Preparing For A Successful Inspection

Does the thought of a facility inspection make your palms sweaty? Fear not, as we take you on an enlightening journey to better understand agencies and regulations involved in inspecting bulk fuel storage facilities in Alaska. In this episode, Shannon discusses the crucial role of preparation and guides us on restricting the scope of an inspection - keeping it strictly focused on the specific permit. Listen in as we dissect what inspectors keep their eagle eyes on and arm you with invaluable tips to ace the process.

We'll shine a spotlight on the cornerstone of preparation - record keeping. We'll also underline the importance of reviewing employee training records and the key to presenting information to the inspector in a format they appreciate. Additionally, we'll walk through how to get your team ready for inspection day.

 Terminal managers, we've got you covered with quick tips on responding to questions about preexisting conditions, non-compliance areas, and the need to replenish spill equipment. Plus, the potential consequences of non-compliance and the chances of notices of violation - not to scare you, but to prepare you better.

 This podcast is for informational purposes only and should not be considered legal or regulatory advice. We are not responsible for any losses, damages, or liabilities that may occur from using this podcast. This podcast is not intended to replace professional regulatory or legal advice, and the views expressed in this podcast may not be those of the host, which would be me or Integrity Environmental. Thank you very much for listening. We would be happy to provide professional regulatory advice as part of our consulting services if you need professional regulatory advice.  

Transcript

Amanda: 0:43

Welcome back, shannon. I'm just sitting here hanging on to the last few moments of summer. How are you doing today?

Shannon: 0:49

I'm feeling pretty good. It's not been the sunniest of summers, so I kind of wish the rain would go away and the sun would come back. But it is summer, you're right.

Amanda: 0:59

And summer for our industry means agencies are across Alaska completing facility inspections.

Shannon: 1:07

Yes, everybody's favorite thing on earth to have an agency representative inspect their facility. I notice.

Amanda: 1:17

integrity receives an influx of calls from facility managers asking what they can do to prepare for their upcoming inspections, so I was thinking we could take a moment to review some best practices.

Shannon: 1:28

Yeah, that's a really good idea because, yes, everybody panics a little when they hear that an inspector is coming.

Amanda: 1:34

So which agencies are out there inspecting?

Shannon: 1:38

Well, for Alaska it's mostly the state of Alaska for various permits like stormwater or oil discharge, pollution control plans and also the US Coast Guard. They're doing their annual 33 CFR 154 inspections. Sometimes, although not as frequently, the EPA is also out inspecting for any number of permits Water, air, spill response or spill control. So those are the main three. Depending on where you are, there may also be a local level of inspection from your municipality, a borough or maybe even a landowner if you lease from, like, an airport, for example. So those are the kind of the broad range of like who would be out and about by far most of our clients in bulk fuel storage industries. They're seeing the state of Alaska representatives or US Coast Guard representatives.

Amanda: 2:36

Why do agencies inspect these facilities?

Shannon: 2:40

Oh, why do agencies inspect, Amanda, I don't know. Money, prestige, catching bad guys All of those things probably run through a terminal manager's mind when they hear that they're going to be inspected.

Shannon: 2:55

But I think, if you honestly spoke with most inspectors, they would say that they want to help you maintain and achieve compliance and help you perform better. There are definitely other aspects to an inspection. Specifically, you know, to ensure that the environment's protected. They want to prevent conditions that lead to a spill. And then there's also a component about informing and educating those handling all these different hazardous materials about the rules and regulations that apply. There's all joking aside, it's one to make sure that regulations are being met, but it's also to help educate and acknowledge and improve processes and operations at the facility.

Amanda: 3:40

What determines the difference between a good inspection and a bad inspection?

Shannon: 3:46

Preparation. Typically see is that if a terminal manager is not prepared for an inspection, it doesn't go as well, and if they're very prepared it goes a lot better. As a former inspector myself, I actually inspected with the the State of Alaska at the beginning of my career under the SPAR (Spill Prevention and Response) program. What made me want to look more closely at a facility and I think this is universal for all inspectors is if you're interviewing somebody and they have stories that change or they have a complete lack of knowledge of a certain inspection area, they've got poor records generally overall.

