Canada Gazette

The purpose of the proposed Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations (hereinafter referred to as the "proposed 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. In addition, the proposed Regulations will help to reduce a number of toxic substances (see footnote 1) from entering the environment, including 1,2-dichloroethane, 3,3'-dichlorobenzidine, benzene, ethylene oxide, and polycyclic aromatic hydrocarbons that are found in petroleum products and allied petroleum products.

Petroleum products and allied petroleum products are defined in the proposed Regulations and include products such as used oil, gasoline, diesel, heating oil, and lubricating oil. The proposed Regulations would apply to storage tank systems owned or operated by federal departments, boards, agencies and Crown corporations; to storage tank systems operated in connection with port authorities set out in the Schedule to the Canada Marine Act, railways and airports; and to storage tank systems located on federal and Aboriginal lands. The proposed Regulations would also apply to suppliers of petroleum products or allied petroleum products to these storage tank systems. These proposed Regulations would be made under Part 9 of the Canadian Environmental Protection Act, 1999 (CEPA 1999).

The existing Federal Registration of Storage Tank Systems for Petroleum Products and Allied Petroleum Products on Federal Lands and Aboriginal Lands Regulations (hereinafter referred to as the "existing Regulations"), which came into effect on August 1, 1997, would be repealed and replaced by the proposed Regulations.

The proposed Regulations, except paragraphs 25(a) and (b), respecting suppliers of petroleum products and allied petroleum products, would come into force on the date of their registration by the Clerk of the Privy Council.

There are 341 affected parties covered in the cost and benefit analysis. The cost of the proposed Regulations is estimated to be around $187 million (discounted 2004 dollars) and the resulting benefit is estimated to be about $556 million (discounted 2004 dollars) over 12 years. Hence, these proposed Regulations are expected to generate a net benefit of approximately $369 million (discounted 2004 dollars) over 12 years.

Petroleum products and allied petroleum products (hereinafter collectively referred to as "petroleum products") are ubiquitous in our society. Petroleum products are used to fulfill basic needs, such as the provision of heat and transportation, and also to pursue recreational activities. The greatest volume of petroleum products is consumed by the transportation sector as fuel for cars, trucks, buses, snowmobiles, diesel locomotives, aircraft, boats, ferries and ships. A lesser, but significant, volume is used as fuel for furnaces, boilers and generators to produce heat, power and emergency power. Tanks store petroleum products as diverse as gasoline, diesel, heating oil, aviation fuels, kerosene, naphtha, lubricating oils, thinners, solvents and printing inks. Storage tank systems can be based on a single tank just large enough to provide heating oil to an individual dwelling, to a multiple large-capacity tank system used for fleet fuelling, product distribution or fuel supply. The volume stored in a single tank system can vary from 230 litres to more than 75 million litres.

Spills and leaks of petroleum products from storage tank systems are of significance to all Canadians because of the environmental and human health damage they can cause. Statistically, releases of petroleum products from storage tank systems are responsible for approximately 66% of the soil contamination on contaminated sites on federal and Aboriginal lands in Canada. (see footnote 2) High concentrations of petroleum products in soil can reduce agricultural yield and the economic value of the contaminated site could be lost as a result of the contamination. Petroleum products can also contaminate drinking water supplies, making them unfit for human consumption. Furthermore, tanks inappropriately disposed of can re-enter the market and cause site contamination or be used for inappropriate purposes, such as bus shelters for children or watering of cattle.

The impacts of groundwater and soil contamination on human health are very complex and are dependant on factors such as concentration, length of exposure, route of exposure (ingestion, inhalation or contact with skin) and type of petroleum product. However, ingesting small amounts of petroleum products in contaminated groundwater or soil may cause vomiting, diarrhea, swelling of the stomach, stomach cramps, coughing, drowsiness, restlessness, irritability, and unconsciousness. Also, if petroleum products are ingested repeatedly or in higher concentrations, more serious health impacts may result, such as coma, convulsions, and even death.

Inhaling fuel vapor from soil or water contaminated with petroleum products, for periods as short as one hour, may cause nausea, an increase in blood pressure and irritation to the eyes. Inhaling for longer periods of time may damage the kidneys and lower the blood's ability to clot. Fuel vapor intake can also affect the nervous system. Some other effects that have been noted include headaches, light-headedness, anorexia, poor coordination, and difficulty concentrating.

When soil or water contaminated with petroleum products gets on the skin for short periods, it may cause irritation; in higher concentrations, it may cause blisters and the skin may peel. Constant skin contact may also damage the kidneys, and there is evidence that repeated contact with substances such as benzene can cause skin and liver cancer.

The implementation of the proposed Regulations will help to reduce risk of contaminating groundwater and soil, therefore contributing to the protection of human health and the environment. The following two recent cases of site contamination are presented to illustrate broadly the potential impacts of leaking storage tanks that could be avoided once the proposed Regulations are fully in effect. In both cases, site contamination was due to the leaking of gasoline from an underground storage tank. Note that these two cases are for illustrative purposes only, and that the actual impacts of the proposed Regulations could vary depending on the type of petroleum products, the construction of the tank system, the receiving environment, the leaking period, etc. (see below for more details on the monetization of expected impacts and the assumptions). These two events occurred recently in Saskatchewan, and the affected parties are Aboriginal communities.

In the first case, the odour and taste of gasoline in the drinking water led to the discovery of a leaking underground storage tank. More specifically, gasoline was leaked into the freshwater aquifer from which the Poundmaker First Nation drew their water. The contamination was found to be extensive, making the water unsafe for consumption. A new pipeline was constructed to draw clean water from a nearby community. The site was remediated and will be monitored for the next five to ten years to assess if the level of contamination decreases to a level that is found to be safe for consumption. The basic costs for this site, which includes the remediation cost, legal fee, water servicing fee and risk management cost, are estimated to be in excess of $1 million (C$ 2002).

In the second case, while water and sewer servicing at Lac La Ronge First Nation, workers accidentally started a flash fire when excavating soil that was, unknown to them, contaminated with gasoline. The backhoe excavating the site struck a buried rock, and the resulting sparks ignited the fuel leading to the fire. Subsequently, it was discovered that an underground storage tank located at a nearby gas station was leaking gasoline in volumes that had saturated the soil in the area. Though there were no injuries from this accident, the required remediation of the contamination resulted in a one-year delay in delivering clean water to that community. The quality of life during that period was affected. The basic costs for this site, which include only remediation and administration costs, are estimated to be in excess of $850,000 (C$ 2003).

The existing Regulations apply to owners of underground storage tank (UST) systems that contain petroleum products and to outside, above-ground storage tank (AST) systems having a total capacity of more than 4 000 litres that contain petroleum products which are located on federal and Aboriginal lands.

The implementation of the existing Regulations enabled Environment Canada to develop an inventory of storage tank systems on federal and Aboriginal lands. This inventory was then used to assist risk managers to identify environmental and health risks associated with the management of storage tank systems and to identify measures to reduce those risks. Specifically, under the existing Regulations, owners of storage tank systems are required to register their tank systems with the federal department that administers the federal or Aboriginal lands on which the storage tank system is located. In addition, the owners are required to provide information on the installation, such as type of tank, leak detection and year of installation. The owners are also required to self assess their storage tank systems by using the Technical Guidelines for Underground Storage Tank Systems Containing Petroleum Products and Allied Petroleum Products and the Technical Guidelines for Aboveground Storage Tank Systems Containing Petroleum Products (hereinafter collectively referred to as "Technical Guidelines") developed under CEPA 1988. The existing Regulations do not require compliance with those Technical Guidelines that take into account impacts on the environment and human health from spills or leaks of petroleum products or allied petroleum products. These spills and leaks can contaminate groundwater and soil, which can result in negative impacts on the environment and human health. These negative impacts can be greater, depending on the recipient environment and the quantity and type of petroleum products and allied petroleum products that were spilled or leaked. Consequently, preventive measures are required to protect the environment and human health.

Leaking storage tank systems would be required to be temporarily withdrawn from service, repaired, and be leak free before being returned to service. In the event of unusual circumstances that make it impossible to immediately remove a leaking tank from service, special measures outlined in the proposed Regulations must be taken. More stringent requirements would apply to single-walled underground tanks and piping. For that matter, leaking single-walled underground tanks and piping must be permanently withdrawn from service and removed within four years after the day on which the proposed Regulations come into force and the day on which the owner or operator becomes aware of the leak.

The following storage tank systems are considered by Environment Canada to be at high risk for contaminating soil and groundwater, and therefore would have to be permanently withdrawn from service and removed within four years of the coming into force of the proposed Regulations:

(a) storage tank systems with tanks designed to be installed aboveground but were installed below grade or in secondary containment surrounded by fill;

(b) storage tank systems with tanks designed to be installed underground but were installed above grade or in unfilled secondary containment;

(d) single-walled underground storage tank systems that do not have pre-existing corrosion protection and leak detection; and

(e) single-walled underground piping that does not have corrosion protection and leak detection.

