15 ELR 10135 | Environmental Law Reporter | copyright © 1985 | All rights reserved

The Enemy Below: EPA Plans Action on Leaking Underground Storage Tanks

Leonard A. Miller and Robert S. Taylor

Editors' Summary: In recent years environmental law has gone underground. The realization that groundwater has been widely contaminated by toxic substances from chemical dumps, pesticide application, and other sources has focused attention on subsurface pollution. Recently a new culprit has been identified — leaking underground tanks in which oil, gas, chemicals, and wastes are stored. Congress perceived the problem as serious enough to warrant addition of a new program to the Resource Conservation and Recovery Act (RCRA) at the end of last year. The authors examine the problem of leaking underground tanks, Congress' far-reaching response in the new Subchapter IX of RCRA, and the Environmental Protection Agency's (EPA's) initial efforts to implement the complex requirements. They highlight the special challenges posed by the fact that EPA must regulate a vast community of tank owners, many of whom have been untouched by earlier federal pollution control laws, and suggest a number of ways in which EPA and the regulated community can improve the chances of success.

The authors practice environmental law with the firm of Swidler, Berlin & Strelow, Chartered, in Washington, D.C. Mr. Miller was with EPA from 1967 to 1980. He started in the air program, worked in Region X, Seattle, as Enforcement Division Director, and headed the Water Permit and Enforcement Program at EPA headquarters. Mr. Taylor has concentrated in his legal career on waste water and harzardous waste issues. The authors wish to acknowledge the assistance of Dr. Gary Liberson, President, Lloyd Associates, Inc., who provided insights derived from his inspections of hazardous waste disposal facilities for insurance purposes; and the efforts of Dan Prater, Legislative and Regulatory Assistant at Swidler, Berlin & Strelow, who contributed much of the initial research for this article.

[15 ELR 10135]

Leakage from underground storage tanks has become a major health and environmental concern for both industry and government. Congress recently reported that of 2,000,000 underground tanks in the United States containing hazardous substances or gasoline, an estimated 100,000 (five percent) are leaking, and an additional 350,000 (17 percent) are expected to leak in the next five years.1 The number of leaking tanks will surely climb as the age of the tank population increases, with some experts predicting that as many as 75 percent of existing tanks will begin to leak over the next 10 years.2 For years the common and preferred practice of industry has been to store petroleum products, toxic or flammable substances, and certain hazardous wastes in underground tanks to reduce the chances of fire, explosion, and other hazards. However, this practice has resulted in other significant safety, health, and environmental risks, as hidden leaks from underground tanks can contaminate the surrounding soils, surface water, and groundwater. According to the Environmental Protection Agency (EPA), there is growing evidence that leaking underground storage tanks (LUSTs)3 are a leading cause of groundwater contamination.4

The road from recognition of the LUST problem to enactment of federal legislation has been short. Although underground tanks have been used for storage for many [15 ELR 10136] years, EPA first formally identified underground tanks as a potential source of groundwater contamination in November 1983 at a hearing before the Senate Committee on Environment and Public Works.5 Over the preceding few years, several states had reported groundwater contamination caused by leaking tanks and had requested expanded federal involvement, including regulation, to help resolve the problem.6 Because approximately half the population of the United States depends on groundwater for drinking water, increasing evidence of and publicity concerning contamination of groundwater from LUSTs suggested a potentially severe public health threat and the 98th Congress mandated a regulatory response.7 In November 1984, President Reagan signed into law the Hazardous and Solid Waste Amendments of 1984,8 amending the Resource Conservation and Recovery Act (RCRA).9 Including in the amendments is a new Subchapter IX which creates a regulatory program governing underground tanks used for the storage of regulated substances.10

This article describes the LUST problem, summarizes the new RCRA requirements, and describes the current elements of EPA's evolving plan for developing an underground tank regulatory program. Implementing an effective LUST program promises to be an exceptionally difficult task; the article concludes by considering several factors that may influence EPA's ability to carry it out.

The LUST Problem

Congress has defined an underground storage tank as:

[A]ny one or combination of tanks (including underground pipes connected thereto) which is used to contain an accumulation of regulated substances, and the volume of which (including the volume of the underground pipes connected thereto) is 10 per centum or more beneath the surface of the ground.11

Excluded from the definition of regulated tanks are farm and residential tanks of limited capacity used for motor fuel and home heating fuel, and certain other tanks not used for the storage of regulated substances.12 Despite the numerous exceptions, the definition remains remarkably broad, and could encompass many tanks not considered by the owners as "underground," especially since connected underground pipes are thrown into the equation.

The majority of underground storage tanks, in fact all but a very small number, contain raw materials — products that are an integral part of a manufacturing operation. And it is likely that most of the leaks from these tanks are small (or very gradual), for, if a leak were major (or sudden), the owner probably would lose sufficient raw material to impact production, and would take remedial action. It is precisely the small leaks of highly mobile solvents and petroleum products (perhaps continuing over long periods of time) that the RCRA amendments seek to control.

That leaks from underground tanks are usually small and not sudden does not mean that the situation is not serious. EPA has reported that a leak of one-half gallon per day of certain substances can contaminate the water supply for 50,000 people.13 Three factors bring home the severity of the problem. First, the largest classes of hazardous substances found during Comprehensive Response, Compensation, and Liability Act (CERCLA) investigations have been heavy metals and volatiles; when volatiles are stored in bulk, they usually are stored in underground tanks. Second, tank owners historically have not replaced tanks until leaks have been discovered. This means that the most dangerous contaminants in terms of mobility and toxicity — volatiles — are typically the least protected materials at a facility. Third, underground tanks are difficult to monitor. Detecting leaks is complicated and expensive. Small, continuing leaks may not be obvious in a visual inspection of the tank site.