Shannon: 4:24

And then walking around the tank farm you're seeing poor housekeeping. It kind of leads to this if these easy things are not being addressed, how much of the hard stuff is actually being attended to? And I think for a lot of agency inspections, when those things aren't addressed up front, it sort of causes them to pause and take a more in-depth look because they're trying to figure out what's really going on here. And so that's the difference between a good and a bad inspection, as the more you prepare year-round, just being ready for an inspection at any time of the year, but especially if the inspector calls ahead and tells you they're coming in a few days or a few weeks. Whatever you can do with that heads up. Knowledge to prepare for this inspection will make it go better.

Amanda: 5:05

I know we're all dying to know what is it the agencies are looking for during an inspection.

Shannon: 5:11

Well, it's interesting because some agencies, like the Coast Guard, actually have a published checklist of what they're looking for and you can actually see exactly what it is that they want. Other agencies do have checklists but they're not necessarily published and some adhere to the regulation and use the regulatory text as a guidance for inspections. I know the EPA and the Coast Guard both publish their inspection checklist. We can link those here and they're very specific and that's good in some ways. And then the state of Alaska has so many different divisions I mean we're talking water, air spill prevention, contaminated sites, environmental health. I mean there's a lot of different things that the state could come for. They all have different requirements and different inspection goals, and so what you should do right away is, when they reach out by phone or email, if they're letting you know of the upcoming inspection, or if they show up unannounced, you're going to want to establish the scope of the inspection and understand why they're there and what specific permit or plan or regulation they are there to look at.

Shannon: 6:24

If someone says I'm from the state of Alaska and I'm coming in two days to inspect your facility generally, what the next question should be is which department are you with and which permit are you going to be inspecting?

Shannon: 6:36

And so if they say I'm with the Division of Water and I'm coming out to inspect your storm water program, that's a good scope. Now you know which permit to be prepared to respond to and you can focus on reading it and making sure the records for that permit are ready and it allows you to prepare correctly. So once you've established scope, that also allows you to limit the inspection to the scope. I think a lot of terminal managers feel like they should be allowed to let an agency inspector see every single part of every single inch of their facility, and that's not necessarily true. If you're only there for the storm water plan, you don't need to see many aspects of that facility that are related to spill prevention and response. I mean, there are some pieces that overlap, but not all, and your job as the terminal manager is to direct the inspection and to keep the scope to just what they need to see for that specific inspection.

Shannon: 7:35

So, Via email is easy. They typically have their name and department and title and contact information. You've got all that. But if they call you on the phone, you're going to need to ask for it. I get a lot of terminal managers who call us and they say the state called. They're coming in two days and I'm like who is it? And they're like John or David and I'm like, well, I need more clues than that. I need to know what department, what permit. Give us some scope.

Shannon: 8:05

All agencies have the right to perform unannounced inspections. They use it sparingly. But if you do have an unannounced inspection, you're going to have somebody who hopefully will be wearing the identification, like a jacket that says they're with ADEC or they're wearing a Coast Guard uniform or an EPA jacket, and they're going to come up and say I'm this kind of inspector and I'm here to inspect your facility and this is an unannounced inspection. You absolutely need to verify that they are who they say they are. So you need to get a business card, ask to see their badge or inspection credentials and then you're actually. You're going to want to check them into the facility and make them sign a. You know a sign in or sign out if you've got a facility security plan, you want to make sure to go through all of those pieces. That'll also give you time as a terminal manager if it is a surprise inspection to sort of sort through your mind what their scope is going to be. Are they going to be here just for stormwater or are they also here for all the Coast Guard components or whatever? And so that's that's sort of like preparing for that inspection.

Shannon: 9:10

Whether it is announced or unannounced, you want to start with scope. That leads to your question, which is like what are they inspecting Right? And they inspect a couple of things. They inspect physical compliance, the actual facility, the condition that it's in some of your structural components, like in stormwater. We've got best management practices in place to reduce the exposure of stormwater to industrial activities, for spill prevention and response. We have things like containment liners that keep fuel where it's supposed to be right. So that's sort of like the physical compliance of the facility.

