Oil and Natural Gas

Industry Preparedness Handbook

October 2013

To learn more, please visit www.api.org

Produced by the American Petroleum Institute

1220 L St NW, Washington, DC
With support from:
American Gas Association

NATSO

American Fuel and Petrochemical

Manufacturers

Petroleum Marketers Association of

America

International Liquid Terminals

Association

SIGMA

Interstate Natural Gas Association of

America

Version 2.0
September 30, 2013

Contents

Introduction to the Oil and Natural Gas Strategy...................................................... 5

Oil and Natural Gas Industry Preparedness and Response Strategy...................... 6

Supporting Information

Energy Supply Chains

An Introduction to Energy Supply Chains............................................................... 9
Oil Supply Chain.................................................................................................. 10
Natural Gas Supply Chain.................................................................................... 11

National Response Coordination

Utilizing the National Response Framework.......................................................... 13
ESF 12 Information Flow: Public-Private Process................................................. 14
Oil Industry Infrastructure Assessments (ESF 12)................................................. 16
Natural Gas Industry Infrastructure Assessments (ESF 12)................................... 17
Government and Oil Industry Engagement (ESF 12)............................................. 18
Government and Natural Gas Industry Engagement (ESF 12).............................. 19

Preparing at the State and Local Levels

Introduction to Preparing for a Crisis at the State and Local Levels...................... 21
Preparing for a Crisis at the State and Local Levels.............................................. 22

Potential Waivers
Introduction to Potential Waivers to be Requested During an Inciden................... 27
Potential Government Regulation Waivers............................................................ 28
Potential Government Waivers and the Oil Supply Chain...................................... 33
Potential Government Waivers and the Natural Gas Supply Chain........................ 34

Oil and Natural Gas

Preparedness and
Response Strategy
Oil and Natural Gas Industry Preparedness Handbook

Introduction to the Oil and

Natural Gas Strategy
The oil and natural gas industry has created the following strategy document to ensure that roles, responsibilities
and needs are clearly identified prior to any events that may affect the integrity of oil and natural gas systems.
The oil and natural gas industry has long maintained and been acknowledged for its serious commitment to
the safety of infrastructure, workers and processes. Disruptive events, whether manmade or natural, should
be approached with the same commitment to safety, resilience and the needs of the community. Therefore,
the following strategy approaches preparedness and response from the local level, acknowledging that events
impact workers, businesses and communities first and foremost. While resources and information are often
held at the regional or national level, it is the facility operators and those on the ground who will have the best
ability to assess their systems, identify needs, and execute the work needed to restore services. This strategy
lays out how local responses can be aided by State and regional associations, established relationships with
governments and communities, and how corporate and federal relationships and capabilities can facilitate
efficient response and recovery at the local level.

Oil and Natural Gas Industry Preparedness Handbook 5

Oil and Natural Gas Industry Preparedness

and Response Strategy
Recent disruptive events affecting U.S. oil and natural gas infrastructure and operations, including 2012s
Hurricane Sandy, have prompted the U.S. oil and natural gas industry to revisit and clearly define the strategy we
use to prepare for and respond to all hazards. The following describes the priority actions of the industry, which
have been, are being and will be taken to promote communication and information sharing in preparation for all
events, both natural and manmade.
As a preface to this discussion of industrys strategy, it is the industrys position that incidents, whether
anthropogenic or natural should be managed by local and State governments, under the construct of the
National Response Framework (NRF). While the Federal government can have a role in a response, its
involvement should take place only when local and state governments request it, and then their efforts should be
in support of the State and local response activities. It is also industrys position that, as indicated in Presidential
Policy Directive 8, the Department of Energy (DOE) is the lead coordinator and primary agency for Emergency
Support Function (ESF) 12 - Energy during events, and activities and requests for information that involve the oil
and natural gas industry should happen in coordination with DOE.
During any incident, there are many requests for information from owners and operators who are simultaneously
attempting to restore services and infrastructure. Requests originate from all levels of government which are
attempting to serve the needs of their constituencies by prioritizing resources, services and access to critical
supplies. Crude oil, the products derived from crude (e.g. gasoline, lubricants, etc.), and natural gas, enable
many of the critical services which support response and restoration. As such, having effective communication
and informed stakeholders can facilitate more effective restoration of industry services and result in a more
efficient recovery. However, there are challenges to effective communication across the complex oil and natural
gas sector. These can include understanding the variety and volume of information requests from stakeholders
during the course of recovery and the competing interests and priorities of governments, owners and operators
and other stakeholders. Industry believes that effective communication and education across all stakeholder
groups, beginning with our government partners, is the most efficient use of resources and will provide the
greatest return for our nation.
Specifically, the industry believes that with regard to incidents involving the oil and natural gas infrastructure
and systems, a two-phased approach implemented prior to, during, and after an event will ensure an efficient
response and recovery of the affected systems.

