Texas Storage Tank Owners: Are You Prepared for SB 900?

Introduction

In August 2017, Hurricane Harvey hit Texas with over 40 inches of rain in a matter of days, causing massive flooding. The local impact was felt by most people and industries, including owner/operators of aboveground storage tanks (ASTs). In fact, multiple ASTs failed for various reasons that include flooding, lack of containment, and loss of power. These failures resulted in environmental contamination and injuries to the community and first responders who were exposed to the various substances released.

Fast forward to March 2019, a major incident occurred at a tank farm in Deer Park, Texas. Multiple tanks caught fire and burned for days. Locals were forced to shelter in place, and ultimately the Houston ship channel was forced to shut down due to a spill related to the incident.

The upshot to this is that the Texas legislature unanimously passed Senate Bill 900 (SB 900) which mandates that ASTs with a capacity of over 21,000 gallons must protect the ground and surface water of Texas “by adopting requirements for the design, construction, operation, and maintenance of storage vessels, with the objective of protecting groundwater and surface water resources in the event of accidents and natural disasters.” This legislation goes into effect in September 2023 and falls under the umbrella of the Texas Commission on Environmental Quality (TCEQ). While there are states that do not regulate their ASTs in this way, conventional wisdom says that they will end up in the same place as Texas.

What Does SB 900 Mandate?

Once in effect, AST owners must comply with:

• American Petroleum Institute (API) Standard 653 “Tank Inspection, Repair, Alteration, and Reconstruction” for inspection requirements and frequency
• API Standard 2350 “Overfill Prevention for Storage Tanks in Petroleum Facilities” for overfill prevention systems (including assessment protocols)
• National Fire Protection Association (NFPA)-30 “Flammable and Combustible Liquids Code” or API Standard 2001 “Fire Protection in Refineries” regarding fire suppression for products with a flashpoint of over 100°F
• New tanks must also comply with API Standard 650 “Welded Tanks for Oil Storage” and NFPA-30 location standards

These new regulations will impact an estimated 36,000 currently unregulated tanks in Texas, many of which have not been the subject of review, and thus may require a host of interventions. Asset owners have until September 1, 2027, to register their tanks and be in compliance with all parts of SB 900—including inspecting their tanks—no later than September 1, 2037.

SB 900 mandates that employees of TCEQ “shall conduct on-site inspections of the registered/certified facilities at least once every five years to determine compliance.” While the exact amount of fines for non-compliance is not known, you can expect them to be significant. For example, for assets regulated by the Federal Pipeline and Hazardous Materials Administration (PHMSA), the maximum fine is over $200,000 per day per violation with a limit per day for a related series of violations set at $2,000,000.