Shannon: 9:48

They also are looking for record keeping compliance. They're going to ask and audit some specific portions of your record keeping. Usually during an in-person inspection the agency will only ask for representative records, so they won't say show me every record for the last five years. They might say something like do you have the daily records for February 21st of 2021? And you have to go back and find that random date and show it to them. Or they might say show me your secondary containment drainage log for the last year. Something like that. In addition to those two things the physical compliance of the facility and the record keeping they're also looking at operations compliance, and this is things like people having the trainings that they're supposed to have, people having the knowledge that they're supposed to have to perform these processes and procedures correctly. So if you're responsible for fuel transfers at a dock that you're on the PIC list, the person in charge list, so things like that sort of the operational compliance, knowledge compliance, making sure that you are doing things the way that you say you are going to do them.

Amanda: 10:56

So I did hear everyone's favorite word record keeping. What can a terminal manager do to be ready with their record keeping?

Shannon: 11:06

Well being organized already because you've listened to our extensive podcast episodes on record keeping. If you're already organized, you will know exactly where your secondary containment drainage logs are and you will know exactly where February 21st of 2021's records are. So being organized is the first step. Let's say you're organized but you do have a couple of days heads up. You can absolutely pull the records affiliated with that plan and start reviewing and organizing those specifically. So if you have an inspector that's told you they're coming in two days, you can pull out the plan or permit related to that agency and you can sort of review all the recent correspondence, make sure any updates are filed Like if you've had some revisions because of staff turnover, make sure they're in there. Sometimes you can get the revisions done.

Shannon: 11:59

If they have not been done and you want to archive old records in a separate place from your current records. So old plans and old information, typically older than three to five years, depending on the permit, they should be archived and they don't necessarily. Your agency inspector will not necessarily ask for those older records, right? They're not going to say show me something from seven years ago. They're going to go with the scope of the regulation, which, for most Coast Guard and EPA plans is three years and for most state plans is five. But there are some EPA records that are longer than three years and are five. So make sure you know specific to your permit. There are specific records that are required to be kept by the permit and that's usually. If you go to the table of comments for that permit you can see what record keeping is required and so you'll have an idea of what they're going to be asking to see If there is an agency inspection checklist available and, like I said, we've got the Coast Guard's and the EPA's, you can just double check that checklist and say do I have all these things?

Shannon: 13:02

In addition to the records that you keep about the facility for daily inspection, routine, periodic inspections, you're going to want to look at the record keeping for your personnel training, because training is a frequent agency inspection item and so you want to make sure that your personnel are current on trainings they're supposed to have. Stormwater is a good example. They have to have an annual stormwater review and it has to be documented. Make sure you've got the documentation, it's been completed and, if the employees are not current, see if there's an online course that can provide that certification before the inspector gets there. If it's a major training or it's truly you don't have enough time, I would suggest researching when the next one is available and offered and plan for your employee to attend it and then you can take that information and present it to the inspector.

Shannon: 13:53

So Scenario one you're not prepared. He says where is Tom's twic card? And you say Tom doesn't have a twic card. That is from an agency perspective. Why doesn't he have a twic card? You're not complying right.

Shannon: 14:10

Or if you've done a little bit of preparation, you could say Tom was hired last month, he's applied for his twic card and he should receive it in the next week or so. Those are both true and they both are. You know they're both describing the same situation but one is going to get you more grace in an agency review or an inspection's finding letter than the other. So again, how you present the information can minimize some of the damage. If you are looking at a potential thing that should be done and is not done, being prepared and sort of troubleshooting and understanding how to correct it goes a long way during an inspection for the inspector to feel like you've got a grasp on things. You're prepared, you have the knowledge that you need, and this is a small bump or an oversight, not evidence of a much larger, chronic problem of not being prepared overall.