Phase I Educating Stakeholder Groups

Ensuring that stakeholders throughout the response community and across Federal, State and Local
governments are knowledgeable of the oil and natural gas system is critical to the effective and efficient flow
of information between the private and public sectors. Education must occur on a consistent basis to ensure
decision makers have an informed understanding of the policy and operational differences amongst the
diversity of fuels and how they are transported, the primary challenges and limitations industry faces during
an event, and the processes and means in place to respond and restore critical services. The means to
accomplish this include:

Oil and Natural Gas Industry Preparedness Handbook 6

 Utilizing and disseminating materials, such as oil and natural gas delivery supply chains, to educate
stakeholders.
Holding regular educational sessions with decision makers and critical stakeholder groups on a consistent
basis (regardless of events) to explain the oil and gas systems, markets and critical functions.
Utilizing existing relationships and mechanisms to ensure channels of communication are open and
effective.
Identifying key staffing changes within stakeholder groups that warrant an education of the complexities of
oil and natural gas systems.

Phase II Formalizing Processes of Communication and Information Sharing

The dynamic nature of incidents often leads to communication and information sharing based on relationships
rather than processes. This is particularly evident when robust processes and procedures have not been codified
and exercised. A dependency on personal relationships can be beneficial as established relationships generally
yield better communication but this dependency can also contain significant risk. The assumption that the
two individuals in the relationship are always available (i.e. have not taken on a new job or are not themselves
impacted by the incident), is one that is often cannot be guaranteed. Therefore, formalizing a process based on
position or rolefrom which relationships can growwith government partners and partners in the field who will
be participating in a response will support effective and appropriate information sharing during an event. Most
importantly, formalizing processes will give both industry and government agreed upon mechanisms to avoid
multiple requests for information/assistance from multiple parties. Thus, the oil and natural gas industry and its
associations will:
Work with local and State-based industry organizations to identify industry roles and responsibilities
before, during, and after an event.
Facilitate effective communication between key government representatives and company/facility
representatives. Again, the local organizations will play a pivotal role in this effort.
Develop processes to facilitate information sharing between impacted facilities and governments at the
local level.
Utilize existing exercises and drills, which occur regularly throughout the sector, to understand and
institutionalize the processes and procedures that have been recognized and accepted by response
partners.
Industry has provided guidance (see section: Preparing at the State and Local Levels) to its local partners to
prepare them and their constituents for the impacts of events before they occur. This guidance reaffirms how
the partners can form the essential processes and relationships, understand the varied needs and wants of
members and governments, and exercise both to understand the complexities of response before an event
impacts a States or a regions critical energy infrastructure. A concerted effort by the local organizations and their
constituents can help establish a baseline of education for stakeholders regarding the structure of the oil and gas
industry, the requirements for basic operations, and the functions of markets. The end result, if a disruptive, future
event occurs, will be a stronger and more effective partnership between industry and stakeholders at the local
and state levels to improve resilience, and ultimately enable a more efficient restoration.

Oil and Natural Gas Industry Preparedness Handbook 7

Energy
Supply Chains

Oil and Natural Gas Industry Preparedness Handbook

An Introduction to
Energy Supply Chains
The following graphics provide an overview of the oil and natural gas supply chains. Oil and natural gas is a
key resource to the Nation, providing the energy needed to not only heat homes in the winter and cool them in
the summer but also the fuel that powers private and commercial activities such as domestic truck fleets and
emergency response vehicles. The diversity and complexity of these systems is often difficult to explain and
understand, particularly when incidents occur and context is critical to effective decision making. These oil and
natural gas system models provide simple but relatable visual descriptions of these critical systems, their major
components, and the critical customers and services which are dependent on this energy. Recognizing the
critical components and their placement in the system provides the context to understand the consequences to
both upstream and downstream of an impacted component of the fuel supply system.

Oil and Natural Gas Industry Preparedness Handbook 9

Oil and Natural Gas Industry Preparedness Handbook 10

Oil and Natural Gas Industry Preparedness Handbook 11

National Response
Coordination

Oil and Natural Gas Industry Preparedness Handbook

Utilizing the National Response

Framework
During the response to an incident of National significance there are many needs and requests that need
to be filled by governments, as well as by the private sector. Effective response requires the most efficient
delivery of resources and information to ensure populations are secured and critical services are provided in a
timely manner. The National Response Framework, the Incident Command System, and the recently released
Presidential Policy Directive 8: National Preparedness (PPD 8), provide the frameworks and processes that
should be utilized by all stakeholders in an event. The challenge is effectively communicating and operating within
these structures when an event occurs and demands are being made across organizations and communities
in the heat of the moment. The following graphic represents how industry understands the flow of information is
supposed to work under the current framework.
Industry expects this process to work for incidents both small and large, and regardless of location. We have
seen this process work effectively in the Gulf States, where significant elements of the oil and gas industry are
located and where hurricanes and other large storms often affect operations. Industry stresses the importance
of utilizing existing, tested structures and processes that Federal, State and local governments have created,
exercised and implemented within their response and emergency management organizations.

