Under section 8(a) of the Toxic Substance Control Act (“TSCA”), the U.S. Environmental Protection Agency requires “manufacturers” to provide periodic updates to the national inventory of chemical substances (the “TSCA Inventory”). A number of gas processors have reported butane, ethane, propane, sulfur, and other substances under previous Inventory Update Rule (“IUR”) cycles.[1] Since the last reporting cycle, however, shale gas development has increased dramatically, and EPA has tightened certain thresholds. This combination suggests that more gas processing sites will be subject to reporting than in previous cycles.
An August 2011 Chemical Data Reporting (CDR) Rule sets out the requirements for the current cycle.[2] The CDR applies to any person who either manufactures (including as a byproduct) or imports a chemical substance for commercial purposes where that substance appears on the TSCA Inventory.[3] The threshold for reporting is 25,000 pounds. [4] The reporting time frame established for the 2012 reporting year is February 1 to June 30, 2012.[5] The EPA has said that it will not provide extensions for reporting and incorrect or incomplete information could lead to violations and enforcement actions leading to fines or other penalties.[6] The CDR replaces the IUR and contains far more stringent reporting requirements. The important changes to keep in mind for the 2012 reporting year are:
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Submitters are required to report electronically to EPA’s Central Data Exchange (CDX) using its web-based reporting tool - e-CDRweb. Before they can report, submitters must register with the CDX. Users of CDX have reported that registration and submittal has not gone smoothly; thus, prudent operators will not wait until the deadline to initiate this step.[7]
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The CDR has multiple levels of reporting. While all affected entities must provide identification and exposure-related information, manufacturers and importers of larger volumes must also provide more detailed processing and use information. In the CDR, EPA reduced the threshold for these additional obligations from 300,000 pounds to 100,000 pounds.[8]
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Submitters must include the production volume for 2010 and 2011 even though 2011 is the principal reporting year.[9]
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EPA replaced the “readily obtainable” reporting standard used for processing and use information with “known to or reasonably ascertainable by” reporting standard, thus increasing the likely level of required effort to collect information for reporting.[10]
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EPA also modified certain manufacturing data elements; for example, manufacturers are now required to
report:[11]
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the name and address of the U.S. parent company; o the current Chemical Abstracts (CA) Index Name, as used to list the chemical substance on the TSCA Inventory, as part of the chemical identity;
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the volume of a manufactured (including importer) chemical substance used at the reporting site;
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whether an imported chemical substance is physically present at the reporting site;
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the volume directly exported and not domestically processed or used; and
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when a manufactured chemical substance, such as a byproduct, is being recycled, remanufactured, reprocessed, or reused.
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EPA now requires upfront substantiation from a company to claim that processing and use information is confidential business information.
The new reporting requirements for 2012 will be time consuming. To determine whether a company is required to report, the company must first determine whether the chemical substances it manufactured or imported in 2011 in the U.S. are subject to the CDR Rule. For the 2012 submission period, manufacturers and importers are required to report under the CDR rule if they manufactured or imported a chemical substance that was listed on the TSCA Inventory during 2011; the chemical substance is not otherwise exempt; and the chemical substance was manufactured or imported in a volume of 25,000 pounds or more.[12]
Some operators may qualify for full exemptions, absolving the operator from any reporting requirements. Specifically, certain forms of natural gas are exempt from reporting.[13] Operators should consider whether any of their chemical substances are included in the six CASRNs numbers listed in the regulation. Additionally, an operator who qualifies as a small manufacturer is completely exempt from reporting.[14] There are other exemptions that may apply to the oil and gas sector at least in part; however, they are only partial exemptions and do not absolve the potential submitter of an obligation to submit manufacturing and production volume information.[15]
In addition to basic identifying information, affected manufacturers and importers must provide chemical-specific information for CDR reportable chemical substances manufactured in 2011.[16] This includes, among other requirements, reporting of the total annual volume in pounds for each reportable chemical substance and then the total annual volume imported and, separately, total volume manufactured; a statement indicating whether the chemical substance is being “recycled, remanufactured, reprocessed, reused, or otherwise used for a commercial purpose instead being disposed of as waste”; the total number of workers likely to be exposed to the chemical substance at each site; and the maximum concentration, measured by percentage of weight when the chemical substance is sent off-site or when it is reacted on-site to produce a different chemical substance.[17] Chemical-specific information for CDR reportable chemical substances manufactured in 2010 includes only the total annual volume domestically manufactured or imported for each reportable chemical substance at each site during 2010.[18] Note that this provision requires a submitter to report the total volume in 2010 for those chemical substances that reached the 25,000 pound threshold in 2011.
As noted above, submitters who manufactured or imported above the 100,000 pound threshold must also report process and use information.[19] This includes, among other requirements: (1) a designation indicating the type of industrial processing and use operations at each site that received the chemical substance from a submitter in 2011; (2) a code indicating the industrial sector that best describes industrial activities associated with each industrial processing or use from the codes provided by EPA in the regulation;[20] (3) for each sector, the code that best describes the manner in which the chemical substance is used from the codes provided by the EPA in the regulation; and (4) the total production volume rounded to the nearest 10% of each reportable substance associated with each combination of industrial processing or use operation, sector, and industrial function category.[21] Potentially affected operators should assess the rule carefully to understand these and the other required data elements, as many will require time-consuming effort to collect.
Operators should also consider whether they can avail themselves of one or more of the partial exemptions to the 100,000 pound processing-and-use threshold that could apply to the oil and gas sector. The first is the petroleum process streams exemption and the second is the low current interest exemption.[22] 40 C.F.R. § 711.6(b)(1) contains a table of CASRNs for chemical substances that are considered petroleum process streams. For example, liquefied petroleum gas is listed as a partially exempt chemical substance and is manufactured as a byproduct in natural gas purification and oil refining. If an operator manufactured one of the chemical substances listed in the table in 2011, for that substance, the operator is only required to report manufacturing and chemical-specific information. It is not required to report the processing and use or consumer and commercial use information. The low current interest exemption also contains a table of CASRNs for chemical substances that are considered to be of low interest to the EPA. Again, if an operator manufactured one of the chemicals substances listed in the table, it is only required to report manufacturing and chemical-specific information.
In this article, we have attempted to outline and highlight the current CDR to guide operators in evaluating whether they will need to report. With the June 30th reporting deadline fast approaching, we encourage operators to evaluate their reporting obligations as soon as possible.
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