Amanda: 15:05

All right, so we've got our record keeping in order. What do we do to prepare the facility itself?

Shannon: 15:12

Well, I suggest that you, if you have an annual inspection checklist that you do once a year, pull it out, because a lot of our terminal managers they may be assigned monthlys and annuals to other staff members. I would take that annual inspection checklist or even your monthly inspection checklist and I would go out and do one yourself to sort of document what it's like right then. And there's a lot of common things that can be corrected before the inspector gets there, and we actually made a list of those that I am happy to share. Yeah, okay, so when you're doing a walkthrough of your facility with your monthly or annual here are some common and really easily fixable inspection findings.

Shannon: 15:56

You're going to want to review all the required postings and placards. You want to make sure they're current, in good condition and posted in the correct spots, and some examples of these include you know, for the state of Alaska, they have a spill notification placard and they have updated dates on the bottom. You want to make sure that notification placard is the most up to date one. The state of Alaska also requires the certificate of financial responsibility to be posted and have it not be expired. That's specific to ODPCP facilities. So, 10,000 barrels of storage or more. And then you're going to want to make sure some of the signs that are required by the different regulations and engineering standards, like no smoking and warning signs, signs that designate secure areas, clearly labeled emergency response equipment, caches and emergency shutoff valves All of those things typically have already been labeled, but sometimes the labels are faded or have blown away during a winter storm or got removed during a coding project and never got put back. So making sure that all your required posting and placards are there and then updating or freshening them up as needed or reinstalling them, is very helpful. You also can just remove debris. We see over and over again in inspection findings that there's trash, used sorbents, broken buckets, rags, excessive amount of things like plastic wrappers or tarps that are all intertwined with the secondary containment area or main industrial areas like tank truck loading racks. Perform that good general housekeeping and remove all of that trash and it just presents a much cleaner, neater and tidier facility. And it's a real common inspection finding that's easy to take care of right before someone shows up. So, related to that, you want to perform uncomplicated yard maintenance resolve any weeps or drips, look for heavily corroded pertinences and replace, if you can make sure all your valves turn and are not frozen, you know, as appropriate, or remove any wire tags or ropes that are wrapped around pipes or valve stems, as all of those can accelerate corrosion by trapping water or creating electrical pathways.

Shannon: 18:11

And then make sure that your emergency shutoffs are working. Make sure your high level test buttons are working. If you've got a cathodic protection system and it has a rectifier, make sure that that's working and you can open it and access it. I myself have been to two different sites where the CP system was turned off completely when I opened up the box. So that's something that you should absolutely make sure it's on and it's reading right.

Shannon: 18:39

If you have tanks with leak detection ports, make sure that they're easy to view and unclogged. There's not a bunch of moss in them or vegetation growing around them. If you have auto gauges, make sure those are working or noted as not working in your dailies. And then, if you've got tank vents, make sure they're open. They're unclogged by debris or burdened. They've got screening on them. Another thing you want to make sure is that any sort of tank valves or secondary containment area valves they're locked and that those locks can be opened. A lot of times they haven't been open in so long that the locks are frozen, and so you're going to want to make sure that there is a lock that it works. So that's what you can do as far as like walking around the yard.

Shannon: 19:22

There's a couple of other pro tips, I think, specific to the secondary containment area. For that one, you're going to want to look at removing tools, pallets, vegetation, water, accumulated soil in the sump. All of that stuff. All of those things reduce the amount of space in your containment area for spilled fuel, and that's a very common inspection finding is that the secondary containment area has stuff in it that it should not have.

Shannon: 19:49

I also see a lot of secondary containment area sumps and drains are clogged, as an inspection finding. So make sure that it's unclogged and it can be opened and drained easily. And if you're using a sump pump for some reason, make sure that that pump assembly is working and it's neatly stored. So that kind of covers the main facility. There's a couple of other inspection finding areas that I think are important to pay attention to. One of them is spill response equipment. Especially the Coast Guard wants to ensure that your spill response equipment is clearly labeled, easily accessible and that it works. If you've got a pump in your spill response, connex, you're going to want to fire it up and be able to show that it works and that all of the pieces parts are there, because the Coast Guard can ask you about that.