The owner or operator of storage tank systems installed before the coming into force of these Regulations would have to perform prescribed leak-detection testing at a specified frequency on single-walled underground equipment and single-walled aboveground equipment that does not have secondary containment. The method and frequency of leak detection varies, depending on the type of storage tank system. Specifically, single-walled underground tanks and piping would require testing within two years of these Regulations coming into force and once every year after that. In addition, horizontal aboveground tanks without secondary containment would have to be visually inspected once within two years of the coming into force of the proposed Regulations and once per month thereafter. Vertical aboveground tanks without secondary containment would require a test within two years after the day on which these proposed Regulations come into force, and once every ten years thereafter. Sumps, regardless of installation date, must also be visually inspected once within two years of the coming into force of the proposed Regulations and once per year thereafter.

In accordance with the Environmental Code of Practice for Aboveground and Underground Storage Tank Systems Containing Petroleum and Allied Petroleum Products (hereinafter referred to as the "Code") developed by the Canadian Council of Ministers of the Environment (CCME), the proposed Regulations define a transfer area as the area around the connection point between a delivery truck, railcar, or vessel and storage tank system with a capacity of 2 500 litres or more. Petroleum product and allied petroleum product transfer areas would have to be designed to contain spills that would occur during the product transfer process

(b) for existing storage tank systems, within four years of the coming into force of the proposed Regulations.

Suppliers of petroleum products would be prohibited from transferring petroleum products into any storage tank, unless the storage tank system identification number is visible. They would be required to record the storage tank system identification number on their invoice and notify the operator of any spills or leaks that occurred during the transfer process.

The proposed Regulations also set forth the requirements that govern the design and installation of a new storage tank system or any component of a new system. These requirements are either directly incorporated from or are based on the requirements of the CCME Code of Practice.

The proposed Regulations would also require the owner or operator to identify their storage tank systems and obtain from the Minister of the Environment (hereinafter referred to as the "Minister") an identification number for their systems. This identification number would have to be displayed on or near the storage tank system.

In addition, the owner or operator of a storage tank system would have to prepare an emergency plan that takes into consideration the elements required to protect the environment and human health.

In the event of a spill, the proposed Regulations outline the details required to be provided in a notification report that must be submitted to the Minister under paragraph 212(1)(a) of CEPA 1999. The report includes the date on which the spill occurred, a description of the circumstances of the spill, and any mitigating measures taken.

Moreover, records respecting the design and installation of the storage tank systems would have to be kept for the life of the storage tank system. Other records pertaining to operation and maintenance would have to be kept for five years from the date the record was made.

The objective of the existing Regulations is to develop an inventory of storage tank systems on federal and Aboriginal lands. Specifically, the existing Regulations require that owners register their storage tanks with the department that has jurisdiction over the land where the storage tank systems are located. Departments must submit an annual report to Environment Canada indicating the number of underground and above-ground storage tank systems on the lands that they administer, and identify whether or not these storage tank systems meet the Technical Guidelines.

However, the existing Regulations do not require the owners to ensure that their storage tank systems meet the Technical Guidelines, and they do not prevent the operation of a leaking storage tank system. Although delivery of petroleum products to unregistered tanks is prohibited, there are no provisions in the existing Regulations to allow a supplier of petroleum products to know whether or not the storage tank system is registered in accordance with the existing Regulations.

Furthermore, the existing Regulations do not cover storage tank systems owned by federal works and undertakings or by Crown corporations, unless the storage tank systems are located on federal or Aboriginal lands. In addition, not all federal departments are included under this regulation, as CEPA 1988 required the concurrence of the Minister of each government department in order for the department to be regulated. The existing Regulations do not attain the environmental goal of preventing spills and leaks of petroleum products from storage tanks that are owned or operated by federal entities and are insufficient in protecting human health and the environment.

The implementation of the Technical Guidelines, as well as major compliance promotion programs undertaken by Environment Canada from 1996 to 1999, have resulted in the upgrade or removal of a number of high-risk storage tank systems. However, in spite of some voluntary compliance with the Technical Guidelines, spills and leaks from storage tank systems that contain petroleum products continue to pose significant human health and environmental risks.

Under a voluntary guideline or code of practice, federal entities are not legally required to comply. Given the broad spectrum of federal entities that own or operate storage tank systems for petroleum products, the severity of the environmental and health damages caused by spills and leaks of petroleum products, and the fact that, as of 2003, only 50% of all tanks that are located on federal and Aboriginal lands are estimated to be in compliance with the Technical Guidelines, the voluntary measure is unsuitable.

The proposed Regulations were selected as the best option to achieve, within the shortest time frame possible, the environmental and health objectives of reducing the risk of contaminating soil and groundwater due to spills and leaks of petroleum products from storage tank systems. These proposed Regulations would require that storage tank systems be designed, installed and, where necessary, removed, in an environmentally responsible manner. Leaking storage tank systems would be withdrawn from service. Storage tank systems that are considered to be a high risk to the environment would also be removed.

First, several sources of data have been used to estimate the number of storage tanks and the compliance costs for each group of the regulated community. These sources varied considerably in detail, completeness and preciseness, which complicated the analysis. As a result, there is considerable uncertainty concerning both the number of tanks and their characteristics.

For tanks that are located on Aboriginal lands and on some federal lands, raw data have been supplied by Indian and Northern Affairs Canada (INAC). These tanks are owned or operated by a variety of entities, including INAC, Aboriginal bands, or private parties such as gas stations and mining companies.

For federal departments, boards, agencies and Crown corporations, two sources have been used. First, in 2001, Environment Canada invoked subsection 11(3) of the existing Regulations to collect consolidated records from various federal departments that are subject to the existing Regulations. These records were later used by Environment Canada to generate inventories for many federal departments, boards, agencies and Crown corporations not included in a 2004 contract with Environmental Management Solutions Inc. (EMS).

Second, a study was conducted by EMS in 2004 to gather more information on federal storage tank inventories by directly contacting the eight federal departments and agencies that have the largest tank inventories. (see footnote 3) The eight federal entities are the Department of National Defence (DND), Transport Canada (TC), INAC, (see footnote 4) the Royal Canadian Mounted Police (RCMP), Agriculture and Agrifood Canada (AAFC), Environment Canada, Public Works and Government Services Canada (PWGSC) and Parks Canada. The inventories received from departments and agencies were assessed individually by EMS to determine the number of tanks that would have to be replaced or upgraded. These figures were then used to estimate compliance costs for these entities.

Third, the proposed Regulations also require compliance from specified federal works and undertakings (FWU), including port authorities, as defined in the Canada Marine Act, railways and airports. In 2003 through 2005, Environment Canada contacted members of the FWU community to learn more about their tank systems. A number of responses were received, but many are simple estimates of aggregate numbers of storage tanks, with no description of individual tank characteristics. Furthermore, many of these organizations do not maintain records containing this information. Accordingly, this added uncertainty is reflected in the Monte Carlo risk analysis conducted below.

Spills and leaks of petroleum products can lead to serious water and soil contamination, which, in turn, can have a negative impact on human health and the environment. Once the proposed Regulations are in place, the operation of leaking storage tank systems will not be permitted, and the removal of high-risk storage tank systems will be required; consequently, the number of spills and leaks is expected to be reduced and negative effects of storage tank system failure that would have otherwise occurred will be avoided. The resulting benefits include avoided soil and groundwater contamination, greater protection for drinking water supplies, a reduction in adverse impacts on agricultural yield due to petroleum concentration in soil, and maintenance or increased value of federal and Aboriginal lands. Nevertheless, not all incremental benefits can be monetized, due to the lack of detailed data and information on the receiving environment, the population of the affected areas, and economic activities in the affected areas. Consequently, only the benefits associated with avoided soil and groundwater contamination are estimated in the benefits section. However, non-monetized benefits are believed to be significant; therefore, the dollar amount of benefits provided in the benefits section below is a conservative estimate.

The benefits associated with avoided soil and groundwater contamination are in the form of avoided clean up, avoided environmental site assessment (ESA), and avoided remediation costs. These costs can vary considerably, depending on the amount of spilled or leaked petroleum product and the characteristics of both the product and the receiving environment. To assign a monetary value to the benefits and improve our understanding of site contamination and the corresponding costs, Environment Canada contracted the Science Applications International Corporation 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 assumptions and results are summarized in the report, entitled Estimation of Site Remediation Costs Related to Releases from Federal Storage Tanks. The unit costs provided in the report were used to estimate avoided remediation costs resulting from the proposed Regulations. The costs do not include the dismantling of buildings or other infrastructure or the relocation to an alternate site as consequences of cleaning up a contaminated site. These costs can be significant to the point of exceeding the cost of cleaning up the contamination itself. As for avoided environmental site assessment costs, unit costs were obtained from an environmental management firm to enable such estimation.