Discharges from underground tanks usually occur in one of three forms:14

1) spills — due to overfilling or poor housekeeping;

2) leaks — caused by corrosion of tank or piping; and

3) reptures — due to tank weakness (particularly fiberglass tanks).

Of these three primary causes of tank discharges, leakage is the most prevalent. A survey by the American Petroleum Institute indicates that over 90 percent of leaks in steel tanks result from corrosion.15 Corrosion is primarily an electrical process caused by movement of an electrical current. If a current passes through a steel tank, corrosion will occur at the point where the current leaves the tank. Movement of the current weakens the metal and eventually can create leaks. Variations in soil type or soil properties [15 ELR 10137] such as acidity or resistivity, moisture, metabolic activity of certain microorganisms, or juxtaposition of dissimilar metals can contribute to corrosion.

It is difficult in practice to detect small leaks in underground tanks. Many tank operators still use large dipsticks to measure the level of liquid within their tanks. This method is notoriously imprecise. No one is precisely sure what a quarter-inch or an eighth-inch change in the level of liquid represents in terms of amount of liquid remaining in the storage tank.Other factors affecting the accuracy of a dipstick measurement are change in temperature and the way in which the contents are used.

Manufacturers have been reluctant to perform any kind of labor-intensive inventory control. Usage at manufacturing plants does not demand careful control of liquids, and since many of the liquids commonly stored in underground tanks are relatively inexpensive, there has not been much incentive for plants to develop more sophisticated and costly ways to control small losses. A consultant close to the environmental insurance industry reports that insurance companies historically have recommended that underground tanks, at a minimum, be tested daily with a dipstick, and annually by use of an integrity test. Reportedly, relatively few facilities have followed these guidelines.16

The current generally accepted view is that underground tanks most likely will develop leaks at installation or near the end of their useable life — usually after 15 years. Insurance industry records indicate that tank leakage increases after 15 years, and that the average claim for underground tanks at that time is $300,000. Still, owners are understandably reluctant to replace or repair tanks until they have some indication that they are leaking.17 Thus, a regulatory program aimed solely at checking tank integrity shortly after installation and requiring replacement of tanks at the end of a calculated "useable life" might go a long way toward solving a large part of the LUST problem.Such simplifying suggestions must be accompanied by a cautionary note, however. Our knowledge of LUST is far from complete as the subject has not received the scrutiny in the past that it will in the future. Indeed, unconfirmed reports indicate that recent EPA studies will show that a significant percentage of tanks spring leaks soon after installation, and long before their useable life has elapsed.

New RCRA Requirements

The RCRA amendments extended the scope of regulation from waste storage tanks to raw material and product storage tanks. Prior to the amendments, RCRA, which governs the generation, transportation, treatment, storage, and disposal of hazardous wastes, gave EPA authority in Subchapter III to regulate disposal and storage of hazardous wastes in underground storage tanks. The new Subchapter IX gives EPA authority to regulate tanks containing hazardous substances other than those already regulated — i.e., those defined under CERCLA as well as petroleum products (including crude oil or any fraction that is liquid) — and imposes performance and monitoring standards of facilities storing these substances in underground tanks.18 This expansion of RCRA's coverage, from the waste products to the raw materials of production, is a basic change in regulatory coverage that many manufacturers may perceive as intrusive.

The expansion of LUST regulation, however perceived, may continue. The LUST program outlined in the amendments seeks to ensure that new underground storage tanks are properly constructed and installed, and that existing tanks are operated and maintained so as to minimize the possibility of leaks. EPA's primary role is standard setting, but includes analysis of the need to extend regulation to additional categories of tanks. The Agency is required to issue standards for design, construction, and installation of new tanks, and to promulgate criteria for sound tank management capable of prevention, detection, and correction of leaks. Pursuant to § 9009, EPA also must complete a study of underground tanks used for the storage of petroleum products within 12 months of enactment (by November 1985), and a study of all other underground storage tanks, including the tanks currently exempt from regulation, two years later (by November 1987).19 Also, by November 1987, the Agency is required to conduct a similar study of farm and heating oil tanks.20 On the basis of the findings, EPA will submit to Congress recommendations as to whether these tanks should be placed under regulation.

EPA's LUST Program

The LUST program could become one of the largest regulatory programs ever implemented by EPA, and one of the most difficult to administer fairly.21 The Agency has identified seven goals and objectives to guide the development and implementation of the program:

Regulation Development. The Agency intends to meet congressional deadlines for the program, and will emphasize development of technical and state [15 ELR 10138] program approval regulations during the first few years.

Regulatory Strategy. The Agency intends to develop regulations for petroleum and other hazardous substance tanks, new and existing tanks, corrective action, and state program approval within the same time frame (by February 1987) and on generally the same schedule.

Innovative Approaches. Attention will be given to innovative regulatory and nonregulatory approaches in carrying out the program, due to the enormous size and diversity of the regulated community and the potential for significant economic effects. These may include the development of technical manuals, certification and training programs for tank installers and testers, incentives for voluntary tank inspection and replacement programs, and technical assistance.

Groundwater Protection Strategy. The Agency will give careful consideration to implementing its Groundwater Protection Strategy in all phases of regulatory development.

Outreach and Consultation. The Agency will develop a communication strategy that includes an extensive program of public outreach and consultation in order to achieve maximum voluntary compliance.

State Participation. State participation in the regulatory development process, as well as a program of guidance and grant assistance to the states, will be part of an overall strategy to maximize state involvement in the program.

