Intro to the Issue
Enforcement and regulation of underground storage tanks is a constant issue for the petroleum marketing industry. By 1998, all operators were required to upgrade their storage tank systems with spill prevention and leak detection equipment. The majority of NACS members are fully compliant. Yet, with the proliferation of water contamination from the gasoline additive MTBE, the status of tanks and the frequency of tank releases has come under greater scrutiny. In fact, some states have begun to require all tanks be double-walled and many state regulators are calling for revision of federal law to protect against tank releases.
In 2001, the General Accounting Office (GAO), the investigative arm of Congress, issued a report which found that 29% of regulated tanks were not operated or maintained properly. The report cited poor training of owners, operators, installers, and removers as the primary causes and reported that most compliance problems were found with small independent businesses, non-retail and commercial companies, and local governments, who claim they cannot afford or provide adequate training.
Petroleum marketers contribute 0.10 cent per gallon of gasoline they sell into the Federal Leaking Underground Storage Tank (LUST) Trust Fund. These monies are intended to assist state programs to inspect and enforce tank regulations and to assist with the remediation of tank releases. At the end of FY05, the Administration reported a fund balance in excess of $2.5 billion, revenues from fees of $190.8 million and interest earned on the balance of $77.7 million. Yet, the appropriations request was for only $69.4 million.
In addition, there is very little accountability for state program operations. The GAO found that 22 states never inspect all tanks and that 10 states inspect all tanks less frequently than every three years. In addition, enforcement throughout the nation is inconsistent and inadequate. In many cases, as supported by GAO, local government agencies that operate tanks have not been held liable for failure to comply with the 1998 upgrade requirements, nor have Native American tribes.
Why You Should Care
Convenience store owners have invested millions of dollars to ensure their underground storage tanks are compliant with current regulations, while many local, state and federal government owners and operators, as well as some Tribes and commercial fleets, continue to dispense fuel from non-compliant tanks. This creates an unlevel playing field and increases the likelihood of petroleum releases, thereby giving greater momentum to those advocating a new round of tank regulations. New rulemaking could force the convenience store industry to spend millions more to once again change their systems.
NACS believes that calls for a new round of tank regulations are premature, especially considering the findings of the GAO report. GAO supported NACS' assertion that not all operators are in compliance with current regulations and that enforcement must be improved to bring these tanks into compliance. NACS believes additional funds from the LUST Trust Fund should be appropriated, sent to the states and used for enforcement and inspection activities.
On August 8, 2005, President Bush signed into law the Energy Policy Act of 2005. Contained within that legislation were dramatic reforms to the UST program, implementing many of the recommendations made by the GAO. This law:
- Requires a minimum of 80 percent of appropriated funds to the States;
- Expands the authority for States to use these funds to conduct enforcement and inspection activities;
- Prohibits States from diverting UST funds to other, non-UST purposes;
- Requires States to inspect by August 2007 every tank they have not inspected since the December 1998 compliance deadline;
- Requires States to inspect every tank once every three years beginning in August 2007 (allows States to request a one-year extension during the first three-year cycle if resources were insufficient to complete the inspections);
- Requires every operator and those employees responsible for UST operations to be appropriately trained according to the individual's level of responsibility;
- Requires States to publicly report the status of compliance of tanks within their jurisdiction;
- Requires Federal and State governments, as well as Tribal organizations, to report the status of compliance of USTs they owned and operate;
- Affirmatively waives sovereign immunity for Federally owned USTs, subjecting them to the enforcement activities of State officials;
- Prohibits the delivery and/or receipt of product into an UST known to be non-compliant with UST regulations;
- Requires States to either mandate secondary containment for new UST system and dispenser installations or to require equipment manufacturers and installers to demonstrate financial responsibility to cover remediation of releases caused by their manufacture or installation; and,
- Dramatically increases the authorization for Congress to appropriate funds to the States to pay for these reforms.
At the end of 2005, the Environmental Protection Agency was beginning the lengthy process of revising the regulations to reflect the changes made by the Energy Policy Act of 2005 and NACS was working with a diverse group of organizations to secure an increase in appropriations to the States.