A challenging economy with tightening federal and state budgets is working to make an uncertain environment for regulating and enforcing the rules of the U.S. Environmental Protection Agency’s underground storage tank program.
Since the mid-1980s, environmental concerns have mounted around the effects of gasoline leaking from underground storage tanks. In 1984, legislation in the form of Subtitle I of the Resource Conservation and Recovery Act required the EPA to develop programs to address the issues. However, the EPA and states lacked the funding to oversee cleanup activities when the owners failed to do so. Congress then established the Leaking Underground Storage Tank (LUST) Trust Fund, which is financed by a 0.1 cent tax on each gallon of motor fuel sold in the U.S., although this provision has recently expired and is up for renewal in Congress.
The Energy Policy Act of 2005 addressed the LUST program and established new requirements for states and tank owners to ensure that all USTs are compliant with federal regulations. States are now required to inspect every tank at least once every three years and must report, along with the federal government and tribes, the status of the compliance of these tanks, including ones they own. Additionally, a product delivery cannot be made to a known non-compliant UST. Also, tank operators must be appropriately trained according to their responsibilities.
The EPA states that at the end of fiscal year 2010, there were approximately 597,000 federally-regulated, active USTs at about 215,000 sites across the country. Through the LUST fund, the EPA relies on state programs to enforce these new mandates.
“Money is rarely used for cleanups of sites,” said Dan Gilligan, president of the Petroleum Marketers Association of America. “The lion’s share goes to administrative programs.” The dollars that actually go toward cleanups are usually for orphaned sites, he said. However, the PMAA is still grateful for the working administrative programs.
“State agencies are important to keep practices in place and to deal with regulators locally,” Gilligan said. Without those funds going to state program administrations, fees could possibly be raised on tank owners.
The National Association of Convenience Stores has identified the new mandates as a possible issue for retailers if additional federal funding is not made available. NACS warned in its recent “Brief Guide to NACS Government Relations Issues” that if states struggle to comply, they might abandon their programs, forcing retailers to be directly accountable to federal enforcement.
According to the EPA’s website, in FY 2009, the UST prevention and cleanup programs received more than $100 million to prevent, detect, and clean up releases from federally-regulated USTs.
“PMAA will be sending out a letter to the Hill urging Congress to release more of the funds,” said Sherri Cabrera, vice president of PMAA. The Energy Policy Act of 2005 had authorized $200 million to be awarded to the states’ UST programs each year, but so far only about $110-115 million actually gets sent out. “Our petroleum marketers actually put in about $190 million.” But if increase in funding doesn’t happen, Cabrera said states should be allowed more flexibility on how they run their programs.
In recent years, the programs have received a bit of a boost in funding. The American Recovery and Reinvestment Act (ARRA) of 2009 provided a one-time allocation of $200 million to assess and clean up UST leaks. Almost 90 percent of the money was provided directly to states, territories, and tribes to implement their prevention and cleanup programs.
In the EPA’s FY 2010 Annual Report on the Underground Storage Tank Program, states and territories spent approximately $66.9 million of their LUST cooperative agreement money through the end of fiscal year 2010 awarded by the LUST Recovery Act. The EPA spent an additional $2.3 million to help clean up tank releases in Native American country. As of Sept. 30, 2010, 56.3 percent of state grants provided by LUST ARRA had yet to be spent.
The review of the UST program for last year boasts some achievements for states, territories, tribes and the EPA. According to the 2010 Annual Report, the EPA set a goal for 65.5 percent of all active USTs to be in compliance with leakage preventive and detection requirements. More than two-thirds, or 68.6 percent, of USTs were found to be compliant, exceeding the goal.
By the first three-year inspection mandate on August 2010, the EPA found that almost all states met the requirement. Also, the number of new UST releases reported experienced an 11 percent drop, with around 6,300 new leaks reported last year. The EPA has beefed up their release prevention requirements, as also mandated in the Energy Policy Act of 2005, by producing guidelines to help states carry out the rules. The EPA reports $32.4 million was provided to states in fiscal year 2010 for UST prevention activities.
The cleanup process of the program has also made some strides recently. The EPA reports that about 80 percent of 495,000 releases reported since the beginning of the program have been cleaned up by UST partners. That leaves approximately 93,000 releases remaining. In FY 2010, the EPA’s goal was to clean up 12,250 LUST sites. Although the goal fell a bit short, 11,591 sites were completed.
“Colorado received $2.54 million in ARRA funding. We were able to do work at 40 LUST sites, and closed 9 sites,” said Mark Larson, executive director at the Colorado Wyoming Petroleum Marketers Association. “Wyoming received $929,000 in ARRA funding. Twenty-seven LUST sites were worked on with the funding and two were completed and closed.”
However, some states had a mixed experience with the additional funding, as the executive director of the Independent Connecticut Petroleum Association Gene Guilford reported. Guilford said he hasn’t seen much of the ARRA dollars making a difference in the UST program because the state’s legislature keeps allocating the money elsewhere.
Preventing the state’s legislature from using funds for activities other than storage tank cleanup functions has been important to the Colorado program’s smooth operation, said Larson. “A few years ago, OPS (the Division of Oil and Public Safety) sought and was allowed to fund enforcement and clean up oversight out of the fund. This provision has worked well in an environment of drastic budget cuts and personnel reductions.”
The key to success in Colorado, which has an exemplary storage tank program and has been held out as a national model by the EPA, is that the regulating administration has consistently included the regulated community. “OPS has listened and infused private industry practices and norms into regulation updates while assuring all compliance thresholds are met,” Larson said. “No, the marketers and retailers don’t always agree, but then again, the division has also bent when mandated practices seemed overly burdensome or excessive.”
The EPA has begun a regulatory review process to evaluate existing regulations, soliciting input from a variety of stakeholders, including tank owners. This review has the potential to make it easier for tank owners by eliminating outdated requirements. However, as NACS explains, the process could also result in additional compliance burdens imposed on tank owners.
Looking towards the future, the EPA is addressing alternative fuels concerns. The agency is clarifying how tank owners and operators can be in federal compliance if they store increased levels of biofuels. The EPA requested comments on the draft guidance, published in the Federal Register on Nov. 17, 2010. The final guidance is planned to be issued sometime in 2011 after considering the public commenting.
The EPA is working with the Department of Energy to understand the impact of mid-level ethanol blends stored in existing tank systems, as well as to evaluate the material compatibility of USTs and dispenser materials with these mid-level ethanol blends. Also, the EPA is researching the issues associated with increased biofuels use. The agency’s Office of Research and Development is creating a test and quality assurance plan that evaluates automatic test gauging systems in USTs storing ethanol-blended fuels as well as working to understand the accelerated corrosion seen in UST sumps storing ethanol blends.