Oil and Natural Gas Industry Preparedness Handbook 13

Oil and Natural Gas Industry Preparedness Handbook 14

Explanation of Acronyms
ESF

Emergency Support Function

ESFs provide the structure for coordinating Federal interagency support to an incident. They are
mechanisms for grouping functions most frequently used to provide Federal support to States, both for
declared disasters and emergencies under Stafford Act and non-Stafford Act incidents.

EOC

Emergency Operations Center

A central command and control facility responsible for carrying out the principles of emergency
preparedness and emergency management functions. EOCs integrate into the Incident Command
System (ICS) during large-scale events. EOCs operate at the local, state and federal levels.

JFO

Joint Field Office

A component of the Incident Command System (ICS). Federal support to States is generally
coordinated through a Joint Field Office (JFO). The JFO provides the means to integrate Federal
resources and engage the impacted State(s) during an emergency. Senior officials from the State and
key Federal departments form a Unified Coordination Group w/i the JFO to achieve shared objectives.

NICC National Infrastructure Coordinating Center

A component of the NOC. The NICC is an information and coordination hub that maintains situational
awareness of the nations essential Critical Infrastructure (CI). The NICC shares threat information, in
order to reduce risk, prevent damage, and enable rapid recovery of CI assets from incidents caused by
natural disasters, attacks, or other emergencies.
NOC

National Operations Center

The NOC coordinates information sharing to help deter, detect, and prevent terrorist acts and to
manage domestic incidents. Information on domestic incident management is shared with Emergency
Operations Centers at all levels through the Homeland Security Information Network (HSIN).

NRCC National Response Coordination Center

A component of the NOC. The NRCC is a multiagency center that coordinates the overall Federal
support for major disasters and emergencies, in support of operations at the regional-level. The FEMA
Administrator, or his/her delegate, activates the NRCC in anticipation of, or in response to an incident.
The NRCC activates and manages the appropriate Emergency Support Functions during an incident.
NRF

National Response Framework

The National Response Framework (NRF), a component of the National Strategy for Homeland
Security, guides the Nation in how all-hazards responses are coordinated and conducted by providing
the structure and mechanisms for incident response in a national level policy. The NRF builds upon
the scalable, flexible, and adaptable Incident Command System (ICS) structure, to align key roles and
responsibilities across the Nation, linking all levels of government, nongovernmental organizations, and
the private sector. ICS provides the template for managing incidents regardless of size, scope or cause.

PSA

Protective Security Advisor

PSAs work within the Department of Homeland Security, Office of Infrastructure Protection, to assist
owners and operators of critical infrastructure by coordinating requests for DHS-provided services such
as training, grants, and vulnerability assessments. During an incident, PSAs work within state and local
EOCs and JFOs, where they advise DHS and private sector representatives on interdependencies,
cascading effects, and damage assessments concerning impacted critical infrastructure.

SCC

Sector Coordinating Council

SCCs are self-organized and self-governed bodies that serve as principal sector policy coordination
and planning entities. Membership composition varies from sector to sector; however, membership is
representative of a broad base of owners, operators, associations, and other entities. The SCCs enable
owners and operators of critical infrastructure to interact with the government on a wide range of sectorspecific strategies, policies, activities, and issues.

Oil and Natural Gas Industry Preparedness Handbook 15

Oil and Natural Gas Industry Preparedness Handbook 16

Oil and Natural Gas Industry Preparedness Handbook 17

Oil and Natural Gas Industry Preparedness Handbook 18

Oil and Natural Gas Industry Preparedness Handbook 19

Preparing at the
State and Local
Levels
Oil and Natural Gas Industry Preparedness Handbook

Introduction to Preparing for a Crisis

at the State and Local Levels
The oil and natural gas preparedness and response strategy focuses the majority of efforts, resources and
information on efforts at the local level. The following document outlines guidance for regional and state
associations which support the oil and natural gas industry. The guidance includes recommendations that will
allow associations to form the necessary relationships with members and governments before an event occurs,
to understand what critical operations their members operate and depend on, and to recognize how exercising
can support these activities and the actions that may be required if an event were to occur.

