Environmental Strategist, between the lines: If you work with underground storage tank (UST) owners, or businesses that buy and sell land, please share this competitive environmental intelligence.
The last major UST report that came out I said the government was low in their guesstimate on the number of leaking tanks and the cost to clean them up and I still say they are low with this report.
However, for sake of strategizing, let’s assume this report is accurate, what is it telling us? On average, each state has in excess of 2.300 leaking tanks. Keep in mind, this report is only addressing gasoline tanks
$10 billion has been spent to date to clean up leaking UST’s. They anticipate needing an extra $12 billion to clean up 54,000 of the known 117,000 leaking UST’s, but they only have $2.6 billion in funds. Where will the extra money come from? Fines and Penalties for non-compliant UST owners/operators? Increased scrutiny on current UST owners/operators? Raise the tax?
The problem is growing because 43 states said they expect to find an additional 16,700 leaking UST’s in the next five years. I bet they find a lot more than 16,700. Are you a land developer? Even though you’re granted innocent land owner defense by performing environmental due diligence, it does not protect you from impacted third party suits for bodily injury, property damage and business interruption.
The report found some states UST funds lack the money to pay for timely tank cleanups. This means if your strategy is for the state to fund the cleanup, by the time funds are disbursed a tank owner could be up to their eyeballs in lawsuits from impacted third parties.
Only one third of the states currently assure the EPA they are checking to see if tank owners are covered by insurance. This means when it comes time for the EPA to release cleanup funds to the states, they will probably favor states that can show they have an effective program to assure impacted tank owners have proper financial assurance in place. It would not surprise me to see more scrutiny given to confirmation of proper financial assurance being in force by regulated UST owners/operators. If a UST owner is not in compliance the tank/s will get red tagged and no product is allowed to go into the tank/s. What kind of business interruption could this cause to the tank owner/operator?
Cleanups of Leaking Fuel Tanks Lag; Job Could Cost $12 Billion
WASHINGTON — It will cost at least $12 billion to clean up contamination from tens of thousands of gasoline storage tanks that are leaking underground, congressional auditors say.
That is far more than the $72 million that Congress and the Bush administration have provided each year, according to the report Thursday from the General Accountability Office.
The Environmental Protection Agency, which oversees the cleanups, has already spent more than $10 billion to reduce the contamination over the past 20 years caused by hundreds of thousands of leaking tanks, many of them found at gas stations and convenience stores.
Yet some 117,000 faulty tanks still await cleanups, according to the latest figures current as of September 2005.
The GAO’s $12 billion estimate would pay to remove 54,000 leaks from underground storage tanks that are either abandoned or no one can be held accountable for cleaning up. Another 63,000 leaking tanks would be paid for by pump stations, store owners or other operators of the leaking tanks, along with insurers and state funds, according to the GAO.
The problem is growing, however. Forty-three states said they expect to find 16,700 new leaks in the next five years, many requiring at least some federal money for the cleanups.
The lag in cleanups isn’t necessarily due to lack of money, according to the GAO.
Every time a motorist pays for a gallon of gas, a tenth of a penny goes into a trust fund to remove the contamination. The fund now has about $2.6 billion and is expected to reach $3 billion before the end of 2008. Congress created the trust fund in 1986 because of concerns about contamination from leaking tanks at gas stations, but annually only a small fraction has been appropriated for cleanups. Most has sat in the Treasury to help counter federal budget deficits.
Rep. John Dingell, D-Mich., who chairs the House Energy and Commerce Committee and who released the GAO report on Thursday, called the situation an “inexplicable failure to use available resources to speed the cleanup of pollution that is likely to spread.”
The failure to clean up the tank waste is “contaminating our water supplies with MTBE and other carcinogens, unnecessarily risking public health,” said Rep. Hilda Solis, D-Calif., who along with Dingell had requested the report.
Leaking underground gasoline tanks for years have been blamed for much of the MTBE — or methyl tertiary-butyl ether — found in drinking water supplies in at least 36 states. More than 150 lawsuits have been filed seeking damages because of problems with MTBE, which until recently has been a widespread gasoline additive that helped curb air pollution.
The GAO report found some states’ financial assurance funds lack the money to pay for timely tank cleanups. It said tank owners covered under the state programs usually pay only a small deductible when tanks leak, with the government picking up most of the tab.
The Energy Policy Act of 2005 required underground storage tanks to be inspected every three years. The EPA is drafting guidelines for how the agency and states should comply with the new inspection
requirements, said Susan Parker Bodine, head of EPA’s Office of Solid Waste and Emergency Response, in a written response to the GAO report.
Only about one-third of states currently assure the EPA they are checking to see if tank owners are covered by insurance, the GAO said. Bodine said the agency also will consider studying better ways to distribute money from the trust fund and whether the state funds and insurance are effective enough.
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On the Net:
House Energy and Commerce Committee: http://energycommerce.house
EPA: http://www.epa.gov/OUST/index
Source: Associated Press