Small Businesses. The Agency will give special consideration to the problems of small businesses.22

EPA has begun to make key decisions that will shape the LUST program. It reportedly will not differentiate between new and existing tanks, or between petroleum and chemical product tanks; will request legislative action to revoke CERCLA's current petroleum exclusion (in order to ensure that funds are available for corrective action), and to set up a separate fund for discharges from abandoned tanks; and will develop a site prioritization system for states to use in approaching cleanup.23 EPA reportedly also has decided against a self-certification method for state LUST program authorizations, and instead, is favoring a performance-based system of standards that can be accepted or modified by states on a "no less stringent" basis.24

As an initial step, EPA has developed an "Organizational and Strategic Plan" for implementing the underground storage tank provisions in nine major areas of concern:

Notification;

Interim prohibition;

Technical standards;

Financial responsibility;

Corrective action;

Inspection and enforcement;

State program approvals;

Regulatory and economic analysis; and

Research needs.25

Each area listed above is discussed later in this section.

Notification

Section 9002 of RCRA, as amended, requires the owner of a tank currently in use or taken out of operation after January 1, 1974 (unless the owner knows the tank was removed from the ground) to notify a designated state agency of the existence of such tank by May 1986.26 This means that previous owners of property may be forced to search their records (and their recollections) to ferret out information a dozen years old. The new notification provisions require retrospective information similar to that required under RCRA, CERCLA, and the Toxic Substances Control Act (TSCA) notification requirements.27 For each underground tank taken out of operation after January 1, 1974, the owner at the time the tank was taken out of operation must notify the designated agency of the tank's existence; the date the tank was taken out of operation; its age on that date; the size, type, and location of the tank; and the type and quantity of substances left in the tank on the date that it was taken out of operation.28 Once the initial notification period is over, anyone installing a new underground tank will have to provide similar information to the designated agency within 30 days of placing the new tank into operation.29

Pursuant to § 9002, which requires EPA to prescribe by November 1985 the form of notice and information to be provided,30 the Agency reportedly is designing a notification form that will be published as part of the proposed LUST rulemaking. It is expected that states will use the form as part of a standardized data collection system.31 Supposedly, the form will not require tank owners to state a tank's exact chemical contents, but only what RCRA expressly requires: age, location, and use.32

Whether states will use the federal form or voluntarily pass on to EPA the information received through notification remains to be seen. The law requires the states to accept the information, but not to develop a data collection system or share the information with EPA.

The number of individual entities regulated under the new LUST program is much larger than those covered by RCRA or the Federal Water Pollution Control Act (Clean [15 ELR 10139] Water Act).33 Hundreds of thousands of small facilities that many have very little contact with government on other environmental requirements could be regulated by the LUST program. Most likely, these entities are relatively unaware of government environmental regulations. To redress this problem, Congress has directed distributors of products stored in underground tanks to serve as a link between their customers and the government. Section 9002 requires that beginning 30 days after EPA prescribes the form of notice, any person who deposits regulated substances in an underground tank must notify the owner/operator of the tank of the owner's notification requirements.34 In addition, anyone selling a tank for underground storage purposes is required to notify the purchaser of the notification requirements, beginning 30 days after EPA issues new tank performance standards.35

In addition, several general categories of industrial users of underground storage tanks account for a significant percentage of the underground storage tank population. For example, it is estimated that 40 percent of underground storage tanks are located at gasoline stations. Such stations already have communication and oil control systems in place for commercial purposes, and are subject already to regulation on weights and measures, unleaded gasoline, and more. By dividing the underground tank user population into identified categories or classes, which the amendments allow,36 EPA may be able to effectuate its program in a more orderly manner.37

Interim Prohibition

Section 9003(g) requires regulations for tanks installed between May 7, 1985 and the effective date of new tank standards to be developed pursuant to § 9003(e). During that period the statute prohibits installation of underground tanks unless they meet the following requirements:

The tank must prevent releases due to corrosion or structural failure for the operational life of the tank,

The tank must be cathodically protected against corrosion, constructed of a noncorrosive material, clad with a noncorrosive material, or designed in a manner to prevent release or threatened release of any stored substance, and

The material used in the construction or lining of the tank must be compatible with the substance to be stored in the tank.38

The above provisions apply only to tanks in locations with soil resistivity levels lower than 12,000 ohms per centimeter. Because corrosion is unlikely to occur above this level, there is an exception to the requirement for corrosion protection.39

The interim prohibition is self-executing. It was effective on May 7, 1985 without action by EPA. As of mid-May, EPA had not provided any detailed explanation to the regulated community — manufacturers and users of new tanks — of exactly what the statutory prohibition means and what would constitute compliance. The Agency had hoped to be able to complete a draft guidance document, containing information on such things as design features and installation practices found by EPA to be effective, for the use of states and industry groups by the May 7 effective date.40 Since, on or after May 7, no person may "install" an underground storage tank that does not meet the standards, and since there is no definition of installation, the regulated community should assume that the interim prohibition applies to all tanks the installation of which was not completed by that date.