Shannon: 20:33

I will say the Coasties tend to focus on the skiffs. They want to make sure the skiff is operational and the engine on that is operational as well. They tend to be a little more water focused go figure, because they're Coasties. But from a facility standpoint you're kind of going through and doing this inspection and just making sure that housekeeping is done. Things that are supposed to work have been tested and are verified to be working. Things that are easy to fix are verified as working. If you find a frozen lock, cut it off and put a new lock on right. Easy things to just remove inspection findings before they even show up.

Amanda: 21:10

Great. So we've got our facility ready. We have our records ready. What can managers do to prepare the staff or operations for the inspection?

Shannon: 21:21

That's a very good question, because a lot of people stop at records in the facility, but these inspectors are walking around and they're talking to everybody on your staff. I do think that staff at the facility need to be prepared for the inspection and I've got a couple of strategies, if you will, that will make inspections easier. One is to identify a single person who will accompany the inspector around the facility, rather than relying on multiple people. This person should be personable so not Oscar the Grouch and they need to be knowledgeable about the facility, so somebody who's been there a while. I do sometimes see inspection findings where a new guy has taken them around and the overall lack of knowledge about the facility shows up in the inspection findings. Like if you're an inspector and the guy's like I don't know, I got here two weeks ago, I don't know, I got here two weeks ago, I don't know, you're going to have a funky finding because there's just no facility knowledge coming through. The reason it's better to have one person accompany the inspector all the way through is that they're going to get one story, they're going to have a good, solid point of contact and you're not going to have different people's versions of the same thing during an inspection. So usually it's the terminal manager that's usually how it works or like a yard foreman, someone who's been there a long time and is really responsible. And then you want to make sure that you have extra PPE for the inspector. They usually have their own, but they might be missing an item and if they are missing something, it looks really good to be able to provide them with eye protection or the hard hat or the safety vest. It makes you guys look sharp and it protects them while they're at your facility.

Shannon: 23:03

When I'm talking to terminal managers and helping them prepare, I usually tell them like decide ahead of time how you're going to present your facility If the inspector doesn't have their own inspection order. Start and end with some of the best features of your facility. So if you know the coatings on your tank are terrible and they're slated for replacement in the next two or three years, don't start or end with the bad coating. Save that for the middle. Start with your brand new tank truck loading rack and end with the recently repaired marine headers, because they're going to look better and the overall impression from the inspector is going to be better.

Shannon: 23:40

I mean, if your coatings have failed, there's nothing you can do about them. But if you decide what order you want to tackle these things in, you can kind of control the impression that they have of the facility overall. So once you've decided on the one person to escort the inspector and you've kind of decided how you want to present the facility, you're going to gather all your staff together and I strongly recommend letting them know that the inspector will be on site. Inspectors can speak to all staff if they wish to, so make sure that everyone's prepared. But inspectors don't necessarily have the right to interview staff in private. Upper level management has the right to be with staff during those interviews and sort of. The best way to prepare staff is to have them review with you or their direct manager about their responsibility, specifically in regards to record keeping and operational procedures.

Shannon: 24:30

And if you document all this, you can also count this review as like annual training requirements for the SPCC or the ODPCP, and so think of it like if Dan's job is to do the dailies, you can review how he's doing the dailies and ask him is there anything that we can fix right now, before the inspector gets here in two days? Right, and tell me when you go through this daily how you, how you've been documenting this thing. That needed to be fixed right. And all of that review can also apply into the future. Now you know, now Dan's trained up on it, but Dan also has a better idea of what he's he needs to say when the inspector asks them about the dailies. Right, it's a good preparation technique. And then, like I said before, with record keeping, make sure you review your training records and have a staff meeting to talk about answering these inspection questions and about what they're doing.