Oil and Natural Gas Industry Preparedness Handbook 21

Preparing for a Crisis at the

State and Local Levels
Resilience and restoration are affected at the local level before, during and after a major disruptive event, such
as a hurricane, flood or terrorist attack which significantly impact critical energy infrastructure. The oil and natural
gas industry and its associations are taking proactive steps to prepare themselves and their State partners for
the potential impact of such events before they occur. The following guidance outlines how national and statebased industry associations can form the essential relationships, understand the varied needs and wants of
members and governments, and exercise both to understand the complexities of response before an event
impacts a States or a regions critical energy infrastructure. Most importantly, this guidance aims to help all of the
key players in an emergency scenario understand their role and how they interact with other players.

Know Who Does What

There are many roles and responsibilities assigned during a disruptive event that may be out
of the scope of normal business operations, which means contacts should be established and
responsibilities understood in preparation for, rather than in response to an event. In an event, having
established relationships facilitates effective information sharing, the communication of needs and priorities, and
the acquisition of resources. During an event it is extremely difficult to determine who the appropriate contacts
are within companies, at facilities and in government.
Although each event is different, depending on scope, duration, and impact, general responsibilities should be
outlined and contacts documented to help shorten response time, develop accurate situational awareness, and
advance restoration. Initially, contacts should be identified by position, rather than individual, as turnover takes
place and functions change. When considering positions and responsibilities, it is also critical to identify who the
decision makers are within organizations, both public and private. Developing relationships with the appropriate
individuals during normal operations will make communication easier during the tumult of a disruptive event.
Creating an annual process to update and verify suitable emergency contacts is a good practice to reaffirm
existing relationships and to create new ones, when needed. Including mobile phone numbers and alternate
email addresses is an important detail to consider when gathering and documenting information. During periods
of disruption, primary methods of communication are often unreliable or unavailable due to infrastructure
damage, loss of power, etc. Cell phones, text messages, and other means of communication should be
considered and utilized to ensure communication is effective.
Lastly, it is important to predetermine, to the extent possible, the stakeholders and organizations that might
request information during an event, their need and/or authority, and the purpose of the information requested.
While requests may differ with each type of event, government entities at the State, local and federal levels
will require specific information to manage critical services and public order. These needs should be identified
through the process of established channels of communication with the appropriate parties involved in response.
Industry and association representatives can use this information and the relationships they have developed to
help members work through the process of reporting information and requesting assistance and/or resources
during an event.

Oil and Natural Gas Industry Preparedness Handbook 22

Know What Not to Do

Federal and state antitrust laws limit what kinds of information associations and companies are
permitted to share, even during an emergency. It must be recognized that members have faced
antitrust actions stemming from response activities in the past, despite representations or promises
by government agencies. Just as association staff and member company representatives do in the normal
course of business, there should be no sharing or discussing among company representatives, or soliciting by
associations, of a companys confidential or proprietary information during an event. Such information relevant
in an event may include, but is not limited to, locations of supplies, delivery schedules, pricing, or refining
operations. This prohibition applies even where a government official may request it from an association or from a
group of members. If you receive such a request, decline it and explain that an official may obtain this information
directly from an individual company on an individual basis (without trade associations or other companies
involved). If you are unsure about the implications of information received from a member company or requested
by a government official, please consult with legal counsel.

Know What Matters

During normal business operations, associations can communicate with oil and gas companies
in their regions to ensure there is an understanding of assets and resources, and their importance
to the reliable operations of the system. This knowledge is critical to maintain at least minimal
system operations, assets which have been designated for priority restoration by State and local
governments, and assets that are critical to public needs when an event occurs. Owners and
operators, as well as public officials, need to be aware of the critical services in their regions, the products
needed to maintain those services, and the impacts of not receiving those products and services. For example,
interruptions to product deliveries can affect the ability of first responders to fuel vehicles, the ability of citizens to
heat their homes, and the ability of hospitals to keep generators running. In a crisis, impacts to the fuels system
can have impacts throughout the area and can potentially hinder the restoration process.
Governments, particularly at the State and local levels, should be provided information and education about
purchasing fuels and fuel contracts. Stakeholders are often unaware of what is needed to purchase fuel, which
may already have contracts in place for available supplies, and what laws and regulations apply to purchases in
their States. For example, The National Association of State Energy Officials (NASEO) has identified one of the
critical issues that must be considered in advance of an emergency:1
Experience from several states indicates that supply may be sustained during shortages through careful
attention to how fuel is purchased and fuel purchasing contracts. Some large consumers, including
some public entities with critical petroleum fuel using agencies such as police, fire, and public transit,
may have opted to reduce the cost of fuel through spot market-based contracts or by contracting for
fuel from spot-market dependent vendors. However, spot-market fuel availability diminishes rapidly
during a shortage. This is because fuels supplies that are available in excess of that needed to meet
contractual obligations are treated as a surplus and sold at a discount. In a shortage, contractual needs
are served first and there is little or no surplus. Hence, vendors who rely solely on the spot market may
be unable to supply critical needs customers during a shortage.
It is important to highlight that these practices and regulations can vary greatly from State to State and by
municipality and it is critical that decision makers have the information in advance of an event. While it is