Technical Standards

The new § 9003 requires EPA to promulgate release detection, prevention, and correction regulations applicable to all tank owners and operators "as may be necessary to protect human health and the environment."41 In promulgating these regulations, EPA may distinguish between types, classes, and ages of underground tanks, based on the following factors:

Size, location, and use of tanks;

Soil and climate conditions;

History and maintenance;

Current industry recommended practices;

National consensus codes;

Hydrogeology and water table;

Quantity of regulated substances periodically deposited in or dispensed from the tank;

Technical capability of the owners and operators; and

Compatibility of the regulated substance and the materials of which the tank is fabricated.42

The regulations must require, but are not limited to, the following: (1) maintenance of a leak detection system, an inventory control system together with tank testing, or a comparable release identification system; (2) maintenance of records for the leak detection, inventory control, or comparable system; (3) reporting of releases and corrective actions; (4) corrective actions; and (5) requirements for the closure of tanks to prevent future releases.43

Section 9003 requires the promulgation of performance standards for new tanks — those placed in operation on or after the effective date of such standards — to be effective by May 1987 for tanks containing petroleum products, and by November 1987 for other tanks. The standards must include design, construction, installation, release detection, [15 ELR 10140] and compatibility standards.44 The regulations must be promulgated three months before their effective dates.

Regulations for existing petroleum tanks, as for new petroleum tanks, must be promulgated by February 1987 and take effect by May 1987.45 Regulations for existing tanks containing other regulated substances must be promulgated by August 1988, and take effect by November 1988.46 Although the statute allows for the development, on separate schedules, of standards for petroleum and nonpetroleum tanks, and new and existing tanks, EPA may attempt to promulgate all technical standards simultaneously.47

Technical standards for both existing tanks and new installations will reflect guidelines pertaining to the Agency's Groundwater Protection Strategy, as follows:

a baseline standard for new tanks located over Class II aquifers, including detection requirements;

tighter standards for new tanks located over Class I aquifers, including leak prevention, detection, and containment; and

exemptions for new tanks located over Class III aquifiers.48

EPA is concerned with the accuracy of tank testing methods, and is considering the possibility of mandating certain testing methods for certain types of tanks and products. It wants testing methods that show possible leaks before the discharge enters the groundwater, e.g., sensors in the ground around the tanks.49

Financial Responsibility

Under § 9003(d)(1), the Administrator may choose to adopt regulations requiring tank owners or operators to maintain evidence of financial responsibility for corrective actions and compensation to third parties for bodily injury and property damage caused by sudden and non-sudden accidental releases from underground tanks.50 EPA's LUST Plan calls for the examination of the need for tank owners to demonstrate financial responsibility for both corrective action — either through a corrective action scenario and cost estimate, or a full corrective action plan — and compensation of third parties for bodily injury and property damage. For purposes of third-party compensation, the Agency will evaluate the necessity of financial assurance from an environmental and human health standpoint; the levels of financial assurance necessary; and the best methods of financial assurance.

If EPA decides to impose financial responsibility requirements, it may allow the demonstration to take any of several forms. Financial responsibility may be demonstrated by insurance, guarantee, surety bond, letter of credit, or qualification as a self-insurer,51 or, where there is an approved state program, by state or local corrective action and compensation programs financed by fees on tank owners and operators.52 It will be interesting to see if EPA does in fact include insurance as a form of demonstrated financial responsibility. Insurance companies are reluctant to insure for even sudden environmental damage, and insurance for underground tanks and gradual discharges may be a thing of the past.53

Even if insurance is available, the costs may be prohibitive for the majority of owners affected by this legislation. If an owner could afford the insurance, he probably would be large enough to not need it as a means of financial responsibility; if the owner needed insurance to meet the financial responsibility requirement, he probably could not afford it. This dilemma currently is facing hazardous waste generators with on-site treatment, storage, and disposal (TSD) facilities, and it is one important factor leading many such plants to consider closing their TSD facilities. The much broader community subject to the LUST requirements may not be able to switch from regulated underground storage tanks to above-ground storage. The flesh EPA puts on the bones of the statutory financial responsibility provisions will be of tremendous consequence to many facilities. The invitation in the statute to the states to establish corrective action and compensation programs financed by fees on tank owners — a kind of state-wide self-insurance program — could well become important to the feasibility of the financial responsibility concept. With the possibility that states may approach resolution of this problem in several different ways, financial responsibility programs may be developed that could serve as models for underground tank programs in other states, as well as models for Congress and the states for the other portions of RCRA.

Corrective Action

Section 9003 requires promulgation of corrective action regulations for all underground storage tanks.54 The legislation does not specify what triggers a corrective action; however, EPA plans to use "any detectable release" from a regulated tank as evidence that corrective action is needed. The Agency is developing an approach to corrective action that adopts some concepts from the RCRA land disposal regulations and certain response procedures promulgated under CERCLA.55 EPA will develop [15 ELR 10141] performance-based standards requiring assessment of human health and environmental risks to provide a flexible, site-specific approach to corrective action. Rather than mandate strict federal requirements, the Agency will develop a series of guidance documents to assist states in the development and implementation of new program standards.56

Inspection and Enforcement

The LUST program has its own enforcement scheme, and the enforcement provisions of § 3008 are inapplicable.57 Section 9006 provides EPA authority to enforce LUST provisions through administrative orders and civil judicial actions, including actions for injunctive relief. Civil penalities may be assessed, but no criminal enforcement authority is provided.58 While an approved state program must provide for adequate enforcement,59 EPA retains the right to enforce LUST provisions through orders or civil actions.60 It is not clear whether the states may utilize criminal sanctions to enforce their own programs.61

The Agency is developing strategy documents regarding enforcement of notification, interim prohibition, technical standards, and corrective action requirements. Each strategy will incorporate, as appropriate: (1) compliance promotion; (2) compliance monitoring; and (3) enforcement response actions.62 Recent reports indicate that the Agency is considering innovative enforcement approaches, such as self-monitoring reporting and a hotline for reporting possible discharges of regulated substances, and will not rely on traditional inspections due to the prohibitive costs in manpower and money.63

Indeed, EPA will be forced to seek assistance from state and local authorities if any systematic inspection program is attempted. The number and geographic dispersion of underground tanks create a new challenge to EPA: will stringent regulations, with little real chance of catching all violators, result in massive noncompliance or can the Agency, working with community groups, commodity distributors, and industrial trade associations, create a system that encourages voluntary compliance?