Shannon: 25:20

I think there's a big misconception that inspectors are the police or something and that I hear a lot of times like people sort of joking but not really saying I don't want to go to jail. Inspectors, don't take you to jail. They. They definitely issue inspection findings and potentially, notices of violation, and they it's. It can have some significant and serious consequences, but the likelihood of one single person going to jail for something is very remote. It would have to be criminal intent and that usually goes against almost all company policy and it would have to be a significant damage to the environment or human health. So when you're preparing your staff, make sure that you cover this with them and say, hey, these guys aren't the police, but they do deserve straightforward answers to their questions. But you don't. You also don't have to volunteer extra information. Just answer them specifically what they asked, you know and that and no more. They don't need all the rest.

Shannon: 26:22

As someone who routinely performs audits and inspections, sometimes we have staff. They start doing what I call the confessional, and that's when you show up and you're like tell me about this component of your tank farm and then I get a very compressed history of every sin that's occurred at that tank farm for the last five years and they're confessing everything because they're so worried about some of these things. And I think it ties back to that stereotype that inspectors are kind of like the police and that they've got to get everything off their chest and everything's got to be out. Really, the inspector's looking for your compliance about the specific regulation and procedure. It's not necessarily if I'm there for a tank inspection I'll be hearing about a spill response. That went wrong eight years ago, right? So what I'm?

Shannon: 27:12

I guess what I'm trying to say is get your staff trained to where they talk to the inspector about what they're supposed to be talking about and aren't bringing extra stuff in, and have them familiar enough with the inspection process that they don't panic and kind of go into that confessional mode.

Shannon: 27:29

It's not good for the inspector either, because they don't know what to do with that extra information, right, like wow, thank you for sharing that. Now I have this obligation for this completely separate issue that doesn't have anything to do with my permit and why I'm here. I was thinking because we have a lot of variety in how people answer questions that inspectors ask. I was thinking it would be fun if you pretended to be the inspector, amanda, and then I could pretend to be a terminal manager and I could give a couple of answers and then we could talk about why some answers are better than others, because I do think that having practice answering these inspection questions can absolutely make a difference in how good or bad that inspection goes. What do you think? You wanna be an inspector today and I'll put the hat on.

Amanda: 28:20

Yeah, I think that's great. Let's get some insider perspective. Let's start number one. All right, so I'm the inspector. Tell me about your high level alarms.

Shannon: 28:31

All right, and I'll pretend to be Bob Bob the terminal manager. Okay, so here's possible answer number one High level alarms.

Shannon: 28:41

Yeah we have those. It is a true answer. It's very short. Okay, possible answer number two Our high level alarms are tested monthly.

Shannon: 28:50

I usually do it myself. Sometimes Joe tests them, but when Joe does it I'm never sure if he does it right, because the high levels are really touchy. Sometimes they work, sometimes they don't. It's kind of confusing. That's answer number two. It may also be correct, but it's a little too much information and confusing, right, Because you've got Bob and then you brought in this other guy, Joe, and you've introduced that they maybe don't work. Sometimes, I guarantee you, that turns into an inspection finding. And then the last answer our high level alarms are tested monthly. I usually test them myself when I do the monthly facility inspection. All three of those answers are true, but that last one conveys the information that the inspector needs Are they performing the monthly test that's required and who is doing it? And, like you know the context, I'm doing it when I do my monthly facility inspection. That answer reflects knowledge, preparedness and training and it gives just the right amount of detail.

Amanda: 29:56

All right, bob, let's take a look at those tank inspection records.

Shannon: 30:00

All right answer number one Hmm, what we've got on that shelf over there, help yourself. Well, that's an answer, but it doesn't escort or control the inspector and you're giving them carte blanche access to all of your records, whether they apply to that permit or not. It's probably not the best practice. It also may lead to them being unable to find things because they don't understand your filing system. All right, so answer number two oh yeah, that tank inspector just came out.