The removal of high-risk storage tank systems would result in a number of avoided leaking storage tank systems. However, not all high-risk storage tank systems are considered in the benefit analysis, due to the lack of information on the installation of the storage tank systems. Consequently, only the incremental benefit associated with the removal of underground storage tank systems that contain single-walled tanks and single-walled piping that do not have pre-existing corrosion protection and leak detection is assigned a monetary value. Given the dates on which various provincial regulations came into force and their regulatory requirements, and the information from storage tank manufacturers regarding when they started to standardize corrosion protection and leak detection technologies, it is assumed that underground storage tank systems containing single-walled tanks and single-walled piping, installed between 1987 and 1995, do not have corrosion protection and leak detection and are currently not leaking. The removal of these systems would result in a number of avoided contaminated sites. Due to data limitations, only some federal departments, boards, agencies and Crown corporations are captured in estimating the avoided costs associated with avoided contaminated sites.

The other major source of incremental benefits is the removal of leaking storage tank systems that would result in avoided additional contamination. To monetize this benefit, it is assumed that storage tank systems installed prior to 1987 are leaking today. Note that the magnitude of the avoided cost depends on the time period for which these tanks have been leaking, the rate at which the product is leaking, the product leaked and the type of receiving environment (e.g. clay or sand). Given that this information is not available, it is conservatively assumed that these proposed Regulations would avoid 25% of the average lifetime contamination per leaking tank. The significant uncertainty in this percentage is reflected in the Monte Carlo risk analysis conducted below. Furthermore, the benefits are assumed to be spread evenly over 12 years (this timeframe was selected for the reason explained below). This reflects the fact that there is a finite number of contaminated sites that can be remediated at any given time, due to the limited number of qualified personnel and equipment required. As a result, the costs associated with these activities would be spread over time.

Vertical aboveground storage tank systems are required to be tested within two years after the proposed Regulations come into force and every 10 years thereafter. Thus, for analytical purposes, a 12-year time horizon was selected, such that a minimum of two vertical aboveground storage tank system leak-detection tests are accounted for. A discount rate of 7.5% was used.

As indicated earlier, Environment Canada undertook a study to estimate the compliance costs for eight federal departments and agencies. This study estimated the unit cost of each feature of a storage tank system, such as a leak-detection device or corrosion protection. These unit costs were used in Environment Canada's calculation of compliance costs.

Major regulatory requirements covered in the cost analysis are the removal and disposal of underground storage tank systems that contain single-walled tanks and piping that do not have corrosion protection and leak detection; the loss of economic values of these systems due to early withdrawal from services; the removal and disposal, replacement or repair of leaking storage tank systems; leak detection tests; and the preparation of emergency plans. Regulatory requirements not subject to cost analysis due to lack of data include spill containment at product transfer areas and the removal of high-risk storage tank systems, such as partially buried tanks. It has been assumed that for the spill containment requirements at transfer areas, there would be no additional costs, because this is already required by the National Fire Code.

Other costs are expected to be small and are thus exempt from the calculation of compliance costs. Such costs include those incurred from record-keeping and spill-reporting requirements. The cost associated with record keeping is expected to be minimal, as it is currently a normal operating practice of the owner or operator of storage tank systems. In addition, for owners or operators of storage tank systems that are located on federal and Aboriginal lands, record keeping is currently required by the existing Regulations.

The cost of spill reporting includes the submission of a written report from the owner or operator of storage tank systems. While there may be an increase in reporting in the near term, it is expected that over time the number of spills and leaks would be reduced; therefore, the cost associated with spill reporting is also expected to be minimal.

Suppliers of petroleum products to storage tank systems that would be captured in these proposed Regulations would also be impacted. There are approximately 600 potential suppliers of petroleum products to these storage tank systems. Based on the regulatory requirements explained above, the costs associated with recording identification numbers and notifying the operator in case of a spill that occurs during petroleum product transfer is expected to be negligible. Furthermore, given the potential environmental and legal consequences of a spill of petroleum products, it is expected that suppliers already carry out due diligence by not transferring product into storage tank systems that are known to be high-risk or leaking storage tank systems. Thus, the prohibition of transferring petroleum products into unidentified storage tank systems is not expected to have a significant impact in terms of lost business for these suppliers.

For storage tank systems that are located north of 60° (i.e. the territories), the cost of preparing an emergency plan is expected to be minimal, as emergency plans are required for larger storage tank systems by the existing territorial storage tank system regulations. Therefore, such cost is not included in the cost analysis.

To estimate compliance costs, the number of leaking tanks and the number of underground storage tank systems containing single-walled tanks and piping that do not have corrosion protection and leak detection were estimated using the amassed inventories, unit costs provided by EMS, and a number of assumptions. The major assumption made in the analysis is that tanks installed prior to 1987 are leaking today. These tanks would have been installed prior to the first environmental code of practice for storage tank systems containing petroleum products developed under the auspices of the CCME. A related assumption is that any tank that must be removed will be replaced.

— If the installation year of a storage tank system is unknown, it was installed before 1987;

— If the construction of the underground storage tank is unknown, it is a single-walled steel tank;

— If the installation details of an underground storage tank system installed between 1987 and 1995 are unknown, neither the tank nor the piping have both corrosion protection and leak detection;

— Shop-fabricated aboveground tanks with a capacity greater than 50 000 litres have a vertical orientation;

— Shop-fabricated aboveground tanks less than 50 000 litres have a horizontal orientation;

— Post-1987 vertical and horizontal aboveground storage tanks have secondary containment;

— Pre-1987 vertical shop-fabricated aboveground and field-erected storage tank systems are repaired and returned to service;

— Pre-1987 aboveground storage tank systems that contain used oil are removed, disposed of and replaced;

— The costs of disposal, repair, replacement, site assessment and remediation are assumed to be 50% greater for tanks located north of the 60th parallel. This reflects the logistic costs to mobilize equipment and personnel to these locations;

— Ten percent 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 (excluding north of 60°). A 25% cost factor is applied to these tank systems. This reflects the logistic costs to mobilize equipment and personnel to these locations;

— To all disposal, repair, replacement, site assessment and remediation costs, a 15% engineering contingency is applied. In addition, a 20% management fee associated with contracting and supervision of the work is applied;

— For federal works and undertakings, available data was used to extrapolate the total number of tanks for this group;

— To categorize tanks for federal works and undertakings, percentages were generated using data from other groups, and then applied; and

— To estimate the number of pre-1987 tanks for federal works and undertakings, percentages were generated using data from other groups, and then applied.

There are approximately 1 200 organizations and private owners identified as members of the Federal House that could be subject to the proposed Regulations (see first column of Table 1). Not all of these organizations, however, own or operate tanks; therefore, not all of them would be subject to the proposed Regulations. For the purpose of this analysis, only major tank owners and operators were considered, as it is believed that they will bear the major share of the total cost burden. More specifically, affected parties that were captured in the analysis were 54 railways, the 26 Tier 1 airports of the National Airports System, all 19 port authorities, 17 federal departments, boards and agencies, 6 Crown corporations, and 219 Aboriginal bands and private owners on federal and Aboriginal lands (as shown in column 2 of Table 1). In total, these affected parties are estimated to own or operate 8 449 underground and aboveground tanks, of which 3 073 are assumed to be leaking.

Based on the assumptions discussed previously, it is estimated that Canadians would reap a benefit of around $556 million (discounted 2004 dollars) over 12 years, after the proposed Regulations come into force (see Table 2). This benefit is derived from the removal of leaking storage tank systems and underground storage tank systems, installed between 1987 and 1995, that contain single-walled tanks and piping. More specifically, it is the avoided remediation costs associated with avoided additional contamination and avoided environmental site assessment cost.

In addition to the avoided clean-up, site assessment and remediation costs, the proposed Regulations would generate other benefits. These include the avoidance of the following:

— Negative impacts on human health as a result of petroleum contamination (e.g. chronic health ailments);

— Emergency response costs associated with spills and leaks from storage tank systems;

— The negative impact on agricultural yield due to petroleum concentration in soil;

— Reduced value of land immediately adjacent to sites contaminated by spills and/or leaks of petroleum products from storage tanks; and

These benefits have not been expressed in dollar values in this Regulatory Impact Analysis Statement (RIAS) due to the inherent difficulty in assigning a quantity or monetary value. Nevertheless, they are expected to be significant. A 2000 study on the socio-economic impacts of the Canada-wide Standards for petroleum hydrocarbons in soil, prepared for the CCME, found that these values are difficult to express in dollar terms but should not be ignored.