1 http://www.naseo.org/data/sites/1/documents/publications/Petroleum_Shortage_Supply_Management.pdf

Oil and Natural Gas Industry Preparedness Handbook 23

acknowledged the Federal government may have the authority under certain circumstances to acquire and
redistribute certain resources, it is critically important that all parties understand contracting processes and that
Federal intervention is used only as a last resort in emergency situations. It is also important for governments
at all levels to understand that 95% of retail gas stations are independently owned and operated, that is, they
are not owned by refiners. Further, nearly 60% of all of stations are owned by a single store owner. This means
that during an event, identifying power status, supply availability and operational capability across such a broad
and diverse ownership pool will be extremely challenging. Therefore, governments should focus on system-level
restoration to ensure power and supplies are available to those who can receive them.
Understanding of the availability or resources and the needs of stakeholders, combined with on-the-ground
situational awareness, will facilitate member companies abilities to respond to requests for information across
governments and receive assistance should they need it. Preparing effective processes which facilitate the
delivery of critical information during an event, whether through official working groups or informal networks,
could be a valuable service provided by the industry associations. Clear communication by members of
damages, restoration activities, and potential needs can facilitate restoration when it is received and understood
by affected stakeholders. Industry associations can promote an understanding between partners which supports
response operations during an event, enabling the appropriate allocation of resources, movement of personnel,
and public messaging. As priorities are addressed, associations should facilitate communication between
members and governments to promote appropriate consumer behaviors and to inhibit those behaviors that can
impede timely, efficient restoration.

Practice, Practice, Practice!

The best way to ensure the correct relationships have been established, the correct information has
been collected, and the correct mechanisms are in place is to test the process through drills and
exercises. Exercises should be taking place routinely at the organizational, local, State and regional levels and
participants should be incorporating lessons learned into their operations and business continuity and response
plans. As members of a critical stakeholder community, associations can engage those public sector participants
who have roles in preparedness, response, and recovery. Exercises and drills should be part of a consistent
feedback loop that informs current operations, response plans and future infrastructure planning.
Stakeholders need to be aware of the various natural and manmade events that could affect them, and should
therefore build realistic scenarios to test their response and resilience to those events. Associations can inform
that process, bringing industry-specific expertise during the design phase, as well as during the exercise. This
can ensure when a crisis happens, government partners in particular have an understanding of how systems
function, how response is carried out, and what their expectations of restoration should be. Exercises will also
educate industry as to the capabilities of their government partners, the validity of their own plans, and critical
interdependencies they need to be aware of. If exercises are not occurring at the State or local level, industry
associations and their members should suggest exercises to their public sector partners. Preparedness on both
sides is essential to the recovery process, as governments can as easily impede as they can support if they are
not prepared or informed.
Exercises, whether table tops, functional, or full-scale, allow participants to understand the various needs and
issues that could emerge during a real world event. Typically, many questions will arise that most would not have
thought of without the stimulus of an exercise. For example, some important questions include:

Oil and Natural Gas Industry Preparedness Handbook 24

 Who, at the State level, is responsible for requesting waivers?

From EPA?
From Agriculture?
From Transportation?
Who is the relevant contact at the State Emergency Management Agency?
Do they have a role in energy restoration?
Do they have fuel needs that industry can assist with?
Who is the State ESF-12 liaison?
There is much that stakeholders would not know or not ask themselves during normal operations that can
become critical during an event. Exercises help tease out this information, create the relationships that lead to
the answers, and define the responsibilities of all stakeholders. Preparing for an event takes dedicated, persistent
work at the State and local levels, with both public and private partners. Industry associations should ensure they
are sharing the information they gather and the lessons they learn throughout these processes back with their
members. A concerted effort by industry associations and members can help establish a baseline of education
for stakeholders regarding the structure of the oil and gas industry, the requirements for basic operations, and the
functions of markets. The end result, if an event occurs, should be a stronger partnership between industry and
stakeholders, improved resilience, and more efficient recovery.

Oil and Natural Gas Industry Preparedness Handbook 25

Potential Waivers

Oil and Natural Gas Industry Preparedness Handbook

Introduction to Potential Waivers to be

Requested During an Incident
The oil and natural gas industry operates under a myriad of regulations to ensure safe operations, environmental
quality and fair market competition. The industry has a deep commitment to complying with all regulations, all of
the time, regardless of external conditions. However, during the response to an event affecting system integrity,
some regulations can impede the quick restoration of services when access to specific resources is limited or
workers and equipment are needed from other areas. Governments understand this paradox and the value of
quickly restoring critical services when events affect their communities. Waivers, where government temporarily
suspends regulations so that companies can, continue operations that will help alleviate the emergency and
restore normal operating conditions, are the solution to this problem. The following document identifies many
of statues, related issues and waivers that can be requested during an event to speed recovery and a return to
compliance.