EPA has two enforcement studies under way. The first is a "problem-definition" survey of all 50 states to determine how they have dealt with leaking underground tanks, what the health effects have been, whether leaks are from tanks or ancillary equipment, and whether tank age and type are key variables in leakage. The second is a cost-effectiveness analysis of major approaches decided on by EPA.64

EPA has acknowledged that the potential regulated tank owner community is "far larger than any that EPA has dealt with to date,"65 and at best, the Agency could inspect no more than five percent of the tank population in any one year. To take advantage of institutional experience and resources, the LUST inspections may be integrated with existing RCRA inspection programs. Even so, the inspections will reach but a small portion of the regulated entities. The Agency also plans to use administrative orders, penalties, and, if necessary, judicial actions to establish a visible and credible enforcement presence.66 EPA must soon realize that without voluntary compliance, the LUST program cannot be effective, and must focus its enforcement efforts to encourage such compliance.

State Program Approval

Under § 9004, beginning 30 months after enactment of the amendments a state may submit its own LUST regulatory program to EPA for approval. State programs must provide for enforcement and include provisions for the following requirements:

Maintenance of a leak detection system, an inventory control system, and tank testing system;

Maintenance of records for each of these systems;

Reporting of releases of controlled substances and corrective action;

Corrective action;

Closure of tanks;

Financial responsibility;

New tank performance standards; and

Notification of existence of tanks.67

Thirty-two states have now enacted or initiated legislation to regulate underground storage tanks.68 Seven states are developing LUST programs. Florida has the only final regulations in place but California is very close to implementing its program, which is the most comprehensive to date.69 Federal funding in fiscal year 1986 is planned to encourage further development of existing programs and to provide incentives to states currently without programs. EPA plans to use a multi-year funding strategy in providing for grants to states, and annual guidance within the multi-year umbrella based on aiding states in the development of programs.70

State participation in the LUST program is as important for the program's successful implementation as any other element, for LUST contamination is basically a local concern with localized effects. EPA's success in providing proper incentives for state participation, which involves true state-federal partnership in regulatory decisionmaking, not merely funding, will be a crucial factor, as will become apparent over the next year or two. LUST regulation [15 ELR 10142] simply is not a federal environmental program; it is a neighborhood problem which Congress believed to be ubiquitous. EPA has, in the past, had only moderate success in garnering state support for federal environmental programs. Innovative approaches to the state-federal partnership should be a priority for EPA's LUST program plan.

Regulatory and Economic Analysis

EPA will investigate the costs, economic impacts, and benefits of various strategies in each of the seven regulatory areas discussed above.71 The cost and economic impact analyses will be based on model facilities, with several models to conform to different basic configurations of underground tanks. Estimates of total national costs will be made from estimates of the frequency of occurrence of various scenarios represented by the models. Risk analyses will be based on probability distributions of various releases for various environmental settings and receptor populations.72 These analyses will be used in selecting the regulatory approaches to implement.

Of particular concern in regulation of owners of underground tanks, however, should be the differentiated nature of economic impacts. Facilities that use underground tanks range from large to small, profitable to marginal. Often, use of underground tanks is not discretionary, but mandatory because of fire or safety regulation. EPA's economic analysis must generalize to a degree that may preclude it from capturing the true cost and economic impact of such far-reaching regulations.

Research

Section 9009 requires EPA to conduct two tank studies and to submit reports to Congress. All petroleum tanks must be surveyed and assessed by November 1985 and all other tanks by November 1987.73 The research is to focus on release prevention, leak detection, leak monitoring, corrective action, and risk assessments and economic analyses. The Agency plans to initiate studies to satisfy this requirement.74 Highest priority will be assigned to the evaluation and validation of methods to detect leaks in existing and new tanks and contamination of the surrounding environment. In addition, the Agency will provide background documents and proposed preambles and rules. The report to Congress will include recommendations regarding the expansion of the regulatory program to encompass currently excluded tanks.

EPA should coordinate its research efforts closely with those of tank manufacturers and major users of tanks. Regulation of underground tanks in some aspects approaches product regulation rather than environmental regulation. The manufacturers and users of such products will have far more information available on release prevention, leak detection, and leak monitoring than EPA can possibly hope to develop in the time available. Only if EPA is able to work cooperatively and constructively with such groups will the Agency's research efforts have a chance to help solve the LUST problem.

New Developments

The success of the new RCRA regulatory answer to leaking underground storage tanks will be known only over the course of several years. But already there are signs that the 99th Congress is anxious to look again at the LUST problem. Congressman John Dingell (D-Mich.), Chairman of the House Energy and Commerce Committee, has been quoted as saying that the new Congress is likely to produce environmental legislation even more stringent than currently on the books, undoubtedly encouraged in that direction by the Bhopal disaster, in which storage tanks played a crucial part.75 A numberof environmental bills that address underground tanks already have been introduced in the new Congress. At this time the most farreaching is H.R. 967,76 sponsored by Rep. James Florio (D-N.J.), a member of the Energy and Commerce Subcommittee on Health and the Environment. Florio's bill is designed to ensure that the new LUST program regulations prevent releases from tanks into the air. The law currently specifies that only releases into the ground or the water must be prevented. The legislation also would shorten from 36 to 18 months the deadline for promulgation of regulations governing underground tanks used to store hazardous substances covered by Subchapter IX.