The major regulatory requirements covered in this analysis are the removal and disposal of underground storage tank systems containing single-walled tanks and piping installed between 1987 and 1995; the removal and disposal, replacement, or repair of leaking tanks; leak detection tests; and the preparation of emergency plans (see Table 3). The costs of removal and disposal, replacement, and repair of leaking tanks and the cost of preparing emergency plans are expected to be incurred within four years after the proposed Regulations come into force. Other costs, such as the cost of leak detection tests, are expected to be incurred within two years of the proposed Regulations coming into force and on an annual basis thereafter.

The estimated total compliance cost to the affected parties covered in this analysis is roughly $187 million (discounted 2004 dollars) over 12 years. Of this total, the costs of removal and disposal, replacement, and repair of leaking tanks and the costs of removal and disposal of single-walled underground storage tank systems installed between 1987 and 1995, which are expected to be incurred within four years after the proposed Regulations come into force, are estimated at $164 million (discounted 2004 dollars).

For the first year following the coming into force of the proposed Regulations, a one-time amount of $350,000 will be required for the training of enforcement officers.

In the first year following the delivery of the training, enforcement activities are estimated to require an annual budget of $1,103,500, broken down as follows: seven employees working full-time (EWFT), at an approximate cost of $776,400 for inspections (which includes operations and maintenance costs, transportation and equipment costs), $143,300 for investigations and $183,800 for measures to deal with alleged violations (including environmental protection compliance orders and injunctions).

For the subsequent 11 years, the enforcements costs are estimated to require an annual budget of $1,192,600 broken down as follows: seven EWFT at an approximate cost of $775,000 for inspections (which includes operations and maintenance costs and transportation costs), $143,300 for investigations, $183,800 for measures to deal with alleged violations (including environmental protection compliance orders and injunctions) and $90,500 for prosecutions.

Compliance promotion is estimated to be $1,056,500 over five years after the proposed Regulations come into force, and the registration database operational cost is estimated to be about $60,000 yearly.

In summation, it is estimated that the proposed Regulations would cost Environment Canada approximately $11 million dollars (discounted 2004 dollars) over 12 years to promote compliance and enforce the proposed Regulations (Table 4).

It is estimated that the proposed Regulations would result in a net benefit of $369 million dollars (discounted 2004 dollars) over 12 years after the proposed Regulations come into force. This figure does not include other non-quantified benefits discussed above.

As noted above, uncertainty in tank numbers and characteristics is considerable. To address this uncertainty, a Monte Carlo simulation was conducted. Monte Carlo analysis (MCA) involves assigning a unique probability distribution to all variables of interest (i.e. uncertain). The model is then solved a large number of times, each time by taking a value at random, according to each variable distribution. In this analysis, inventory, unit cost, and other key parameters were assigned plausible probability distributions. For example, the discount rate was allowed to fluctuate between a range of plus or minus (+/-) 5 to 10%. For most variables, such as unit costs and many inventory figures, a range of +/- 10% was assumed. Two notable exceptions to this are the federal works and undertakings inventory and the quantities of avoided soil and groundwater contamination, which were varied by +/- 40% and +/- 30%, respectively, to account for the considerable uncertainty present in their base case values.

The MCA provided a number of informative results, including a probability distribution of key output variables, such as total cost and net benefit. Based on 5 000 random draws from the above distribution, the results indicate at least an 85% chance that the net benefit will be positive. It is important to note that this result is itself dependent on the quality of the above assumptions.

The results also indicated which variables are of greater influence on the net benefit figure. Net benefit was most sensitive to the amount of avoided additional soil and groundwater contamination, respectively. It was followed closely by the discount rate and the size of the federal works and undertakings inventory which, as seen above, is the largest in the regulated community. Operating and management costs were also significant, which is not unexpected given that most of the cost analysis is dependent upon these figures.

Environment Canada consulted with stakeholders on the draft proposed Regulations, from September 2002 to March 2005, with a period of intensive consultations between February and September 2003. A total of 25 consultation and information sessions were held in 2003. The consultation process included the distribution of a consultation package, which included the draft proposed Regulations that were based on the CCME Code, followed by a series of meetings, information sessions and consultation sessions. These took place in each of Environment Canada's five administrative regions (Atlantic, Quebec, Ontario, Prairie and Northern, Pacific and Yukon). Invitees included representatives from federal departments, boards and agencies; Aboriginal organizations, bands and councils; Crown corporations; federal works and undertakings; industry groups/associations; provincial/territorial authorities; environmental consulting firms; non-governmental environmental organizations; and owners of tank systems on federal or Aboriginal lands. The objectives of the consultation sessions were to provide stakeholders with detailed information and to solicit their input on the draft proposed Regulations.

Comments, concerns and suggestions were raised throughout the course of the consultation sessions. Environment Canada has reviewed and addressed those comments and concerns through a response document, emails, letters and telephone calls. A summary of comments received and Environment Canada's responses to those comments is provided below. Some changes have been made to the draft proposed Regulations to address comments that Environment Canada received and considered. A report on the consultations was also published by Environment Canada, in which we summarized the comments received from stakeholders and the Department's responses. This report, entitled "Report of Consultation Sessions February 2003 — September 2003," was circulated to stakeholders, for their information.

The following sections describe and summarize the consultation and information sessions, comments received from stakeholders, and Environment Canada's responses to those comments.

— Federal Departments, Boards and Agencies, Crown Corporations: Environment Canada outlined the draft proposed Regulations to this group of stakeholders at five information sessions (Halifax, Edmonton, Vancouver, Montréal, and Toronto). These sessions were followed by a national consultation session in Ottawa. Approximately 400 invitations were sent and about 350 invitees attended. Subsequent bilateral meetings were held with several federal organizations, such as the North Warning System (administered by DND), Parks Canada, INAC and the Interdepartmental Storage Tank Working Group, which is co-chaired by AAFC and PWGSC and represents the federal government on storage tank system issues.

— Federal Works and Undertakings and Non-federal Owners on Federal and Aboriginal Lands: There were nine full-day consultation sessions held for this group of stakeholders (Halifax, Edmonton, Vancouver, Montréal, Toronto, Whitehorse, Yellowknife, Ottawa and Iqaluit). Information sessions were also conducted with specific organizations, such as the Canadian Airport Council and the Railways Association of Canada. Approximately 1 700 invitations were sent and about 340 invitees attended.

— Aboriginal Communities and Organizations: This part of the process included 15 sessions with representatives of Aboriginal communities and organizations. These sessions were held in Whitehorse, Vancouver, Nanaimo, Prince Rupert, Edmonton, Saskatoon, Hamilton, Thunder Bay, Québec, Montréal, Eskasoni, Millbrook, Fredericton, Moncton and Conne River. The Assembly of First Nations was also kept aware of developments throughout the process. About 790 invitations were sent and 190 invitees attended.

— Provinces and Territories: Consistent with the requirements of subsection 209(3) of CEPA 1999, the Minister of the Environment offered to consult with the governments of the three Canadian territories and with members of the CEPA National Advisory Committee who are representatives of Aboriginal governments. On request from the Government of the Northwest Territories and the Government of Nunavut, information and consultation sessions were held in Yellowknife and Iqaluit. Approximately 50 invitations were sent and about 40 invitees attended.

— Fuel Suppliers: Environment Canada outlined the anticipated requirements for fuel suppliers in the proposed Regulations to this group of stakeholders at three information sessions (via teleconference). Approximately 500 invitations were sent and about 100 invitees attended.

— Definitions: Stakeholders asked Environment Canada to make the definitions section as precise as possible. The three comments that were consistently raised, and Environment Canada's responses, are summarized as follows:

— Funding to upgrade existing storage tank systems: Stakeholders emphasized the need to ensure that the funding required for upgrading is available. Specifically, stakeholders observed that the timeframe needs to be in tune with federal funding processes and "budgeting realities."

Environment Canada took into consideration and analyzed several possibilities based on this input. Environment Canada recognized that the proposed upgrading requirements would need more time to plan and complete and extended many of the timelines from two to four years. In addition, 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.

— Responsibilities of suppliers of petroleum products: Stakeholders noted that a significant number of spills of petroleum products occur during delivery, when the product is transferred from the delivery vehicle to the storage tank system. The spills often result while suppliers or fuel deliverers are on site. It may be difficult for the owner or operator to be aware of these spills, as they are not always reported, particularly when they occur in locations that are not normally staffed. Stakeholders suggested that suppliers be covered by the draft proposed Regulations.

Environment Canada agreed and has added a section within the proposed Regulations to address these concerns. As a result, suppliers of petroleum products can deliver only to identified storage tank systems and must record the storage tank system identification number on the invoice. In addition, suppliers must immediately notify the operator of the storage tank system of any spill or leak that occurs during the transfer process.

