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Focus: Environment & Planning – June 2008

New regulations governing underground petroleum storage systems in NSW

In brief: The Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2008, which commenced on 1 June 2008, introduces a range of measures designed to regulate the underground storage of petroleum so as to minimise the risk of the discharge of substances that cause significant damage to the environment. Partner Paul Lalich (view CV) and Paralegal Madeleine Ellicott report.

How does it affect you?

  • The Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2008 affects owners and operators of both new and old underground petroleum storage systems (UPSS).
  • Owners and operators of UPSS will now be legally required to conduct regular checks for leaks in the fuel tanks and pipes used to store and handle petroleum products, and also to meet minimum standards in environmental management of UPSS.

Outline of reforms

Introduction

Until now, there has been no legal requirement imposed on UPSS owners and operators to discover if it is leaking and causing damage to the environment or human health. Leaking of UPSS is a very common and significant source of soil and surface groundwater contamination. According to the draft guidelines for implementing the Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2008 (the Regulation) issued by the New South Wales Department of Environment and Climate Change (DECC), the objectives of the Regulation are:

  • to reduce the environmental risks and harm from leaking UPSS;
  • to provide a mechanism to ensure early detection of leaks; and
  • to ensure the implementation of an appropriate operational management system for consistent record-keeping, investigation and reporting of leaks.1

Under the Regulation, it will be illegal to continually allow or ignore contamination resulting from a leaking or faulty UPSS.

To whom will the legislation apply?

The Regulation will apply to all underground petroleum storage systems in NSW, defined as including 'one or more tank(s) which are completely or partially buried in the ground and contain, or are intended to contain, petroleum'. This may potentially include service station sites, fuel terminals and depots, commercial and industrial premises, local council depots, airports and marinas.

The Regulation will apply to anyone classed as a 'person responsible' for a UPSS, which is the person who has management and control of the storage system. Depending on the circumstances, this could mean the owner, lessee or operator of a UPSS.

The DECC will be the appropriate regulatory authority until 2012, when the role will pass to appropriate local authorities.

What are the requirements?

The legislation differentiates between requirements for new and old UPSS. New UPSS are those that received planning approval after 1 June 2008. Old UPSS are those for which planning approval was granted before 1 June 2008, or where installation had commenced or the system had been commissioned before this date.

The synopsis provided by the DECC on their website states that the person responsible for a new UPSS will be required to have in place a number of systems, including:

  • a system for detecting and monitoring leaks;
  • groundwater monitoring wells at sensitive locations and a testing program;
  • an Environment Protection Plan for the facility; and
  • those in place for record keeping, reporting of leaks and notifying the local council where a UPSS has been decommissioned.2

Old UPSS will also be required to comply with these provisions; however, the Regulation allows for transitional periods that will be phased in after the legislation becomes operational. For example, adoption of an Environment Protection Plan will not be required for up to 12 months, and installation of certain pollution control equipment will not be required unless a 'significant modification' is being undertaken.

Exemption Plan

There is also an Exemption Plan under the legislation whereby owners/operators may be exempt from meeting one or more requirements under the UPSS regulation. This is intended mainly to apply to the operations of old UPSS where it can be demonstrated that the UPSS site is not contaminated and appropriate systems are in place to ensure any leak or spill from the system will not pose health or environmental risks. Also, exemptions may be granted for new UPSS where similar criteria are met.

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Implications of reforms

This Regulation represents an attempt by the legislature to deal with the substantial environmental risks posed by leaking petroleum products. Significant requirements are imposed on owners and operators of UPSS to take responsibility for managing the safety of their petroleum storage systems. While this may increase maintenance costs, the requirements may avoid expensive, time-consuming and difficult remediation at a later stage, and have the potential to improve industry competition by ensuring a consistent level of equipment standards and management practices across NSW.

Footnotes
  1. Draft Guidelines for implementing the Regulation, Department of Environment and Climate Change NSW.
  2. Department of Environment and Climate Change synopsis, Underground Petroleum Storage Systems (current as at 7 May 2008).

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