Rep. Tom Downey (D-N.Y.) has introduced a bill, H.R. 1881,77 allowing a portion of Superfund appropriations to be reserved for EPA to use in cleaning up petroleum-based products that have leaked from underground tanks. The bill repeals the CERCLA provision that prevents EPA from cleaning up sites that have been contaminated with crude oil or petroleum-based products, except when the Agency has expressly designated those substances as hazardous wastes.78

And, at this time, Rep. Henry Waxman (D-Cal.), Chairman of the Subcommittee on Health and the Environment, is conducting an investigation of air releases from pressurized holding tanks containing regulated substances. This investigation began shortly after the Bhopal accident and could well result in additional stringent regulation of storage tanks, whether underground or above ground.

Conclusion

The Environmental Protection Agency has a mandate to have a comprehensive regulatory program on underground storage tanks in place by November 1987. Once more, EPA must enter an area that was largely unregulated by the federal government and solve technical and regulatory problems, with the potential of a tremendous economic impact on the private sector. This is a mammoth undertaking, requiring substantial money and manpower to develop the regulatory program and even more to effectuate it. [15 ELR 10143] The underground storage tank control program is but a portion of the 1984 amendments to the Resource Conservation and Recovery Act. There should be some concern, however, that this LUST-tail may wag the RCRA-dog.

As we have pointed out throughout this article, the LUST program is not really an extension of the RCRA effort, but an entirely separate regulatory approach to problems emanating from one method of storing liquids, primarily petroleum products and volatile organics. It has all the elements of a major regulatory effort by EPA — notification, technical standards, state participation, research, and the other elements discussed above. In addition, the LUST program takes EPA more deeply into regulating the specifications for a manufactured product than ever before. Arguably, EPA's efforts have been most successful when the Agency deals with environmental effects, such as air or water pollution, and allows industry to fashion the remedy, rather than when the Agency attempts to give detailed technical marching orders to industry.

Another important factor is the extraordinary level of true public involvement necessary to theAgency's establishment of an effective LUST regulatory program.Notification of existing tank owners is totally dependent on the cooperation of small owners/operators who may have had no prior experience with the Agency's other regulatory programs, and the cooperation of commodity distributors and industry trade associations. EPA will have to work closely with the regulated community to ensure the development of a viable and effective program. EPA often gives lip service to such close coordination, but the history of litigation over major regulations in the air, water, and hazardous waste area — and the success of lawsuits by environmental groups and industry alike in affecting the course of EPA's regulatory developments — belie this claim of cooperation. With the number and diversity of underground storage tanks throughout this country, prolonged litigation or the inability of EPA to develop a consensus on the solution to the LUST problem not only could impede or destroy the LUST program, but also could cause a tremendous hardship on regulated entities caught in the middle.

Another major issue is whether states will participate adequately in the LUST program. Most likely, some states will have programs that will meet or exceed federal standards. Indeed, the thrust for the federal program, and the recognition of the LUST problem, emanates from the states. The real issue, therefore, is not whether some states will participate, but the degree of participation and cooperation with EPA by leadership states and the extent to which other states will follow suit.

Finally, there is the larger question of whether the complex and complicated program EPA is designing pursuant to congressional mandate is what is really needed. If the problem is one of the manufacture and installation of a product, should not the manufacturers, distributors, and commercial users of that product be given an opportunity to develop the standards and inspection procedures themselves (with governmental approval) as is done for such commonly used products as elevators, airplanes, and other machinery? If the problem is in large part one of leakage which occurs at tank installation and near the end of a tank's useable life, perhaps a less comprehensive regulatory scheme would be appropriate. If EPA had the option of placing regulations on the maximum useable life of an underground tank, and requiring rigorous inspection after the installation of a new tank, it would go a long way towards ensuring the prevention of leaks, and thus perhaps avoid the necessity of implementing a complex regulatory program. Instead, the present direction of EPA's program emphasizes compelxity and sets out to address difficult technical issues, questionably beyond the Agency's competence. Add to that the increasing scrutiny by pro-active members of Congress, and the LUST program begins to look so complicated and so dependent on cooperation as to be potentially unworkable.

1. CONFERENCE REPORT ON HAZARDOUS AND SOLID WASTE AMENDMENTS OF 1984, H.R. REP. NO. 1133, 98th Cong., 2d Sess. 128 (1984) [hereinafter cited as CONFERENCE REPORT].

2. Shimberg, The Hazardous and Solid Waste Amendments of 1984, ENVTL. FORUM, Mar. 1985, at 16.

3. Originally called "LUST," the leaking underground storage tank program acquired a new name, "RUST" (regulation of underground storage tanks), when Congress added underground storage tank requirements to the Resource Conservation and Recovery Act (RCRA), §§ 9001-9010, 42 U.S.C. §§ 6991-6991(i), ELR STAT. 42045. However, some people reportedly took umbrage to the implication that the problem is solely one of oxidation of metal tanks, and asked EPA to use another acronym. As a result, "LUST" is with us again. INSIDE EPA, Nov. 23, 1984, at 13.

4. Regulation of Underground Storage Tanks, RCRA Subtitle I, Development Plan (Draft), at II-1, March 18, 1985 [hereinafter cited as EPA Plan]. This is the second, in what undoubtedly will be a series, of EPA draft development plans for the LUST program. For the initial development plan, see INSIDE EPA, Dec. 21, 1984, Jan. 4, 1985. The reader should keep in mind that the plans are internal EPA documents that will be used as guides in developing its regulatory program and that the Agency may not be able, or may not choose, to carry out all that is outlined in the current version of the plan.