— Scope of the proposed Regulations and harmonization with provincial and territorial requirements: During the consultation workshops, some stakeholders were concerned that they would be obliged to comply with both the provincial and federal regulations concerning storage tank systems containing petroleum products. Part 9 of CEPA 1999 ensures that the activities of federal government operations and federal and Aboriginal lands can be regulated along the same lines as the activities regulated under provincial law. While federal departments, agencies, boards and commissions and Crown corporations are likely beyond the reach of provincial law, some federal works and undertakings, such as commercial banks and trucking, are likely within the reach of provincial law.

To better understand this issue, between August and September 2003, Environment Canada contracted a study (see footnote 5)to determine if provincial and territorial storage tank system environmental regulations were being applied to federal entities such as federal departments, boards, agencies, Crown corporations, federal and Aboriginal lands, and federal works and undertakings. To achieve that, the consultant contacted several provincial environmental authorities and branches, such as offices of Enforcement and Compliance, Environment and Energy, Environmental Monitoring and Compliance, and Fire Marshals. In total, 39 entities were contacted in the Quebec Region, 55 in the Ontario Region, 63 in the Atlantic Region, 45 in the Prairie and Northern Region, and 78 in the Pacific and Yukon Region.

The findings of this study were that most provinces were not enforcing their environmental storage tank system regulations for the storage tank systems of federal departments, boards and agencies and Crown corporations, or on federal or Aboriginal lands. That being said, it is not impossible that some affected parties are responding to the provincial regulations. Because of the significant number of potential affected parties, it would be a lengthy and resourceful process to determine the possibility and the extent of regulatory duplication for each party. Note that there are no provincial storage tank systems regulations in British Columbia. Consequently, Environment Canada is of the opinion that provincial regulations for storage tank systems are not being applied to federal departments, boards and agencies, Crown corporations, and federal and Aboriginal lands. However, regulatory duplication could occur in some few cases. Environment Canada will consider appropriate measures to minimize or eliminate any duplication that could occur after the coming into force of the proposed Regulations.

For federal works and undertakings, it has been found, after a thorough analysis, that provincial storage tank system regulations are being enforced on certain groups of FWUs, such as commercial banks. In order to minimize potential regulatory duplication, it was necessary to tailor the application for "federal works and undertakings" under the proposed Regulations, so that the regulatory requirements would apply to only specified entities, namely railways, airports and port authorities set out in the schedule to the Canada Marine Act. They were identified as having a significant number of storage tank systems and unlikely to be subject to provincial environmental regulations.

— Harmonization with territorial regulatory requirements: On request from the Government of the Northwest Territories and the Government of Nunavut, information and consultation sessions were held to compare the draft proposed Regulations with existing territorial storage tank system regulations, in order to identify potential duplication. It was found that similar regulatory requirements are spill reporting and emergency planning. However, for design, installation and operation, the draft proposed Regulations include elements that are not currently in the territorial regulations. In addition, the removal of leaking storage tank systems and leak detection tests are not currently required by the territorial regulations. Environment Canada is prepared to work along with the territories to address potential duplication issues as they relate to spill reporting and emergency planning.

— The perceived burden of elements such as tank identification, record keeping and spill reporting: Stakeholders emphasized the need to avoid duplication in the identification process. Specifically, there was concern that tank owners and operators would now have to report to two regulating authorities (Environment Canada and the province or territory), thus creating duplication of work.

For reasons explained earlier, regulatory duplication may result for some affected parties; therefore, the duplication of reporting and record keeping is expected to occur in few cases. To ease administrative burden, Environment Canada has created two processes: online identification through a secure, Web-based application and the manual submission of a paper form. The identification number will be provided not only electronically by return email but could also be provided by posted mail, so that owners and operators can retain a paper record.

Stakeholders also suggested that the 180-day timeline to identify storage tank systems was too short and should be extended. To address this concern, Environment Canada now proposes that owners and operators have two years from the date of coming into force of the proposed Regulations to identify their storage tank systems to the Minister. In the event that a stakeholder does not identify all of its tank systems to Environment Canada within the first year, a progress report will have to be produced. Information that will need to be included in the progress report includes the number of tanks currently identified to Environment Canada; the estimated number of tanks that have yet to be identified; the geographic location of these tanks; the challenges that have prevented identification; the steps that have been taken to meet the identification requirements; and a description of the plan to complete identification requirements.

The proposed record-keeping timeframes were also adjusted to reflect the concerns of the regulated community. Specifically, the proposed requirement of keeping all records for the life of a tank system was asked to be changed, noting that this may be "unwieldy," since the life span of a tank system can be up to 40 years or more and paper documents could not conceivably be collected throughout that entire time. To address that concern, changes were made to the draft proposed Regulations to require that only design and installation drawings be kept for the life of the tank. All other records will be kept for five years from the day on which they were made.

Some comments indicated that oral and written reporting of each spill incident with no minimum volume was considered unrealistic and burdensome. It was recommended that oral and subsequent written reports be required for incidents based on the amount of petroleum product spilled and that the period allowed for reporting be triggered by the date on which the spill was detected. Environment Canada agreed and changes have been made to the proposed Regulations. Specifically, in the event of a spill equal to or greater than 100 litres, an enforcement officer or other designated person shall be notified and a written report provided.

— Funding required for upgrading and replacing tank systems: It was commented that Environment Canada should provide funding for stakeholders to upgrade their storage tank systems, especially those located in remote areas and on Aboriginal lands. Environment Canada is of the opinion that it is tank owners' responsibility to upgrade and replace their storage tank systems. As such, no funding will be provided by Environment Canada.

— Geographic challenges for tanks located in remote areas: Remote communities across Canada communicated their concerns over their ability to properly comply with all the upgrading provisions in the draft proposed Regulations, given the unique geographic challenges posed by the location of the tank systems, the extreme weather conditions, and the short supply of qualified technicians for storage tank maintenance, repair and inspection. These comments became irrelevant when Environment Canada decided to remove most of the upgrading provisions from the proposed Regulations. For the only remaining upgrading requirement (product transfer areas), Environment Canada hired experts to create an inexpensive but effective design concept for product transfer areas that can be installed in extreme climates. This information will be shared with stakeholders during compliance promotion, as one possible means to providing spill containment in product transfer areas.

Environment Canada made changes to the draft Regulations to allow the owner or operator of a storage tank system to keep the emergency plans and storage tank system records at the nearest place of work rather than requiring records to be stored on site. This was to address the concern that some tanks are located in remote areas and do not have any buildings or other structures where records could be stored on site.

The concerns described above were the major issues raised during the information and consultation sessions. There were also requests for clarification with respect to provisions in the draft proposed Regulations dealing with corrosion protection, secondary containment for certain tank types, venting, piping and the use of emerging technologies. These have all been examined, and clarification was provided in the proposed Regulations where deemed necessary.

Since the proposed Regulations are made under CEPA 1999, enforcement officers will, when verifying compliance with the Regulations, apply the Compliance and Enforcement Policy for CEPA 1999. The Policy also sets out the range of possible responses to alleged violations: warnings, directions, environmental protection compliance orders, ticketing, ministerial orders, injunctions, prosecution, and environmental protection alternative measures (which are an alternative to a court trial after the laying of charges for a CEPA 1999 violation). In addition, the Policy explains when Environment Canada will resort to civil suits by the Crown for costs recovery.

When, following an inspection or an investigation, an enforcement officer discovers an alleged violation, the officer will choose the appropriate enforcement action based on the following factors:

— Nature of the alleged violation: This includes consideration of the damage, the intent of the alleged violator, whether it is a repeat violation, and whether an attempt has been made to conceal information or otherwise subvert the objectives and requirements of the Act.

— Effectiveness in achieving the desired result with the alleged violator: The desired result is compliance within the shortest possible time and with no further repetition of the violation. Factors to be considered include the alleged violator's history of compliance with the Act, willingness to co-operate with enforcement officers, and evidence of corrective action already taken.

— Consistency: Enforcement officers will consider how similar situations have been handled in determining the measures to be taken to enforce the Act.

Ms. Anne MacKinnon, P. Eng., Senior Environmental Engineer, Toxics Management Division, Environmental Protection Operations Directorate, Atlantic Region, Environment Canada, Dartmouth, Nova Scotia B2Y 2N6, 902-426-5104 (telephone), anne.mackinnon@ec.gc.ca (email), and Ms. Brenda Tang, Acting Senior Economist, Impact Analysis and Instrument Choice Division, Strategic Analysis and Research Directorate, Environment Canada, Gatineau, Quebec K1A 0H3, 819-997-5755 (telephone), brenda.tang@ec.gc.ca (email).

Notice is hereby given, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), that the Governor in Council, pursuant to section 209 of that Act, proposes to make the annexed Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations.

Any person may, within 60 days after the date of publication of this notice, file with the Minister of the Environment comments with respect to the proposed Regulations or a notice of objection requesting that a board of review be established under section 333 of that Act and stating the reasons for the objection. All comments and notices must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to the Director General, Pollution Prevention Division, Department of the Environment, Ottawa, Ontario K1A 0H3.