Oil and Natural Gas Industry Preparedness Handbook 27

Potential Waivers to be Requested

during an Incident
The following is a checklist of all federal regulatory waivers needed to ensure the most efficient functionality of
the fuel distribution system possible during a state of emergency (i.e. hurricane, blizzard, etc.). The checklist is
organized by administrative department/agency, listing all necessary regulatory waivers within the department/
agencys jurisdiction underneath.

Environmental Protection Agency (EPA)

RFG Requirements
Issue: Reformulated gasoline (RFG) is a cleaner burning gasoline blend required in areas that
are not meeting certain air quality standards. During times of emergency, it is imperative that
distributors have the flexibility to get any available fuel into the affected area in any way possible,
regardless of whether or not it is RFG.
Waiver Needed: 40 CFR 80.78(a)(7), prohibits persons from combining any reformulated gasoline
blendstock for oxygenate blending with any other gasoline, blendstock, or oxygenate.
ULSD Requirements
Issue: Ultra Low Sulfur Diesel (ULSD) is a cleaner fuel, with a 15 parts per million (ppm) sulfur
specification, required by EPA for vehicles and equipment. During times of emergency, it is
imperative that distributors have the flexibility to get any available fuel into the affected area in any
way possible, regardless of the sulfur content.
Waiver Needed: 40 CFR 80.510 and 80.520, which set ULSD standards. This waiver would allow
the use of high sulfur heating oil in model year 2006 and older vehicles, generators and as home
heating oil during the emergency.
Vapor Recovery Regulations
Issue: Fuel terminal loading and unloading systems and tank trucks that transport fuels are
required to use specified vapor recovery equipment, which can differ from state to state. In
the case of an emergency, is imperative that fuel can get from jurisdiction to jurisdiction by any
transport means available. The states include these regulations in their state implementations plans
(SIPs), which are approved and enforced by EPA.
Waiver Needed: 40 CFR Part 60 Subpart XX and Part 63 Subparts R, Y and BBBBBB, which
set the standards for loading applicable to Bulk Gasoline Terminals, Pipeline Breakout Stations and
Marine Tank Vessel Loading Operations, respectively.
Tank Roof Landing Emissions
Issue: During an emergency, when more fuel may be needed to pass through a facilitys tanks
faster than normal operations, the emptying and filling of tanks may result in higher air emissions
due to the tank roof landing emissions in floating roof tanks.
Waiver Required: Air emission regulations are enforceable by EPA and air emissions for specific
facilities are limited by their air permits. If EPA provides a waiver (or no-action assurance) during
an emergency, each state may also waive the permit limits for an appropriate time during and
following the emergency.

Oil and Natural Gas Industry Preparedness Handbook 28

Department of Transportation (DOT)

General Administrative Requirements
Issue: The DOTs Federal Motor Carrier Safety Administration (FMCSA) sets general standards and
requirements that apply to vehicle labeling, record keeping, etc. They also require transporters to
follow all applicable state and federal requirements. Waiving this section could expedite shipments
of fuel to recovery areas and to allow for other federal and state waivers to be effective.
Waiver Needed: 49 CFR 390, which provides the general basis for federal motor carrier safety
regulations.
Issue: The DOT Pipeline & Hazardous Materials Safety Administration sets requirements on
operator qualification training for certain hazardous liquid and gas pipelines transportation functions
or covered tasks that meet the components of the four-part test. This set of regulations is
commonly referred to as Operator Qualification, and an example of a covered task is manual
closure of valves. Due to the diversity of hazardous liquid and gas pipeline infrastructure across
the Nation, operators train to satisfy the requirements as they apply specifically to their companys
equipment and infrastructure. These requirements, which may be appropriate under regular
operating circumstances, hinder the effort for mutual aid from other hazardous liquid and gas
pipeline companies in time-sensitive circumstances.
Waiver Needed: 49 CFR Part 192 and 195, subpart N lists the requirements of Operator
Qualification, including covered tasks and four-part test in 192.801(b) and 195.505.
Driver Qualification Regulations
Issue: The FMCSA has certain rules requiring a drivers physical fitness, fluency in the English
language, level of fatigue, the thorough inspection of cargo, ensuring lighting and cargo standards
are met and inspection repair and maintenance requirements, which may be appropriate under
regular operating circumstances, hinder the effort to get as many loads into the disaster area as
possible in a short amount of time.
Waiver Needed: 49 CFR Parts 391-3, and 396, which set driver standards, load standards,
inspection standards and etc.
Hours of Service Regulations
Issue: The FMCSA sets requirements on how many hours a truck driver can drive or be on duty
in a given day and week. There are also certain rest time requirements between on duty periods.
These requirements, which may be appropriate under regular operating circumstances, hinder the
effort to get as many loads into the disaster area as possible in a short amount of time.
Waiver Needed: 49 CFR Part 395, which sets hours of service regulations.
Vehicles Not Meeting HazMat Specifications
Issue: DOTs Pipeline and Hazardous Materials Safety Administrations (PHMSA) sets strict
specifications on which vehicles can carry gasoline and other hazardous materials, and how they
need to do it (i.e. shipping papers, markings, placarding, etc.). To get the needed quantities of fuel
into the disaster area as quickly as possible, more vehicles are needed as long as they are fit to
carry gasoline and diesel fuel, even if they do not meet the strict specifications.
Waivers Needed: 49 CFR Parts 173.242 and 172 Subparts C, D, F and I, which govern vehicle
specifications and other shipping standards for tank trucks. These waivers will also affect 49 CFR
Parts 106, 107 and 171-180.

