exclusion. This definition has been
modified since the proposed rule to
clarify that tanks holding heating
oil for any on-site use, such as
heating or to power a generator, are
exempt from regulation.
Several contmenters supported this
interpretation of consumptive use.
Heating oil used to process steam,
process heat, electricity and
emergency power were among the
consumptive uses that the coinmenters
thought should be included in the
heating oil exclusion.
Several commenters argued that tanks
storing diesel fuel for use in
emergency generators should be
exempt as tanks storing heating oil.
As explained above, no restrictions
are being placed on the use of the
heating oil under this exclusion,
except that it be used consumptively
on site. (40 CFR 280; 53 Fed. Reg.
37,118—119.)
(C)
On the premises where stored means
tanks located on the same property
where the stored heating oil is
used. Tanks are excluded as long as
the oil is stored anywhere on the
same property. ‘On the premises’ is
not limited to the building where
the heating oil is stored. Thus,
centralized heating units using
heating oil that serve more than one
building on the same property would
be excluded.
In addition, several commentators
provided suggestions that would
result in narrower interpretations
of this exclusion by regulating one
of the following segments: All
117—68
5
residential and commercial tanks;
all tanks at commercial and
government buildings; all
residential buildings of six or more
units; or all tanks above a certain
size. The Agency recognizes the
concerns expressed by these comments
but believes that the statutory
language prevents adoption of such
suggestions. Under the statute, the
exclusion of heating oil tanks is
not limited to certain categories of
heating oil tanks (g.g., only
residential or only tanks less than
1,100 gallons).
Congress did
recognize, however, that heating oil
tanks may require some regulation
and required that EPA study this
universe of exempt tanks and make
recommendations concerning
regulation (section 9009). (40 CFR
280, 53 Fed. Reg. 37,118.)
Rockford’s tanks fall within the explanation of “consumptive
use” given above. There is no dispute that Rockford’s heating oil
was consumed on site and was not sold. The evidence also
establishes that the heating oil was used to process heat and,
therefore, falls within the exclusion. Ronald Ward, plant
engineer and maintenance superintendent for Rockford, testified
that Rockford is in the steel forging business. (Tr. 24.)
Forging consists of heating steel to 240 degrees. (Tr. 25.) The
metal parts are heated in “direct contacts slot forge furnace(s).”
(Tr. 25.) “Direct contacts slot forge
...
means that (the metal
parts are actually inserted into the furnace
...
and have direct
flame contact bringing them up to forging temperature.” (Tr. 25.)
The furnaces used in the forging process are heated with fuel oil
from the tanks. (Tr. 25.)
Given that the oil from Rockford’s tanks was used on site for
process heat and was not stored for resale or distribution, the
only remaining question is whether the use of 10
-
15 of the oil
to fuel forklifts exempts Rockford from the exclusion. The Board
is unpersuaded that the use of a portion of the oil for on-site
use of industrial equipment removes Rockford from the purview of
the exemption. First, the explanation to the federal regulation
discussed above states that “no restrictions are being placed on
the ~g of the heating oil under this exclusion, except that it be
used consumptively on site.” Based upon this statement, it makes
no difference that a portion of the oil was used to fuel
industrial equipment. Secondly, the use of the oil to fuel
industrial equipment was minimal compared to the use of the fuel
for process heat. Therefore, the Board concludes that the heating
117—69
6
oil in Rockford’s tanks was stored for consumptive use within the
meaning of the exclusion.
The Board must now determine whether the fact that the tanks
were located on a separate parcel of property from the forging
furnaces means that they were not used for storing heating oil for
use “on the premises where stored”. In Eureka Co. v.
Environmental Protection Agency, PCB 98—117 at 2 (September 6,
1979), the Board was called upon to interpret the term “on-site”
and relied upon the following RCRA definition of that: “Two or
more pieces of property which are geographically contiguous and
are divided by a public or private right(s)—of—way are considered
a single site.” It is clear that if Rockford’s business was
operated on a single parcel of property, the Board would not be
confronted with the instant argument. It would be incongruous for
one facility or business located on a single parcel of property to
be covered by the exemption and another facility such as Rockford,
that happens to be located on two parcels of property separated by
a public street, to not come within the purview of the exemption
merely on this distinction alone.