A person who provides information to the Minister of the Environment may submit with the information a request for confidentiality under section 313 of that Act.

STORAGE TANK SYSTEMS FOR PETROLEUM PRODUCTS AND ALLIED PETROLEUM PRODUCTS REGULATIONS

"aboveground tank" means a tank that operates at atmospheric pressure and that has all of its volume either above grade or encased within an unfilled secondary containment. (réservoir hors sol)

"allied petroleum product" means a product set out in Schedule 1. (produit apparenté)

"certification mark" means the mark, such as a tag, label, plate or embossing, on or affixed to a tank or a component of a storage tank system, certifying that the tank or component conforms to the standards of a certification organization accredited by the Standards Council of Canada or conforms to the standards of the American Petroleum Institute. (marque de certification)

"corrosion expert" means a professional engineer experienced in corrosion protection or a person recognized by NACE International as a corrosion specialist. (expert en corrosion)

"free oil" means the non-soluble, non-emulsified petroleum product or allied petroleum product layer that accumulates in an oil-water separator. (huile libre)

"partially buried tank" means a tank that has part of its volume above grade and part of its volume below grade, unless all of the tank volume is encased within an unfilled secondary containment. (réservoir partiellement enfoui)

"petroleum product" means, other than an allied petroleum product, a single hydrocarbon or a mixture of at least 70% hydrocarbons by volume, refined from crude oil, with or without additives, that is used or could be used as a fuel, lubricant or power transmitter, and includes used oil, but does not include propane, paint and solvents. (produit pétrolier)

"piping" means pipes and tubing, including fittings and valves, that are for the handling and storage of petroleum products and allied petroleum products. (raccordement)

"secondary containment" means containment that prevents liquids that leak from a storage tank system from reaching outside the containment area and includes double-walled tanks, piping, liners and impermeable barriers. (confinement secondaire)

"separated solids" means the particulate material that settles at the bottom of an oil-water separator. (solide séparé)

"spill" means any loss of a petroleum product or an allied petroleum product in liquid form from a storage tank system, including a loss during a transfer of such a product to or from a storage tank system, but not including a loss that does not reach outside the storage tank system's secondary containment. (déversement)

"storage tank system" means a tank or commonly connected tanks with all piping, vents, pumps, sumps, diking, overfill protection devices, spill containment devices and oil-water separators. In the case of airports, the system ends at the pump discharge. (système de stockage)

"tank" means a closed container with a capacity of more than 230 L that is designed to be installed in a fixed location. (réservoir)

"transfer area" means the area around the connection point between a delivery truck, railcar or vessel and a storage tank system in which the tanks have an aggregate capacity of 2 500 L or more. (aire de transfert)

"underground tank" means a tank that operates at atmospheric pressure and that has all of its storage volume below grade and completely surrounded by fill. (réservoir souterrain)

"used oil" means oil — other than oils derived from animal or vegetable fats, other than crude oil or recovered fuel oils spilled onto land or into water and other than wastes from petroleum refining operations — that has become unsuitable for its original purpose due to the presence of impurities or the loss of original properties, including

2. (1) These Regulations apply to any storage tank system located in Canada in which petroleum products or allied petroleum products are stored and

(a) that is operated by a federal department, board or agency, or belongs to Her Majesty in right of Canada;

(b) that is operated in connection with a federal work or undertaking that is a port authority set out in the schedule to the Canada Marine Act, a railway or an airport;

(d) that is operated by a Crown corporation, as defined in subsection 83(1) of the Financial Administration Act, or that belongs to such a corporation.

(a) storage tank systems located in a building that provides secondary containment equivalent to a maximum hydraulic conductivity of 1 x 10^-6 cm/s, on a continuous basis;

(b) storage tank systems containing unprocessed petroleum products resulting from or used during oil or natural gas exploration; or

(c) a storage tank system that has aboveground tanks in which the aggregate capacity of the tanks is 2 500 L or less and the system is connected to a heating appliance or emergency generator.

3. (1) Subject to subsections (2) to (4), the owner or operator of a storage tank system that leaks a liquid must, without delay, temporarily withdraw the system from service in accordance with section 38, and the owner or operator may only return the system to service if they have made the necessary repairs and have performed the leak detection test described in subsection 16(2) or 17(2), as applicable.

(2) Subject to subsection (4), the owner or operator of a storage tank system installed before the coming into force of section 1 that has single-walled underground tanks that leak a liquid must, without delay, permanently withdraw those tanks and their components from service in accordance with section 39 and, within two years after the later of the day on which section 1 comes into force and the day on which the owner or operator becomes aware of the leak, remove them in accordance with section 40.

(3) Subject to subsection (4), the owner or operator of a storage tank system installed before the coming into force of section 1 that has single-walled underground piping and which piping leaks a liquid must, without delay,

(a) temporarily withdraw that system from service in accordance with section 38, permanently withdraw that piping from service in accordance with section 39, remove it in accordance with section 40 and replace it; or

(b) permanently withdraw that system from service in accordance with section 39 and, within two years after the later of the day on which section 1 comes into force and the day on which the owner or operator becomes aware of the leak,

(i) in the case of a storage tank system that has underground tanks, other than vertically-oriented underground tanks, or shop-fabricated aboveground tanks, remove the system in accordance with section 40, and

(ii) in the case of a storage tank system that has field-erected aboveground tanks or vertically-oriented underground tanks, remove all piping and other components that are outside the tanks in accordance with section 40.

(4) If unusual circumstances make it impossible to comply with subsection (1), (2) or (3), the owner or operator must, without delay, take necessary measures to minimize the immediate or long-term harmful effect on the environment and danger to human life or health until it becomes possible to comply with that subsection, and must, without delay, inform the Minister, in writing, of those circumstances and the measures to be taken. For greater certainty, a petroleum product or allied petroleum product must not be added to the system until it becomes possible to comply with that subsection.

4. The owner or operator of a storage tank system that permanently withdraws the system from service but that is not required to do so under subsection 3(2) or (3) must

(a) in the case of a storage tank system that has underground tanks, other than vertically-oriented underground tanks, or shop-fabricated aboveground tanks, remove the system in accordance with section 40; and

(b) in the case of a storage tank system that has field-erected aboveground tanks or vertically-oriented underground tanks, remove any piping and other components that are outside the tanks in accordance with section 40.

5. The owner or operator of a storage tank system that has tanks designed to be installed aboveground that were installed before the coming into force of section 1 below grade and completely surrounded by fill must, within four years after the day on which section 1 comes into force, permanently withdraw that system from service in accordance with section 39 and remove it in accordance with section 40.

6. The owner or operator of a storage tank system that has tanks designed to be installed underground that were installed before the coming into force of section 1 with all of their tank volume either above grade or encased within an unfilled secondary containment must, within four years after the day on which section 1 comes into force, permanently withdraw that system from service in accordance with section 39 and remove it in accordance with section 40.

7. The owner of a storage tank system that has a partially buried tank must, within four years after the day on which section 1 comes into force, permanently withdraw that system from service in accordance with section 39 and remove it in accordance with section 40.

8. A person must not install a storage tank system that has either partially buried or single-walled underground tanks to store petroleum products or allied petroleum products.

9. The owner or operator of a storage tank system installed before the coming into force of section 1 that has single-walled underground tanks, other than those described in subsection 3(2), must, within four years after the day on which section 1 comes into force, permanently withdraw those tanks and their components from service in accordance with section 39 and remove them in accordance with section 40 unless, on the day on which section 1 comes into force, those tanks have

(a) in the case of steel tanks, cathodic protection and leak detection, groundwater monitoring wells or vapour monitoring wells; and

(b) in the case of reinforced plastic tanks, leak detection, groundwater monitoring wells or vapour monitoring wells.

10. (1) Subject to subsection (2), the owner or operator of a storage tank system that has single-walled underground piping, other than one described in subsection 3(3), that is installed before the coming into force of section 1 must, within four years after the day on which section 1 comes into force,

(a) temporarily withdraw that system from service in accordance with section 38, permanently withdraw that piping from service in accordance section 39, remove it in accordance with section 40 and replace it; or

(b) permanently withdraw that system from service in accordance with section 39, and

(2) The owner or operator is not required to comply with subsection (1) if, on the day on which section 1 comes into force, that piping has

(a) in the case of steel piping, cathodic protection and leak detection, groundwater monitoring wells, vapour monitoring wells, single vertical check valves or mechanical line leak detection devices; and

(b) in the case of non-metallic piping, leak detection, groundwater monitoring wells, vapour monitoring wells, single vertical check valves or mechanical line leak detection devices.

11. The owner or operator of a storage tank system must ensure compatibility between any petroleum products and allied petroleum products to be stored in that system and the material used in the construction of the system.

