EHS Management, Regulatory Developments

Understanding UST Obligations

A February 23, 2022, Consent Agreement (CA) entered into between the EPA and York Fuel Stop Inc. highlights the importance of understanding and following regulatory requirements for underground storage tanks (USTs).

York Fuel’s alleged violation was for failure to maintain financial responsibility, as determined during the Pennsylvania Department of Environmental Protection’s (PA DEP) March 28, 2019, inspection of the company’s York, Pennsylvania, facility.

Background

The U.S. Congress required the EPA to develop a UST regulatory program in the late 1980s because it concluded that USTs were subject to leaks and spills, otherwise referred to as releases, that could cause substantial groundwater and subsurface contamination. USTs are governed by the Solid Waste Disposal Act (SWDA) and the Energy Policy Act of 2005.

“The UST provisions of the Energy Policy Act focus on preventing releases,” states the EPA UST Laws and Regulations website. “Among other things, it expands eligible uses of the Leaking Underground Storage Tank (LUST) Trust Fund and includes provisions regarding inspections, operator training, delivery prohibition, secondary containment and financial responsibility, and cleanup of releases that contain oxygenated fuel additives.

“The LUST provision of the American Recovery and Reinvestment Act appropriated $200 million to assess and clean up leaks from [USTs]. The vast majority of the money is allocated to states and territories in the form of assistance agreements to address shovel-ready sites within their jurisdictions.”

Initial UST regulations were issued in 1988 and were modified in 2015. The regulations under 40 Code of Federal Regulations (CFR) 280 and 281 cover:

  1. Technical requirements
  2. Financial responsibility
  3. State program approval (SPA) objectives

Technical requirements

The technical requirements of the UST regulations are designed to prevent and detect system releases.

Preventing releases

“The regulations require owners and operators to properly install UST systems and protect their USTs from spills, overfills, and corrosion and require correct filling practices to be followed,” continues the EPA UST Resources website. “In addition, owners and operators must report the existence of new UST systems, suspected releases, UST system closures, and keep records of operation and maintenance.”

Spills are prevented by spill buckets that contain drips and spills around the UST’s fill pipe. These buckets are typically outfitted with pumps or drains to remove liquids.

Overfill protection includes automatic shutoff devices, overfill alarms, and flow restrictors. USTs that never receive more than 25 gallons at a time are not subject to overfill protection requirements.

Detecting releases

Owners and operators are required to detect releases from their UST systems.  There are three categories of release detection:

  1. Interstitial
  2. Internal
  3. External

Within these three categories are seven release detection methods:

  1. Secondary containment and interstitial monitoring
  2. Automatic tank gauging (ATG) systems
  3. Manual tank gauging
  4. Statistical inventory reconciliation (SIR)
  5. Continuous in-tank leak detection (CITLD)
  6. Groundwater monitoring
  7. Vapor monitoring

Owners are also subject to regulations related to installation, operations, maintenance, reporting, and recordkeeping. 

Financial responsibility

In creating UST regulations, Congress wanted UST owners to demonstrate they have the financial capability to pay for a cleanup in the event of a release. The regulations provide several options to demonstrate financial responsibility:

  • Obtain insurance coverage from an insurer or a risk retention group.
  • Demonstrate self-insurance using a financial test.
  • Obtain corporate guarantees, surety bonds, or letters of credit.
  • Place the required amount into a trust fund administered by a third party.
  • Rely on coverage provided by a state financial assurance fund.

The amount of coverage owners are required to have depends on the industry and the size of the organization.

The EPA publication Dollars and Sense: Financial Responsibility Requirements for Underground Storage Tanks contains detailed information on these requirements.

SPA objectives

State and local governments are better positioned to regulate USTs due to the size and diversity of regulated entities:

  • State and local authorities are closer to the situation in their domain and are in the best position to set priorities.
  • Subtitle I of the Solid Waste Disposal Act allows state UST programs approved by the EPA to operate in lieu of the federal program.
  • The SPA regulations set criteria for states to obtain the authority to operate in lieu of the federal program.
  • State programs must be at least as stringent as the EPA’s.

After the promulgation of the initial regulations, most states decided to obtain authority to regulate USTs.

State requirements for demonstrating financial responsibility can be more stringent than federal rules, which is where York Fuel allegedly made its error.

State and local governments have four additional financial responsibility compliance mechanism options available:

  • A bond rating test
  • A financial test
  • A guarantee
  • A dedicated fund

Pennsylvania maintains an Underground Storage Tank Indemnification Fund (USTIF), designed to “to reimburse eligible participants for reasonable and necessary expenses incurred from releases into the environment.”

Distributors, facility and tank owners, and tank installers are required to pay various fees into the fund to remain compliant.

According to the CA signed with York Fuel, at the time of the company’s inspection, it was “not participating in the Pennsylvania [USTIF],” Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., says in a JD Supra article. “This failure to participate is stated to have been due to failure to pay on a timely basis all applicable fees and conforming with all other requirements for participation in the [USTIF] regarding one of the USTs containing diesel fuel.”

Although York Fuel was only assessed a $6,000 civil penalty, the company’s alleged noncompliance was regarding a single UST. It is easy to see the importance of maintaining financial responsibility and creating mechanisms to ensure local fees are paid in a timely manner, as many owners have multiple USTs at their locations.