Shannon: 30:33

I'm not sure where the reports are right now. Actually, I mean, they should be here. Actually they're in the mail. They're probably in the mail and I know Anchorage Office has them. Anchorage has them, I'm certain of it. I get this answer a lot and while it is factual and true, what it really communicates to an inspection agent is that they don't really know where the report is and the inspection finding will almost certainly be. You need to provide that report as soon as possible after this inspection. And then there's answer number three here we have all the inspection reports for that tank right here, except for this year. This year's inspection report is still being completed by the firm. I'll get you a copy when that comes in. And that's sort of your best possible answer. You're acknowledging that there are other reports that he can look at from the history of the tank and that this year's is still in flux, but you're on top of it and understand that they'll need to have it. That is much less likely to have an inspection finding than the first two answers.

Amanda: 31:36

All right, I got one more question for you. Oh yeah, let's hear it. The transfer operations he just showed me doesn't match the written transfer procedures in your operations manual.

Shannon: 31:47

Okay. Answer number one that's because somebody else wrote that operations manual and they're an idiot. That's not how we really do it here, word for word. I have had that exact answer and it's true. But what it does not do is it does not communicate to the inspector that you're transferring things safely and in accordance with best practices. Possible answer number two yeah, they want us to do all those steps, but then we get busy, so we'll work on it. We'll work on it Again.

Shannon: 32:23

I've heard that exact answer, but what the inspector hears is that they only adhere to all of the steps when there's you know, when there's time. And that's not necessarily a good answer because it means you're skipping steps and usually that means that safety procedures fail-saves time and space to do things a certain way or catch problems have been eliminated, and so I guarantee you an answer like that is going to get you an inspection finding of all personnel need to be trained in safe operations and transfer procedures, you know, within 30 days of this inspection. And then the last answer you know I didn't notice that I'll review the operations manual for my supervisor and make sure I'm doing this transfer right. That answer doesn't necessarily say that you're doing it incorrectly and it doesn't necessarily say that the operations manual is incorrect. It's saying that you'll resolve the conflict or the issue and that may still result in an inspection finding because your ops don't match the manual. But the finding, instead of retrain all your employees, is going to be verify the transfer procedures are correct and then make sure that everybody's following them, which is a much easier thing to do.

Shannon: 33:37

And from the terminal management perspective, as long as you're focusing on the resolution of an issue, if an issue is brought up, you can resolve it in the future without necessarily trashing the past, right? Like saying somebody who wrote that was not good at what they do. Or saying that, yeah, corporate wants us to do it, but we can't really do that on time. As a realist and somebody who lives in real life, I understand that all of those things may be true, but how you communicate with the agency inspector needs to be professional and allow for that professional exchange of information. And some of these other things can be resolved behind the scenes, right? Like if someone truly did write a terrible ops manual for you. Get a contractor in there and fix it. Don't bring that up and present that during an inspection if you don't have to. Okay, that was a lot, amanda. Getting prepared for an inspection can be pretty challenging.

Amanda: 34:31

It sounds like it, so are there any other areas? Terminal managers should be prepared to answer questions about.

Shannon: 34:38

Yeah, I have. I do have one other thing that comes up pretty frequently in inspections that we see quite a bit from all inspection agencies is sort of like preexisting conditions, known areas of noncompliance is also what may be a way to say it. So say, your site had a big compliance issue a year ago where none of the high level alarms were working in. The state sent a letter. If you have an inspector coming out, they will have reviewed your file and you can bet a good amount of money that they're going to ask about the high level alarms and they're going to want to see that that issue has been resolved. I think to sometimes, like after a spill, a lot of inspectors want to see that the spill equipment has been replenished, like if you used a lot of sorbents after a spill event, that you you replace them right, or that if you use boom to prevent fuel from going somewhere, that that boom was clean and returned to the walker and is ready for being deployed again. I also sometimes see things like ongoing issues. Let's say, like the secondary containment area liner has sort of ongoing problems with maybe settlement or the liner condition or something like that. I definitely have seen agencies want to inspect that specific piece of the facility much more closely than they would normally do because it's been an issue of compliance in the past. And then, lastly, if there was an inspection a few years ago and one of the big inspection findings was that no records were being kept, which is unfortunately a little more common than I would like for it to be If they've noticed that a complete lack of record keeping was part of your facility history, they're going to be paying special attention to it during the next inspection interval.

