Massachusetts SJC: MassDEP's Oil Exemption Does Not Apply to Gasoline Additive
By: Gregory J. May
The Massachusetts Department of Environmental Protection's ("MassDEP") "oil exemption" regulation relieves "oil" cleanups from certain regulatory requirements. On June 6, 2016, the Massachusetts Supreme Judicial Court ("SJC") upheld MassDEP's determination that an oil company must continue remediation efforts because of lead found on the site as a result of leaded gasoline released from the company's service station prior to 1994. See Petersborough Oil Co. v. Dep't of Environmental Protection, SJC-11851 (June 6, 2016).
MassDEP promulgated the oil exemption regulation in 2007 to modify cleanup requirements under the Massachusetts Contingency Plan ("MCP") and the Massachusetts hazardous waste cleanup statute, Mass. Gen. Laws Chapter 21E. The oil exemption applies to Zone II releases near public water supplies. Zone I is the area within a radius immediately surrounding the water supply. Generally speaking, a Zone II radius covers a larger area to address potential risks to public water supplies that could be caused by extreme conditions. MassDEP drafted the oil exemption because it found that petroleum hydrocarbons did not tend to contaminate a water supply if released within a certain radius of the supply wellhead.
Under the oil exemption, MassDEP assumes there is no risk that unacceptable levels of "oil," which it has interpreted as "naturally occurring petroleum hydrocarbons," will contaminate a public water supply from a spill within a Zone II radius (assuming other conditions are met). Zone II cleanups of petroleum hydrocarbons are therefore subject to less stringent requirements under the MCP.
The question for the SJC was whether a fuel additive such as lead which is mixed with petroleum hydrocarbons falls within term "oil." Although Chapter 21E broadly defines "oil" to include any type of fuel oil, crude oil or partially soluble fuel oil, the statue also excludes materials identified as "hazardous substances" under the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). Because lead is included as a "hazardous substance" under CERCLA, the SJC reasoned, lead must be excluded from the Chapter 21E definition of "oil."
However, the SJC found that Chapter 21E was ambiguous as to what happens when a "hazardous substance" such as lead is mixed with exempted "oil." The SJC refused to rely on CERCLA's "petroleum exclusion," which courts have applied to exempt leaded gas from federal cleanup requirements. Relying instead on Chapter 21E's mandate to "compel the cleanup of hazardous material," the SJC opined that interpreting leaded gasoline entirely as an "oil" would stretch the meaning of the oil exemption to the point that it would "become virtually a nullity." According to the SJC, such an expanded definition would mean that any hazardous material mixed with oil would receive less stringent treatment and thereby "eviscerate the legislative purpose."
The SJC also reviewed the drafting history of the oil exemption and found support for its holding in MassDEP's studies and final determination that petroleum hydrocarbons, by themselves, are unlikely to contaminate public water supplies when released within a Zone II radius of the supplies (i.e., GW-1 areas).
The SJC's ruling confirms MassDEP's longstanding position on the issue. MassDEP will very likely view the decision as applying to all fuel additives, including MTBE.
Wendy Wilkie Parker
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