Oil and Natural Gas Industry Preparedness Handbook 29

 Jones Act
Issue: The Merchant Marine Act, also called the Jones Act, requires only U.S. built and flagged
vessels carry goods from U.S. ports to other U.S. ports. During times of emergency it is imperative
that disaster relief items, including fuel, get to the disaster area as quickly as possible regardless
of country of origin. More eligible vessels mean that more disaster relief supplies arrive in a more
timely fashion. Coastwise waivers can be granted in two ways: (1) waivers shall be granted
automatically on request of the Secretary of Defense to the extent considered necessary in the
interest of national defense; and (2) when the head of an agency responsible for the administration
of the navigation or vessel-inspection laws (in this case the Secretary of DHS) considers it
necessary in the interest of national defense, if the Administrator of MARAD determines that no
U.S.-flagged vessels are available for the proposed transportation. CBP has direct responsibility
for enforcing the Jones Act and processes requests for waivers for the Secretary of DHS. Prior to
granting the waiver, CBP must seek MARADs advice regarding U.S.-flag vessel availability before
the Secretary of DHS makes a decision by law (see 46 U.S.C. 501).
Waiver Needed: 46 USC 551, which codifies the restriction on non-U.S. flagged vessels
delivering from U.S. ports to U.S. ports.
Foreign Oil Spill Response Vessels
Issue: The Maritime Administration entered into a Memorandum of Agreement with the U.S. Coast
Guard, the Environmental Protection Agency and the State Department to expedite requests for
exemptions for foreign oil spill response vessels (oil skimmers, etc.).
Waiver Needed: 46 U.S.C. 55113. This MOU essentially memorializes the process that these
agencies created will continue to expedite allowances for foreign oil spill response vessels in the future.
Anchor Handling Waiver Program
Issue: Similar to the Launch Barge Program, MARAD is authorized to make determinations under
46 U.S.C. 501 allowing the use of foreign anchor handling vessels (used to position mobile
offshore drilling units) if no U.S.-flag vessels are available, and if the companies that want to use
foreign vessels have contracts in place to bring in replacement U.S.-flag vessels.
Waiver Needed: 46 U.S.C. 501 allowing the use of foreign anchor handling vessels (used to
position mobile offshore drilling units) if no U.S.-flag vessels are available.

Internal Revenue Service (IRS)

Diesel Fuel Penalty
Issue: The IRS imposes 24.4 cents per gallon tax on diesel fuel sold for on road use, while dyed
diesel fuel used for farming purposes, home heating use and etc. are not ordinarily subject to the
tax. Typically, if a diesel fuel that was not subject to this excise tax was converted to use for on road
purposes, the IRS would require that use to be reported and the tax paid accordingly. In the case
of emergency, the goal is to get as much transportation fuel into the market as possible to make
up for supply shortages, and as such, this reporting and tax requirement becomes an impediment
to bringing that fuel into the transportation mix.
Waiver Needed: Requirements under Publication 510, which governs excise taxes, of the Internal
Revenue Code.

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Other Federal Government Assistance Options

Vessel Movement Control
The Coast Guard has authority to control vessel traffic in areas subject to the jurisdiction of the
United States which are determined to be hazardous or under other hazardous circumstances
through enactment of safety and security zones. Coordination efforts with the U.S. Coast Guard
and Department of Homeland Security (DHS) to provided exclusive access to ports in the disaster
area to those bringing fuel and other necessary supplies in an effort to expedite barge movement.
Waiver Needed: Captain of the Port Order waiver under Ports and Waterways Safety Act (33USC
1221 et seq.).
Fuel loans and distribution assistance from the Department of Defenses (DOD) Defense Logistics
Agency (DLA) and DHSs Federal Emergency Management Administration (FEMA).
Fuel Loans from the Department of Energy (DOE).