5. Shimberg, supra note 2, at 16.

6. CONFERENCE REPORT, supra note 1, at 128.

7. EPA Plan, supra note 4, at II-1, II-3.

8. Pub. L. No. 98-616, 96 Stat. 3221 [hereinafter cited as 1984 Amendments]. For a general description and overall analysis of the amendments, see Rosbe & Gulley, The Hazardous and Solid Waste Amendments of 1984: A Dramatic Overhaul of the Way America Manages Hazardous Wastes, 14 ELR 10458 (Dec. 1984).

9. 42 U.S.C. §§ 6901-6991(i), ELR STAT. 41901.

10. "Regulated substances," for purposes of the LUST program, means petroleum products and all "hazardous substances" as defined under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9657, ELR STAT. 41941, with the exception of any substance regulated as a hazardous waste under Subtitle C of RCRA. RCRA § 9001(2), 42 U.S.C. § 6991(2), ELR STAT. 42045.

11. RCRA § 9001(1), 42 U.S.C. § 6991(1), ELR STAT. 42045.

12. See infra, note 18.

13. Plehn, An Introduction to LUST, ENVTL. FORUM, July 1984, at 5. Incidents of contamination from leaking underground tanks have been reported in all 50 states. Shimberg, supra note 2, at 16.

Provincetown, Massachusetts has sued a major oil company and others for $25 million due to disruption of the town's water supply caused by gasoline leaks into the system. Plehn, supra, at 5. In California's Silicon Valley, several incidents of underground contamination by solvents and chemicals have necessitated cleanups costing over $10 million. Id. In a New York community a leak of 30,000 gallons of gasoline into the groundwater system threatened the health and safety of 27 families. The involved company's costs for cleanup and damages were estimated at $5-10 million. EPA Plan, supra note 4, at II-2. And in Colorado, a similar situation prompted court action requiring the responsible company to purchase 41 houses at an estimated cost of $10 million. Id.

Nineteen sites with underground tank leakage have been proposed by EPA to be added to the National Priorities List (NPL) under CERCLA, § 105, 42 U.S.C. § 6905, ELR STAT. 41947. Of the 786 sites on the expanded NPL, 57 have been identified as linked to contamination from leaking underground tanks. This is true even though underground tanks used for the storage of petroleum products are exempted from CERCLA's authority and consequently cannot be included on the NPL. EPA Plan, supra, at II-1, II-2.

14. Plehn, supra note 13, at 5-6.

15. Id. at 6.

16. Interview with Gary L. Liberson, President, Lloyd Associates, Inc., Mar. 15, 1985.

17. Id.

18. Exempted are farm and residential storage tanks of 1,100 gallons or less capacity used for storing motor fuel and heating oil for noncommercial purposes, septic tanks, and all pipeline facilities regulated under the Natural Gas Pipeline Safety Act of 1968 (49 U.S.C. app. 1671), the Hazardous Liquid Pipeline Safety Act of 1979 (49 U.S.C. app. 2001), or comparable state laws. RCRA § 9001(1), 42 U.S.C. § 6991(1), ELR STAT. 42045. Congress also excluded surface impoundments, pits, ponds, lagoons; stormwater or waste water collection systems; flow-through process tanks; liquid traps or associated gathering lines directly ralated to oil or gas production and gathering operations; and storage tanks situated in underground areas (e.g., basements, tunnels) if the storage tanks are placed on or above the surface of the floor. Id.

19. RCRA § 9009(a)-(c), 42 U.S.C. § 6991h(a)-(c), ELR STAT. 42048. These studies must include an assessment of the ages, types, and locations of such tanks; soil conditions, water tables, and the hydrogeology of tank locations; the relationship between the foregoing factors and the likelihood of releases from underground tanks; the effectiveness and costs of inventory systems, tank testing, and leak detection systems; and other factors deemed appropriate.

20. RCRA § 9009(d), 42 U.S.C. § 6991h(d), ELR STAT. 42048.

21. See INSIDE EPA, Dec. 21, 1984, at 9. This perception is due, primarily, to the vast size of the regulated community: an estimated two million tank owners/operators, as compared to several thousand treatment, storage, and disposal facilities and approximately 175,000 small quantity generators regulated under RCRA. In addition, the program has all the elements of a total environmental program: requirements for surveys, standard setting, inspections, reporting requirements, financial responsibility, and state approvals.

22. EPA Plan, supra note 4, at I-2, I-3.

23. INSIDE EPA, Apr. 5, 1985, at 4.

24. INSIDE EPA, Mar. 15, 1985, at 14.

25. EPA Plan, supra note 4, at I-3.

26. RCRA § 9002(a), 42 U.S.C. § 6991a(a), ELR STAT. 42045.

Governors are required to designate state or local agencies to receive notifications by May 8, 1985. Amendments, sec. 601(a), RCRA § 9002(b)(1). A list of the agencies designated to receive notifications will be published in the Federal Register. EPA Plan, supra note 4, at III-1, III-2. Should a state refuse to designate an agency, EPA's legal options are unclear; the Agency's Office of General Counsel currently is looking into the matter. Id. at III-5.

27. See, e.g., RCRA § 3002(6), 42 U.S.C. § 6922(6), ELR STAT. 42813 (generator reporting requirements), CERCLA § 103(c), 42 U.S.C. § 9603(c), CLR STAT. 41944 (hazardous substance disposal site notification), TSCA § 4(a), 15 U.S.C. § 2603, ELR STAT. 41336 (new chemical testing requirements).

