An amendment to Philadelphia Code relating to the use of No. 2 fuel oil—the most widely used oil for heating, industrial operations, and emergency generation, was signed into law by Mayor Michael Nutter on June 18. 

This amendment fixes an urgent problem created last year when Philadelphia adopted stringent limits on sulfur in No. 2 oil that go into effect on July 1, 2015. The 2014 ordinance not only prohibited the sale or distribution of No. 2 oil containing sulfur above 15 parts per million (ppm), it also prohibited the use of No. 2 oil above this limit. However, the existing legal standard for sulfur content is 2,000 ppm, and if fresh oil meeting the new standards is mixed with even a small amount of old oil, the resulting mixture would exceed the 15 ppm limit, and could not be used. Even facilities that have been purchasing 15 ppm oil for several years could have sulfur concentrations well above the new standard in their tanks. Under Philadelphia’s 2014 law, it would be illegal to burn this oil after July 1.

Working with lawyers in Ballard Spahr’s Government Relations and Environment & Natural Resources practice groups, a group of parties representing industry, education, and real estate concerns sought a solution with City Council. Working against the July 1 deadline, the parties collaborated with Councilman Bobby Henon to introduce a bill on May 21 to adopt the same exemption that Pennsylvania law provides for the use of oil on hand when the new standards go into effect. After vigorous negotiations, the bill was amended to ensure the administration's support, and a compromise bill was passed by Council and signed by Mayor Nutter.

The compromise amends Philadelphia Code § 3-207 to allow the use until July 1, 2020, of fuel stored at a facility prior to July 1, 2015. The bill also authorizes the City to extend this exemption until at least 2025 on a case-by-case basis, and to adopt regulations providing more generally for the continued use of fuel oil after June 30, 2015. Facility owners are required to maintain records demonstrating that all fuel delivered after July 1, 2015 complies with the new sulfur standard. Facility owners that anticipate that they will be able to dilute their current oil stores to meet the 15 ppm standard by July 1, 2020, need only maintain these records. 

Facility owners that do not expect to be able to dilute their current oil stores to meet the 15 ppm standard by July 1, 2020, will need to prepare to seek a further extension.  Among the factors that the City will consider in granting a case-by-case extension is the “quantity and sulfur content of … stored fuel as of July 1, 2015, unless the user demonstrates to the satisfaction of the department that the user could not reasonably obtain such information.”

Accordingly, facility owners expecting to need an extension should record this information now to the extent it is “reasonably” available. The ordinance does not explain what information would be necessary to satisfy this information requirement, particularly given that most extension requests will not be made until late 2019. At most, the standard would require a sulfur sample combined with a volume measurement for each tank. However, at certain facilities with many small tanks, the cost of such an exercise might go beyond even what the City considers “reasonable.” 

Facility owners should consult with their attorneys and compliance counselors concerning the application of these new provisions. Ballard Spahr’s Environment and Natural Resources Group advises on national and regional compliance, permitting, rulemaking, development, business planning, and contamination matters. The Group also provides representation in litigation, during investigations, and for transactions. For more information, please contact Brendan K. Collins at 215.864.8106 or collins@ballardspahr.com, or Robert J. Clark at 215.864.8659 or clarkr@ballardspahr.com, or the Ballard Spahr attorney with whom you work.


Copyright © 2015 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

Related Practices

Environment & Natural Resources
Government Relations, Regulatory Affairs and Contracting