State Specific Waivers Needed to Transport Fuel Interstate

Reid Vapor Pressure (RVP) Requirements
Issue: Many states allow a variance, up to 1 lb. RVP, from the most recent version of ASTM D4814
for gasoline blended with ethanol. NIST Handbook 130 also provides for this variance.
Waiver Needed: States that do not allow for an RVP variance may waive the applicable state law
or regulation to allow fuel from states that do allow the variance to be used interchangeably across
state lines during the emergency.
Biofuel Blending Requirements
Issue: Some states require a minimum amount of biofuels to be blended into all gasoline and/or
diesel sold within the state.
Waiver Needed: States with minimum biofuel blending requirements may waive the applicable
law or regulation to allow fuel that does not contain the specified volume of biofuels to be carries
across state lines and sold in the state during the emergency.
Stage I Vapor Recovery Requirements
Issue: Fuel terminal loading and unloading systems and tank trucks that transport fuels are
required to use specified vapor recovery equipment, which can differ from state to state. In the
case of emergency, is imperative that fuel can get from jurisdiction to jurisdiction by any transport
means available. The states include these regulations in their state implementations plans (SIPs),
which are approved and enforced by EPA.
Waiver Required: SIPs are enforceable by the EPA and during the case of an emergency, if EPA
provides a waiver (or no action assurance) during the emergency, each state requiring Stage I Vapor
Recovery may waive the applicable law or regulation to allow trucks and terminals without vapor
recovery equipment to operate and move fuel from the terminal to intrastate or interstate destinations.
Weight Limits
Issue: All states set weight restrictions (maximum weights allowable) for trucks that travel on
their roadways. Because federal law allows each state to set their own weight requirements, not
all states set the limits at the same weight. Additionally, these state specific weight limits typically
require fuel tankers to be filled at levels below their capacity in most, if not all, states.

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 Waiver Needed: States may waive their typical weight limits and set temporary limits for trucks
carrying emergency relief supplies (including fuel) to allow rapid movement of the largest amount
of fuel that can be moved safely intrastate and across state lines. A typical waiver may allow truck
from 92,000 lbs. to 100,000 lbs.
Distributor License
Issue: Many states require a carrier to pay a fee and obtain a Distributors License to transport
motor fuel within the state.
Waiver Needed: States may waive the applicable fees and license requirements to ensure that all
drivers, trucks and resources within the state, or brought across state lines to provide support, are
available to contribute to the disaster relief effort.
Hours of Service
Issue: Some states have driver Hours of Service requirements that are more restrictive than the
DOTs.
Waiver Needed: States with hours of service regulations that are more restrictive than the federal
governments may waive those requirements in kind with the DOT effort to get as many loads into
the disaster area as possible in a short amount of time.
Retail Gasoline Label Requirements
Issue: States that have specific biofuel blending requirements may require labels that say things
like contains 10% ethanol, while some fuel transported interstate may not have exactly 10%, but
rather up to 10% ethanol.
Waiver Needed: States with content specific labeling requirements may waive those requirements
to allow fuels that may not be blended with the exact volume depicted on the dispenser to be sold
in the state during the emergency.
Importer/Exporter Licenses
Issue: State revenue departments require fuel importers and exporters to obtain pay a fee and
obtain a license from the state to move fuel across state lines. Without these licenses, the fuel
merchant cannot legally buy gasoline from one state and move it to another.
Waiver Needed: Each individual state within the disaster region may allow fuel to be bought and
sold within or outside their state by any merchant, whether or not they have paid the proper fee and
obtained an importer/exporter license, regardless of where the fuel is purchased and where it will
be delivered. States who have allowed this in the past have taken different approaches, with some
expediting licenses during the emergency and others waiving the requirements entirely or required
the merchant to remit taxes to the state despite not being properly licensed and registered.
IRP/IFTA
Issue: The International Registration Plan (IRP) is an agreement among states of the US, the
District of Columbia and provinces of Canada providing for payment of commercial motor carrier
registration fees. To operate in multiple states or provinces, motor carriers must register in their
base jurisdiction (state or province). The International Fuel Tax Agreement (IFTA) is an agreement
among states to report fuel taxes by interstate motor carriers.
Waiver Needed: These tax structures, which act as interstate fuel taxes, may be waived in
agreement with all states that are affected by the emergency or that are participating in the
emergency relief effort to ensure that fuel can move freely from one state to another without being
bogged down with tax bureaucracy.

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