12. The owner or operator of a storage tank system must not store petroleum products or allied petroleum products in a tank of the system unless that system's piping has been installed in accordance with these Regulations, a fill pipe and vent line have been installed in that tank and all of the system's other openings have been sealed.

14. (1) The owner or operator of a storage tank system that installs the system or any component of the system on or after the day on which section 1 comes into force must ensure that the system or the component conforms to the applicable requirements set out in the following provisions of the Environmental Code of Practice for Aboveground and Underground Storage Tank Systems Containing Petroleum and Allied Petroleum Products of the Canadian Council of Ministers of the Environment, published in 2003:

(a) Part 3, except Section 3.2, Clause 3.3.1(1)(c), Article 3.3.2, Clause 3.4.1(1)(c), Article 3.4.3, Section 3.7, Clause 3.9.2(2)(a), Articles 3.9.4 and 3.10.1 and Subclause 3.10.3(1)(b)(i);

(b) Part 4, except Articles 4.2.1 to 4.2.3, Clauses 4.2.4(1)(e) and 4.2.4(2)(h), Articles 4.2.5 and 4.2.6, Sentences 4.2.8(1), 4.2.8(2), 4.2.9(1), 4.3.1(1), 4.3.6(1), 4.3.6(2), 4.3.7(1), 4.3.7(2) and 4.3.8(1), Section 4.4 and Sentences 4.5.1(1), 4.5.2(1) to 4.5.2(4) and 4.5.3(2);

(2) The owner or operator of a storage tank system that has underground tanks that installs those tanks on or after the day on which section 1 comes into force must ensure that those tanks bear a certification mark certifying conformity with any of the following standards:

(i) if used for storing used oil, ULC-S652-93, Standard for Tank Assemblies for Collection of Used Oil, and

(ii) if used for storing other petroleum products or allied petroleum products

(A) Part B of ULC-S603-00, Standard for Steel Underground Tanks for Flammable and Combustible Liquids, or

(B) CAN/ULC-S603.1-03, External Corrosion Protection Systems for Steel Underground Tanks for Flammable and Combustible Liquids; and

(i) if used for storing used oil, ULC-S652-93, Standard for Tank Assemblies for Collection of Used Oil, and

(ii) if used for storing other petroleum products or allied petroleum products, ULC-S615-98, Standard for Reinforced Plastic Underground Tanks for Flammable and Combustible Liquids.

(3) The owner or operator of a storage tank system that has steel underground tanks that installs those tanks on or after the day on which section 1 comes into force must ensure that those tanks are protected from corrosion as follows:

(a) those tanks must bear a certification mark certifying conformity with CAN/ULC-S603.1-03, External Corrosion Protection Systems for Steel Underground Tanks for Flammable and Combustible Liquids and its appendices; or

(b) those tanks must have a cathodic protection system designed by a corrosion expert.

(4) For the purposes of subsections (2) and (3), any reference to a standard is a reference to the most recent version of that standard that exists at the time the storage tank system's component is erected, fabricated or manufactured, as applicable.

(5) The owner or operator of a storage tank system referred to in subsection (1) or a storage tank system that has tanks referred to in subsection (2) or (3) must comply with the applicable requirements before any petroleum products or allied petroleum products are first transferred into that system or those tanks.

15. (1) The owner or operator of a storage tank system must ensure that petroleum product and allied petroleum product transfer areas are designed to contain spills that occur during the transfer process.

(2) Subsection (1) applies to storage tank systems installed before the coming into force of section 1 four years after the day on which section 1 comes into force.

16. (1) The owner or operator of a storage tank system installed before the coming into force of section 1 that has single-walled underground tanks must test those tanks using a leak detection test within two years after the day on which section 1 comes into force and once every year after that test.

(a) be a test that is capable of detecting a tank leak rate of at least 0.38 L/h with a probability of detection of 0.95 or greater and a probability of false alarm of 0.05 or less accounting for variables such as vapour pockets, thermal expansion and contraction, evaporation and condensation, temperature stratification, groundwater level and tank deformation; and

(b) 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.

17. (1) The owner or operator of a storage tank system installed before the coming into force of section 1 that has single-walled underground piping must test that piping using a leak detection test within two years after the day on which section 1 comes into force and once every year after that test.

(a) be a test that is capable of detecting a piping leak rate of at least 0.38 L/h at a line pressure of 310 kPa with a probability of detection of 0.95 or greater and a probability of false alarm of 0.05 or less accounting for variables such as vapour pockets, thermal expansion and contraction, static head pressure, temperature differential and piping compressibility; and

(b) 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.

18. The owner or operator of a storage tank system installed before the coming into force of section 1 that has horizontal aboveground tanks without secondary containment must visually inspect the walls of those tanks within two years after the day on which section 1 comes into force and monthly after that inspection to determine if the tank is leaking.

19. (1) The owner or operator of a storage tank system installed before the coming into force of section 1 that has vertical aboveground tanks without secondary containment must, within two years after the day on which section 1 comes into force and once every ten years after that, inspect the internal bottom of those tanks using one of the following testing methods, namely, ultrasonic, magnetic particle, videographic or vacuum.

(2) The inspection must 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.

20. The owner or operator of a storage tank system installed before the coming into force of section 1 that has aboveground piping without secondary containment must visually inspect the walls of that piping within two years after the day on which section 1 comes into force and monthly after that inspection to determine if the piping is leaking.

21. The owner or operator of a storage tank system that has turbine, transition, dispenser or pump sumps must, within two years after the day on which section 1 comes into force and once every year after that, visually inspect those sumps to determine if they are leaking.

22. If the owner or operator of a storage tank system has reasonable grounds to believe that any of the following components of the system is leaking, they must test or inspect the component as described:

(a) in the case of an underground tank, they must test that tank using the leak detection test described in subsection 16(2);

(b) in the case of underground piping, they must test that piping using the leak detection test described in subsection 17(2);

(c) in the case of an aboveground horizontal tank, they must visually inspect the walls of that tank to determine if the tank is leaking;

(d) in the case of an aboveground vertical tank, they must inspect the internal bottom of that tank using one of the testing methods set out in subsection 19(1) in accordance with subsection 19(2);

(e) in the case of aboveground piping, they must visually inspect the walls of that piping to determine if the piping is leaking; or

(f) in the case of a turbine, transition, dispenser or pump sump, they must visually inspect the sump to determine if it is leaking.

23. The owner or operator of a storage tank system that has tested or inspected any component of the system for leaks under sections 16 to 22 must record the following information:

(f) the name and address of the company or individual that performed the test or inspection.

24. (1) The owner of a storage tank system that is installed before the coming into force of section 1 must identify the system by submitting to the Minister, either in writing or electronically, the information set out in Schedule 2

(b) within two years after the day on which section 1 comes into force if they submit to the Minister a storage tank system identification progress report containing the information set out in Schedule 3 one year after the day on which section 1 comes into force.

(2) The owner of a storage tank system that is installed on or after the day on which section 1 comes into force must identify the system by submitting to the Minister, either in writing or electronically, the information set out in Schedule 2 before the day on which the first transfer of petroleum products or allied petroleum products into any tank of the system occurs.

(3) The Minister must issue an identification number for the storage tank system for which the information was submitted and inform the owner of the identification number and its date of issuance.

(4) The owner or operator must display the identification number in a readily visible location on or near the storage tank system for which the number was issued.

(5) The owner or operator must update the information submitted under subsection (1) or (2) and submit to the Minister, either in writing or electronically, any changed information within 60 days after the change.

(6) A person must not operate a storage tank system unless an identification number has been issued for that system. In the case of a storage tank system referred to in subsection (1), this subsection applies beginning two years after the day on which section 1 comes into force.

(7) The person that is required to submit information under subsection (1), (2) or (5) must also submit to the Minister, in writing, a certification that the information is accurate and complete, dated and signed by the person or a person authorized to act on their behalf.

25. Suppliers of petroleum products or allied petroleum products must comply with the following requirements:

(a) they must not transfer petroleum products or allied petroleum products into any storage tank system unless the storage tank system identification number is visible;

(b) they must record the storage tank system identification number on their invoice; and

(c) they must immediately notify the operator of the storage tank system of any spill or leak that occurs during the transfer.

26. (1) The owner or operator of a storage tank system must prepare an emergency plan taking into consideration the following factors:

(a) the properties and characteristics of each petroleum product or allied petroleum product stored in each tank of the system and the maximum expected quantity of the petroleum product or allied petroleum product to be stored in the system at any time during any calendar year; and

(b) the characteristics of the place where the system is located and of the surrounding area that may increase the risk of harm to the environment or of danger to human life or health.