We also disagree with
Rockford’s contention that it “could have qualified
...
simply by
placing the ownership of the two parcels in different subsidiary
names.” (Pet. Brief at 5.) No determination has been made by the
Agency or review by the Board which would indicate that such a
maneuver would be a valid basis for avoiding the “heating oil
exclusion.” The Board concludes that heating oil in Rockford’s
tanks was for use “on the premises where stored” within the
meaning of the exemption.
Rockford asks that the Board review this matter “from the
standpoint of statutory interpretation as well as fundamental
fairness.” (Pet. Brief at 4.) Rockford argues that denying
access to the Fund when an applicant has paid the requisite
registration fees is fundamentally unfair. Rockford also alleges
that such a result is particularly unf~airin light of the recent
statutory amendment, which would cover Rockford’s tanks, defining
underground storage tanks as including “heating oil tanks greater
than 1,100 gallons in capacity serving other than residential
units.” (P.A. 86—1050, eff. July 11, 1990.)
The record establishes that Rockford registered its tanks
after consultation with the Office of the State Fire Marshall
(OSFN) and local fire officials responsible for enforcing the OSFM
rules. (Tr. 13-22.) The Agency points out that the OSFM rule
defining underground storage tanks differs from the federal and
Board regulations and that this difference may result in tanks
being registered as USTs and registration fees paid that may not
117—70
7
be USTs for purposes of reimbursement.~ The Agency also notes that
it enforces federal and Board regulations, but not OSFM rules.
Although the parties agree that the recent statutory
amendment to the Act (P.A. 86—1050, eff. July 11, 1990) would
include Rockford’s tank within the definition of “underground
storage tank,” the statute and regulations in effect at the time
pertinent to this matter, which the Board is bound to apply,
exempt Rockford’s tank from the definition of “underground storage
tank.” The Board is sympathetic to the confusion encountered by
Rockford as a result of the dual-implemented UST system as
statutorily created; however, the Board cannot, on this basis,
alter its interpretation of the “heating oil exclusion” as it
existed at the time Rockford applied for reimbursement and the
Agency rendered its determination. While of no consolation to
Rockford, the confusion has been lessened by the recent statutory
amendment (P.A. 86-1050) which now defines underground storage
tanks more consistently with the OSFM rules.2 The Board also notes
that the recent statutory amendment provides further support to
its determination that the statute as it existed at the time
pertinent to this review excluded Rockford’s tanks from the
definition of underground storage tank. (Hession v. Illinois
Department of Public AId, 544 N.E.2d 751, 755 (1989.)
In summary, the Board concludes that Rockford’s tank falls
within the exclusion of Section 22.18(e)(1)(A) of the Act.
Consequently, the tank is not an “underground storage tank” within
the definition set forth in that section so that Rockford cannot
seek reimbursement from the Fund for its corrective action costs.
1 The Agency attached copies of the legislative debates
surrounding the adoption of Public Act 86—1050. (App.
A and B.) These documents were not admitted into
evidence by the hearing officer because the Agency’s
copies were not certified. (Tr. 161—65.) The instant
copies are certified, Rockford has not challenged the
Agency’s use of the documents in its reply brief and,
therefore, the Board has considered the debates in its
review of this matter.
2
Public Act 86-1050 provides added the following language
to Section 22.18(e) (1) (A) of the Act: “except that
‘underground storage tank’ shall include heating oil
tanks greater than 1,100 gallons in capacity serving
other than residential units.” The OSFM rule provides
that underground storage tank does not include any
“tjank of 1,100 gallons or less capacity used
exclusively for storing heating oil for consumptive use
on the premises where stored
... .“
41 Ill. Adm. Code
170.400(jj)
.)
117—7 1
8
This constitutes the Board’s finding of fact and conclusions
of law in this matter.
ORDER
For the reason given above, the Agency’s decision denying
Rockford’s application for reimbursement from the Fund is
affirmed.
IT IS SO ORDERED.
J. Anderson and J. D. Dumelle dissent.
I, Dorothy N. Gunn, Clerk of the Illinois Pollution Control
Board, hereby certify that the above Opinion and Order was adopted
on the ~
day of
______________
,
1990 by a vote of
~
Dorothy M.(~unn, Clerk
Illinois Pollution Control Board
117—72