In Massachusetts, Oil Exemption Is Not Like CERCLA Petroleum Exclusion


On June 6, the Supreme Judicial Court of Massachusetts released an opinion of considerable importance to petroleum retailers in Massachusetts. In Peterborough Oil Company, LLC v. Department of Environmental Protection, the Court interpreted the term “Oil” as used in the Massachusetts Department of Environmental Protection’s (DEP) regulation (the “Oil exemption”) implementing the Massachusetts Oil and Hazardous Materials Release Prevention Act. The Act is in many ways the state’s counterpart to the federal Superfund or Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). The Court ruled that the term “Oil,” as defined in Section 2 of the Act and interpreted by the DEP, is not subject to the kind of “petroleum exclusion” that is part of CERCLA. Indeed, under CERCLA, leaded gasoline, the substance at issue here, would likely have been exempted by CERCLA from most cleanup requirements.

Peterborough owns a property that was formerly the site of a gasoline service station from which there was a release in 1994 and which Peterborough has been cleaning up and monitoring ever since. In 2007, the DEP promulgated an “oil exemption” in its regulations addressing the cleanup and remediation of spills and releases of hazardous materials within a specific radius of a public water supply. The oil exemption is located in DEP rules at 310 Mass. Regs. Section 40.0924(2)(b)3a—“contamination is limited to Oil.” Section 2 of the Act defines “Oil” as “insoluble or partially soluble oils of any kind or origin or in any form, including, without limitation, crude or fuel oils, lube oil or sludge, asphalt, insoluble or partially insoluble derivatives of mineral, animal or vegetable oils. The term shall not include waste oil, and shall not include those substances which are included in 42 USC Sec. 9601(14). ”

After the Oil exemption was created, Peterborough submitted a revised remediation plan, arguing that since there was now an Oil exemption, the leaded gasoline should be interpreted as being “Oil” under the DEP regulations, and if so, its remediation obligations may well have been satisfied. The DEP disagreed, stating that it has always interpreted the Oil exemption to be limited to petroleum hydrocarbons naturally occurring in oil, and not to such gasoline additives as lead.

Now the Court has decided that the DEP was correct in its consistent interpretations of its own rule, which it found to be reasonable, given the policies behind the enactment of the Act and the remedial purposes it is intended to serve. Before the DEP promulgated the Oil exemption, it studied the hazards posed by spills of different chemicals released in soil and groundwater, and the DEP concluded that the release of petroleum hydrocarbons pose a low safety risk to specified public water supply systems. The Court acknowledged the fact that the Act creates “greater liability for cleanup of oil spills than does CERCLA,” noting that the Act does not incorporate CERCLA’s petroleum exception. Consequently, “Oil” as defined by the DEP in its regulations, does not extend to releases or spills of leaded gasoline.