(b) a description of the measures to be used to prevent, prepare for, respond to and recover from any emergency that may cause harm to the environment or danger to human life or health;

(c) a list of the individuals who are to carry into effect the plan and a description of their roles and responsibilities;

(d) identification of the training required for each of the individuals listed under paragraph (c);

(e) a list of the emergency response equipment included as part of the plan, and the equipment's location; and

(f) the measures to be taken to notify members of the public who may be adversely affected by the harm or danger referred to in paragraph (b).

(3) The owner or operator of a storage tank system must ensure that the emergency plan is implemented

(a) in the case of a storage tank system that is installed before the coming into force of section 1, no later than two years after the day on which section 1 comes into force; and

(b) in any other case, before the day on which the first transfer of petroleum products or allied petroleum products into any tank of the storage tank system occurs.

27. The owner or operator of a storage tank system must keep the emergency plan up-to-date and keep a copy of it readily available for the individuals who are to carry it into effect, as well as a copy at the place where the storage tank system is located if that place is a place of work.

28. (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 26(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 26(1) and (2), the owner or operator may use the plan if they amend it so that it meets all of those requirements.

29. (1) Subject to subsection (2), the owner of a storage tank system must have the system installed by a person approved to do so by the province in which the system is to be installed.

(2) If a person has not been approved in the province where the storage tank system is to be installed, the installation must be supervised by a professional engineer.

(3) The owner or operator must keep a record establishing that the storage tank system was installed by a person referred to in subsection (1) or that the installation was supervised by a professional engineer.

30. (1) For the installation of any storage tank system, the owner of the system must use design plans, drawings and specifications of the system that bear the stamp and signature of a professional engineer.

(2) Upon the installation and before the first transfer of any petroleum products or allied petroleum products into any tank of the storage tank system, the owner of the system must ensure that as-built drawings are prepared, bear the stamp and signature of a professional engineer and show

31. (1) If the owner or operator of a storage tank system uses an oil-water separator in the operation of the system, the operator must

(a) each month, measure, as close to the baffle as possible, the thickness of the free oil layer and the separated solids layer and keep a record of those measurements with the date of measurement; or

(2) If the owner or operator becomes aware of a leak in the storage tank system or a spill, they must, without delay, measure the thickness of the free oil layer and the separated solids layer in the oil-water separator and keep a record of that measurement.

32. (1) If the owner or operator of a storage tank system uses an oil-water separator in the operation of the system, the operator must ensure that the oil-water separator's free oil layer is removed

(2) The owner or operator must ensure that disposal of the free oil layer removed occurs in a manner such that there will be no immediate or long-term harmful effect on the environment and the disposal will not constitute a danger to human life or health, and must keep a record of the quantity disposed of, the disposal method and the place where the layer was disposed of.

33. (1) If the owner or operator of a storage tank system uses an oil-water separator in the operation of the system, the operator must ensure that the oil-water separator's separated solids layer is removed

(2) The owner or operator must ensure that disposal of the separated solids layer removed occurs in a manner such that there will be no immediate or long-term harmful effect on the environment and the disposal will not constitute a danger to human life or health, and must keep a record of the quantity disposed of, the disposal method and the place where the layer was disposed of.

34. The owner or operator of a storage tank system must not use centrifugal-type pumps to transfer oil-contaminated water from dikes or sumps to the oil-water separator.

35. (1) The owner or operator of a storage tank system must ensure that disposal of water that accumulates in the bottom of any tank of the system occurs in a manner such that there will be no immediate or long-term harmful effect on the environment and the disposal will not constitute a danger to human life or health.

(2) The owner or operator of the storage tank system must keep a record of the quantity of any tank bottom water removed, the date of its removal, the name of the person removing it, the disposal method and the place where it was disposed of.

36. (1) For the purposes of paragraph 212(1)(a) of the Canadian Environmental Protection Act, 1999, the written report must contain the following information:

(d) the type of each petroleum product or allied petroleum product that is the subject of the report;

(e) the quantity of each petroleum product or allied petroleum product that is the subject of the report or, if the quantity cannot be determined, an estimate of that quantity;

(f) a description of the circumstances of the spill, if any, and any mitigating measures taken; and

(g) a description of the measures taken following the spill, if any, to prevent a subsequent occurrence.

(2) In the event of a spill of less than 100 L of a petroleum product or an allied petroleum product, the notification under paragraph 212(1)(a) of the Canadian Environmental Protection Act, 1999 is not required.

37. The owner or operator of a storage tank system may withdraw the system or any component of it from service

38. The owner or operator of a storage tank system that temporarily withdraws the system or any component of it from service must keep a record of the date on which they withdrew the system or component from service and must ensure that

(a) if the system is equipped with a cathodic protection system, the cathodic protection system is maintained and operated during the withdrawal;

(b) if the system has either underground tanks, other than vertically-oriented underground tanks, or shop-fabricated aboveground tanks and the system or its component has been out of service for more than one year, those tanks are tested for leaks using a leak detection test described in subsection 16(2) before the system or component is returned to service;

(c) if the system has field-erected aboveground tanks or vertically-oriented underground tanks and the system or its component has been out of service for more than one year, an internal inspection of those tanks is performed before the system or component is returned to service; and

(d) a label is affixed to the system's fill pipe stating that the system is temporarily out of service.

39. (1) The owner or operator of a storage tank system that permanently withdraws the system or any component of it from service must keep a record of the date on which they withdrew the system or component from service and must ensure that

(b) if a tank is being withdrawn from service, the tank is purged of vapours to less than 10% of the lower flammability limit and the presence of vapours is checked with a combustible gas meter; and

(c) 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 or health.

(2) The owner or operator of the storage tank system must affix a label to the system's fill pipe stating that the system is permanently out of service.

(3) The owner or operator must notify the Minister, either in writing or electronically, of the permanent withdrawal from service of a storage tank system or any component of a storage tank system within 60 days after the day on which it is permanently withdrawn from service.

40. (1) Subject to subsection (2), if a storage tank system or any component of a storage tank system is required to be removed under these Regulations, the owner of the system must have the system or the component removed by a person approved to do so by the province in which the system is located.

(2) If a person has not been approved in the province where the storage tank system is located, the owner must have the removal supervised by a professional engineer.

(3) The owner must keep a record establishing that the storage tank system or the component was removed by a person referred to in subsection (1) or that the removal was supervised by a professional engineer.

41. (1) Subject to subsection (2) and section 27, the owner or operator of a storage tank system that is required to record information or to keep a record under these Regulations must keep the information or record, as the case may be, at the owner's or operator's place of work nearest to the system for five years from the day on which that information was recorded or that record was made.

(2) The owner or operator of a storage tank system must keep the documents referred to in subsection 29(3) and section 30 until the system is removed.

42. The Federal Registration of Storage Tank Systems for Petroleum Products and Allied Petroleum Products on Federal Lands or Aboriginal Lands Regulations (see footnote 6) are repealed.

43. (1) These Regulations, except paragraphs 25(a) and (b), come into force on the day on which they are registered.

(2) Paragraphs 25(a) and (b) come into force two years after the day on which these Regulations are registered.

NOTE: The CGSB standards are established by the Canadian General Standards Board.

5. Type of petroleum product or allied petroleum product stored in each tank of the storage tank system

6. Location of the storage tank system (civic address or, if no civic address exists, Global Positioning System (GPS) coordinates or latitude and longitude)

7. Civic address of the location where the storage tank system records are stored

23. Description of petroleum product and allied petroleum product transfer areas

3. Total number of storage tank systems owned by the owner, if known, or an estimate of the total number of storage tank systems so owned

4. Name of operator of each storage tank system, if different from owner and if known

6. Location of each storage tank system, if known (civic address or, if no civic address exists, Global Positioning System (GPS) coordinates or latitude and longitude)

7. If the owner owns more than one storage tank system, the number of storage tank systems that have been identified in accordance with paragraph 24(1)(a) of these Regulations

8. A description of the measures being taken to collect the information respecting the storage tank systems remaining to be identified and a description of challenges that could be encountered in the course of identifying those systems, if any

Section 64 of the Canadian Environmental Protection Act, 1999 defines a substance as “toxic” if it is entering or may enter the environment in a quantity or concentration or under conditions that have or may have an immediate or long-term harmful effect on the environment or its biological diversity, constitute or may constitute a danger to the environment on which life depends, or constitute or may constitute a danger in Canada to human life or health.

Treasury Board of Canada Secretariat, 2002. The Federal Contaminated Sites and Solid Waste Landfills Inventory.

The results are summarized in the report entitled Development of a Costing Model for the Implementation of the Proposed Federal Petroleum Products and Allied Petroleum Products Storage Tank Systems Regulations – Focus on 8 Federal Departments/Agencies.

Environment Canada elected to employ the more recent inventory data provided directly by INAC rather than the EMS-obtained INAC data.

This study entitled "The current Status of Provincial Regulatory Enforcement Practices Regarding Fuel Storage Tanks on Federal Entities."