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Pipeline tanks and the transportation exemption in Title III

An oil corporation's pipeline facility contains three kinds of tanks.  One type is a breakout tank used to receive and store hazardous liquids transported by a pipeline for reinjection and continued transportation by the corporation's pipeline.  Another type is used to receive and store hazardous liquid for delivery to pipelines owned by another corporation.  The third type of tank receives and stores hazardous liquids for delivery to tank trucks and other modes of transportation.  Would any tanks be covered by Section 327, the transportation exemption to Title III?

Section 327 of EPCRA exempts from any Title III reporting requirement (other than the Section 304 notification obligation) substances or chemicals in transportation and/or being stored incident to transportation, including the transportation and distribution of natural gas.  In a final rule promulgated April 22, 1987 (52 FR 13378), the Agency interpreted this provision to exempt from Title III reporting the transportation of substances in pipelines.  The Agency stated, "Title III does not apply to the transportation of any substance or chemical, including transportation by pipelines, except as provided in Section 304."  As Title III does not itself define "pipeline," the Agency will refer to the definition found in regulations implementing the Hazardous Materials Transportation Act (HMTA) and promulgated by the Department of Transportation (DOT).  EPA believes the HMTA to be appropriate as a reference because of Congress' explicit reference to that Act in the legislative history referring to Section 327 transportation exemption.  In the Conference Report, Congress stated that limiting the exemption for storage incident to transportation to those chemicals under active shipping papers was consistent with the HMTA.  DOT regulations implementing the HMTA define "pipeline" as "all parts of pipeline facility through which a hazardous liquid moves in transportation, including, but not limited to, line pipe, valves and other appurtenances connected to line pipe, pumping units, fabricated assemblies associated with pumping units, metering and delivery statings and fabricated assemblies therein, and breakout tanks" under 49 CFR 195.2.  "Breakout tanks" in turn, are defined under these same regulations as a "a tank used to (a) relieve surges in a hazardous liquid pipeline system or (b) receive and store hazardous liquid transported by pipeline for reinjection and continued transportation by pipeline."  DOT includes the first two types of tanks within its definition of "pipeline" but not the third type of tank.  The first type of tank is a breakout tank (49 CFR 195.2) and as such is part of the pipeline regulated by DOT.  The second and third types of tanks are examples of delivery stations.  The delivery station which injects the hazardous substance into someone else's pipeline is part of the "pipeline" under DOT regulations.  The delivery station which delivers the hazardous substance to other modes of transportation is called a terminal and is not included within the DOT definition of pipeline.  Terminals are thus not covered by the transportation exemption in Section 327 of EPCRA.  The transportation exemption would apply to the substances in the first two types of tanks and they would be exempt from all of Title III except Section 304.  The substance in the third tank would not be covered by the transportation exemption and the facility owners and/or operator would be required to comply with EPCRA, as appropriate.  Section 327 of Title III exempts substances from the requirements of the Title III, except Section 304, if those substances are in transportation or are stored incident to transportation.