Fuel spills and other releases of hazardous or regulated materials, even in small quantities, can turn into expensive incidents for the spill generator who is not adequately prepared to deal with them. Nearly 30,000 federal, state and local jurisdictions across the U.S. require spill generators to file incident reports within a stated time or face hefty fines for failure to comply.

Environmental authorities take their reporting requirements very seriously. It’s important to remember that insurance companies do not pay fines and penalties arising from failure to report spills or for late reporting. There are a number of remedies and things you can do to reduce the costs associated with spills.

Some jurisdictions offer alternatives to payment of fines. The Massachusetts Department of Environmental Protection, for example, offers a special enforcement settlement known as a Supplemental Environmental Project (SEP), which can reduce the amount of a penalty. SEPs are agreements to perform activities which provide an increased level of environmental protection.

A truckload carrier that filed a late report after a diesel spill incident in Carlton, Mass., proposed a SEP to reduce a late-notification infraction of $11,500. During an enforcement conference, the carrier proposed installing an on-board spill reporting system on its trucks. The system enables a driver to fill out a pre-formatted electronic spill message and transmit it directly from the cab to provide the carrier and authorities with rapid notification and details of a spill.

The proposal was accepted by the DEP, calling it an innovative way to sound the alarm after a spill, since faster response is definitely better for the environment. And as a result, the fine was reduced significantly.

Don’t hesitate to bring in your own expert. You can challenge an official finding based on scientific evidence, as in this example of a tank truck accident which spilled about 4,000 gallons of methanol-based cleaning compound into a creek. The associated costs would have been $305,000 higher if the carrier had accepted the initial finding of a state Department of Environmental Quality agent.

The agent initially ordered that the water in the creek and a nearby pond be drained and scraped. That scope of work would have involved a large amount of equipment and personnel along with disposal of large quantities of soil and liquids, costing in the hundreds of thousands of dollars. A local consultant who was retained on behalf of the carrier determined that the methanol compound would evaporate and degrade within eight days – with no residual left behind.

Based on this information, the DEQ agreed to a less aggressive approach comprised of remediation of gross soil contamination and sampling of soil and surface water to confirm that the compound had degraded. Within two weeks of the incident, sample results confirmed that the contamination was below regulatory standards.

Get a second opinion before agreeing to costly disposal. Another spill involved 85 drums of hazardous waste that caught on fire after a collision between two tractor trailers. A large quantity of the waste was discharged into the soil. The contractor had classified the soil as the type of hazardous waste which required pretreatment prior to disposal through incineration, which is a costly process.

Before committing to that, a consultant was retained to provide a second opinion. The contaminated soil was sampled again to determine if it could be re-classified for disposal. The findings showed that the soil could be disposed of locally, bringing the cost down significantly. The difference in the lower disposal rate per ton created a cost savings of $388,035 for the carrier.

On top of those savings, transportation for disposal was reduced from $4,150 per load to $2,367 per load because the soil could be brought to a closer facility. Finally, upon review of the cleanup contractor invoicing, it was found that a fuel surcharge was applied across the entire costs of the initial invoice. Additional negotiations reduced this amount as well, for a total cost savings of $453,509 for the client. It was a case of knowing which questions to ask and knowing the environmental regulations of that particular jurisdiction.

Know the regulations and file required reports on time. That is the key to staying out of trouble with the authorities. One private fleet was fined $75,000 by the N.J. Dept. of Environmental Protection after a routine diesel fuel spill of 30 gallons. The driver stopped the flow from the punctured saddle tank, and the company filed a full accident report with the N.J. State Police.

But the fine came from the failure to comply with the state's environmental reporting requirement. The police had not mentioned the requirement; and the company thought it had done everything required of it. Avoid this situation by learning the reporting requirements of every jurisdiction your trucks travel through.

Fines and penalties for non-compliance with reporting regulations vary from one jurisdiction to another, and the potential for multiple jurisdictions with separate reporting requirements exists in every incident. A spill in one of the five boroughs of New York City, for example, requires that reports be made to county, state and federal authorities – plus to the NYC Dept. of Environmental Protection. Failure to make the city report, can cost $25,000 a day, with each day being a separate violation.

Take an active role in managing the spill site to avoid over reaction by authorities. A carrier in Pennsylvania ended up with demands from two fire departments for reimbursement totaling $14,346 after they responded to a minor diesel fuel spill. They brought 28 emergency personnel to the scene of the spill, which by the driver's calculation of miles traveled since his last fill-up, amounted to only 5 or 6 gallons of diesel fuel remaining in the tank.

From a practical standpoint, most jurisdictions don't respond to spills that small. Yet fire departments have a right by law to be compensated when called by police at accident scenes. Avoid this situation by advising the officer on the scene about the small quantity of fuel involved and emphasizing that a major response by emergency personnel is not needed.

The best way to maintain a legally defensible position after a spill against third-party claimants and avoid being included as a responsible party to a pre-existing contamination problem is to maintain thorough documentation of every environmental release. A detailed log of all actions taken after a spill should be kept to document that the release was separate in time, separate in nature and was the subject of a separate and complete response and remediation.

A driver involved in a fuel spill should record the quantity spilled based on the last fueling and miles driven, times and phone numbers of calls he made to report the incident, actions he took to contain the leak, actions taken by emergency responders at the scene, number of responders, time on scene and equipment used. That driver's log will provide a written record that can be used to place the company in a legally defensible position.

Check invoices to verify that all charges are reasonable. Contractors, emergency responders and other service providers are known to make mistakes and even knowingly inflate charges on their invoices for services. Closely assess all charges to confirm that they are in line with charges for the same items from other contractors or service providers. Using the services of a third-party auditor can pay off by reducing the costs related to the incident.

In the case of a fire department demanding reimbursement, as we discussed in last month’s webinar, don’t hesitate to request a copy of the ordinance that authorizes the department to bill spill generators for costs. Not all have the legal authority to seek reimbursement from you. Counsel can determine that for you and evaluate incomplete documentation on invoices.
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To learn more about Spill Center spill support and environmental claims management services, visit www.spillcenter.com; call Tom Moses directly at 978-568-1922, X222; or e-mail him at TMoses@SpillCenter.com