Shannon: 36:26

And when inspection findings are observed over multiple years and multiple inspections, the potential notices of violation get more and more extreme. Right, like the first time, it's more like get it fixed and we won't go to notice a violation. And then the second time is like we noticed you didn't get it fixed. It's now been so many years. Get it fixed or you will get a note of the violation. And then that third time is just going to be NOV.

Shannon: 36:53

For all these notified things, some agencies have less grace. The Coast Guard and the state of Alaska tend to be a little more flexible and allowing time for compliance attainment, but the EPA is not. It's like oh, this was supposed to be fixed and it did not happen. Therefore, you get an NOV, or it needs to be fixed and you get an NOV. The EPA has federal implications and are heavily We've talked about this before that the EPA just does not have any give.

Shannon: 37:23

So they're almost always like if it's, if it's not compliant, then they pretty much go straight to NOV. But I do want to talk about that because I think sometimes terminal managers are like oh, my facility is looking really good because they're not handling the compliance stuff, like maybe someone in the larger city like Anchorage, is handling it for them and they are completely blindsided about this inspector's intense focus on the high level alarms, because that was a previous compliance component. So it would be worth a call. If you do have like an environmental manager or a facilities manager that's in charge of your tank compliance, call those two people, or the same person sometimes, and go through any preexisting compliance issues so that it's not catching you on a wears.

Amanda: 38:11

I am curious about one thing. You had mentioned, that facility managers often joke that they might be going to jail. They don't want to go to jail. What are the actual consequences that that are at play here?

Shannon: 38:25

In general, an inspection agent shows up, they perform the inspection, they issue a letter of inspection findings and then if there's findings that they believe violate regulations, they will then issue another letter called a notice of violation, which is an NOV in our world, and that NOV is typically where money starts getting involved in those monetary values range by agency and time.

Shannon: 38:51

Some of our regulations assess penalties based on like number of days the condition happened. Other penalties are more like based on the damage to the environment or risk or you know, or criminal negligence or any of that kind of stuff, and I think people read some of those really large numbers that are attached to criminal negligence and that's where they get worried about going to jail and having really large amounts of fines. But typically in the bulk industrial world the people who are performing the work and operating the facilities are part of a corporation's structure. The corporation is responsible for compliance and they are also responsible for the fines and the responsibility for upholding the permit requirements or the regulatory requirements. So it's very unusual for any of these agencies to bring personal charges against a specific person and I would argue that the times that I can think of that that has happened, it's almost always on the upper or senior management after extremely gross negligence. It's not that you forgot to train the new guy on how to operate the stormwater control drain valve. Nobody's going to jail over that.

Amanda: 40:11

All right. Well, thank you so much, Shannon, for sharing your insider expertise on the subject. I think that we have a lot of listeners that will feel more prepared for their inspections.

Shannon: 40:22

You're very welcome, and I hope they are more prepared, because in my experience most terminal managers are doing a really good job and if they can present it in just a little bit more polished of a way, with that forethought and preparation, it's going to be better for everybody participating in those inspections, both the terminal manager and the inspection agent, because the inspection agent is going to be getting the information they need and very specific to what they're looking for, and then the terminal manager is able to focus on just what this agent needs.

Shannon: 40:54

Because we didn't really we did not talk about this earlier, amanda, but some of our inspectors, like I was. I just recently visited a terminal manager last week and he had undergone his seventh inspection in two weeks from various agencies. He had a Coast Guard inspection, he had multiple DEC inspections, he also had an ADOT Department of Transportation inspection of his trucks. He had a lot going on, and so I think too that when you have that many inspections of your facility, it helps to be prepared and understand exactly what someone's coming to inspect for you, just so you don't get confused or show the wrong agent the wrong things. Yeah.

Amanda: 41:38

All right, well, thank you so much, Shannon. I appreciate your time and I look forward to our next discussion.

Shannon: 41:44

Yeah, me too. Thanks, Amanda Bye.