Flag_of_CaliforniaCalifornia’s Proposition 65, also called the Safe Drinking Water and Toxic Enforcement Act, requires businesses to notify Californians about significant amounts of chemicals in the consumer products they purchase, in their homes or workplaces, or that are released into the environment. Under recent changes to the law, companies in the oilfield business and gasoline service business will need to make warning signs more specific in order to comply with Proposition 65.

Proposition 65 is intended to enable Californians to make informed decisions about protecting themselves from exposure to over 900 chemicals known to cause cancer, birth defects, or other reproductive harm, such as phthalates, lead, cadmium, and formaldehyde. Thus, warning labels, signs, and notices are required to be placed on certain chemical-containing consumer products and in certain areas to warn the public.  Failure to provide Proposition-65 compliant warnings can expose companies to significant monetary penalties of up to $2,500 per violation per day. Warnings must be “clear and reasonable,” and what language constitutes a fair and reasonable warning has been subject to considerable confusion over the years; thus, Proposition 65 adopted certain “safe harbor” language that is deemed to comply with the law.

On August 30, 2016, after two years of rulemaking, California’s Office of Environmental Health Hazard Assessment (OEHHA), the agency that administers Proposition 65, adopted amendments to the Proposition 65 regulations that govern the “clear and reasonable” safe harbor language. The amendments repeal and replace Article 6 of Title 27 of the California Code of Regulations. The new standards, which are intended to provide Californians with more detailed information regarding potential chemical exposures, go into effect August 30, 2018.  One notable exception to the effective date exempts warnings set forth in court-ordered settlements or consent judgments prior to the effective date; these warnings will continue to be deemed “clear and reasonable” for the exposures covered by those judgments. Until the effective date, warnings may use either the current warning language under existing 2008 regulations or the new warning language.

The new standards include changes to the safe harbor warning language for consumer products, and they also clarify the responsibilities of manufacturers and other parties in the chain of distribution for consumer products. The amendments directly impact the energy industry as well: the safe harbor warning language is now much more specific for environmental and occupational exposures to petroleum products from industrial operations and facilities, and for gas stations and vehicle repair facilities. The existing safe harbor warning under 2008 regulations merely require the warning for these facilities to state: “This area contains a chemical known to the State of California to cause birth defects or other reproductive harm.”

Under the new amendments, oil and gas companies, refineries, pipeline facilities, and the like will need to make their environmental and occupational warnings regarding petroleum products much more specific in order to fall under Proposition 65’s safe harbor provisions.  The new safe harbor petroleum warning is accompanied by a yellow triangle symbol with exclamation point, and the warning states as follows:

WARNING: Crude oil, gasoline, diesel fuel, and other petroleum products can expose you to chemicals including toluene and benzene, which are known to the State of California to cause cancer and birth defects or other reproductive harm. These exposures can occur in and around oil fields, refineries, chemical plants, transport and storage operations, such as pipelines, marine terminals, tank trucks, and other facilities and equipment. For more information go to: www.P65Warnings.ca.gov/petroleum.

The petroleum products warnings can take the form of a sign posted at all public entrances to the area, notice provided via mailing to affected occupants, or publication in a newspaper.

The new amendments also change the safe harbor warnings for environmental exposures to listed chemicals at service stations and vehicle repair facilities.  The warnings must now be placed at each gas pump at a service station, and at each public entrance of a vehicle repair facility. To qualify for the safe harbor, the warning must include the yellow triangle symbol with exclamation point and be worded as follows:

WARNING: Breathing the air in this area or skin contact with petroleum products can expose you to chemicals including benzene, motor vehicle exhaust, and carbon monoxide, which are known to the State of California to cause cancer and birth defects or other reproductive harm. Do not stay in this area longer than necessary. For more information go to [www.P65Warnings.ca.gov/service-station or www.P65Warnings.ca.gov/vehicle-repair].

If your company is making changes to its products, operations, or facilities, now is a good time to consider updating your warnings to be consistent with the new warning language ahead of time. Otherwise, be thinking about modifying your warnings at some point in the next year or so to be ready when the new regulation takes effect in the summer of 2018. There will likely be an uptick in the number of Proposition 65 notices and lawsuits once the new regulation takes effect, so companies should be aware of these changes and evaluate their warning obligations prior to the regulation’s effective date.