28. RCRA § 9002(a)(2)(A), (B), 42 U.S.C. § 6991a(a)(2)(A), (B), ELR STAT. 42045.

29. RCRA § 9002(a)(3), 42 U.S.C. § 6991a(a)(3), ELR STAT. 42045.

30. RCRA § 9002(b)(2), 42 U.S.C. § 6991a(b)(2), ELR STAT. 42045.

31. EPA Plan, supra note 4, at III-2.

32. INSIDE EPA, Apr. 5, 1985, at 4.

33. The Clean Water Act is codified at 33 U.S.C. §§ 1251-1376, ELR STAT. 42101. Approximately 50,000-75,000 entities are required to have permits under the Act.

For a discussion of the number of regulated entities under RCRA, see supra, note 21.

34. RCRA § 9002(a)(5), 42 U.S.C. § 6991a(a)(5), ELR STAT. 42045.

35. RCRA § 9002(a)(6), 42 U.S.C. § 6991a(a)(6), ELR STAT. 42045.

The statutory tie of the obligation to inform purchasers of new tanks of their notification requirements with the issuance of new tank performance standards is curious; such standards are not due to be issued until well after the tank owner's notification requirement goes into effect.

36. RCRA § 9003(b), 42 U.S.C. § 6991b(b), ELR STAT. 42045.

37. The possible regulatory benefit of grouping tanks into manageable, differentiated units appears to be contrary to the Agency's present plan of integrating technical standards for different types of tanks and promulgating standards covering all types of tanks at the same time. See infra, note 47.

38. RCRA § 9003(g)(1), 42 U.S.C. § 6991b(g)(1), ELR STAT. 42046.

39. RCRA § 9003(g)(2), 42 U.S.C. § 6991b(g)(2), ELR STAT. 42046.

40. EPA Plan, supra note 4, at IV-3.

41. RCRA § 9003(a), 42 U.S.C. § 6991b(a), ELR STAT. 42045.

42. RCRA § 9003(b), 42 U.S.C. § 6991b(b), ELR STAT. 42045.

43. RCRA § 9003(c), 42 U.S.C. § 6991b(c), ELR STAT. 42045.

44. RCRA § 9003(e), (f)(1), (2), 42 U.S.C. § 6991b(e), (f)(1), (2), ELR STAT. 42046.

45. RCRA § 9003(a), (f)(1), 42 U.S.C. § 6991b(a), (f)(1), ELR STAT. 42045, 42046.

46. RCRA § 9003(a), (f)(3), 42 U.S.C. § 6991b(a), (f)(3), ELR STAT. 42045, 42046.

47. EPA Plan, supra note 4, at V-6, V-7.

Simultaneous promulgation is seen as a measure to simplify implementation of the program and to avoid large expenditures of time, manpower, and money that would be necessary to promulgate in three discrete phases. INSIDE EPA, Apr. 5, 1985, at 4. But see supra, note 37.

48. EPA Plan, supra note 4, at V-8, V-9.

49. INSIDE EPA, Dec. 21, 1984, at 10.

50. RCRA § 9003(d)(1), 42 U.S.C. § 6991b(d)(1), ELR STAT. 42046.

51. RCRA § 9003(d)(2), 42 U.S.C. § 6991b(d)(2), ELR STAT. 42046.

52. RCRA § 9004(c)(1), 42 U.S.C. § 6991c(c)(1), ELR STAT. 42047.

53. Liberson, supra note 16.

Suggested alternatives to environmental impairment liability insurance are for large companies to self-insure and for groups of smaller companies to establish insurance cooperatives. EPA is forming a work group with insurance representatives to address reasons insurance companies are pulling out of the field of environmental liability coverage. INSIDE EPA, Feb. 22, 1985, at 7.

54. RCRA § 9003(c)(4), 42 U.S.C. § 6991b(c)(4), ELR STAT. 42046.

55. Disposal regulations under CERCLA Subpart F (National Contingency Plan) require the owner/operator to institute a corrective action whenever a groundwater protection standard, based on the facility's permit, is exceeded. Once the standard is exceeded, the owner/operator must conduct a corrective action program to remove or treat in place the hazardous constituents, supported by a monitoring program designed to demonstrate the effectiveness of any actions taken. Corrective measures may be terminated once the concentrations of hazardous constituents are reduced below the permit limits.

EPA has noted that corrective action regulations could easily bankrupt small tank owners. The Agency is considering a plan to set up a separate abandoned tank spill fund. INSIDE EPA, Apr. 5, 1985, at 4.

56. EPA Plan, supra note 4, at I-7.

57. See CONFERENCE REPORT, supra note 1, at 127.

58. RCRA § 9006(a), (d), 42 U.S.C. § 6991e(a), (d), ELR STAT. 42047, 42048.

59. RCRA § 9004(a)(2), 42 U.S.C. § 6991c(a)(2), ELR STAT. 42046.

60. RCRA § 9006(a)(2), 42 U.S.C. § 6991e(a)(2), ELR STAT. 42047.

61. Section 9008 allows states to have more stringent enforcement programs. RCRA § 9008, 42 U.S.C. § 6991g, ELR STAT. 42048.

62. EPA Plan, supra note 4, at VIII-3.

63. INSIDE EPA, Mar. 15, 1985, at 14.

64. Id.

65. EPA Plan, supra note 4, at VIII-5.

66. EPA Plan, supra note 4, at VIII-6, VIII-7.

67. RCRA § 9004(a), 42 U.S.C. § 6991c(a), ELR STAT. 42046.

68. Shimberg, supra note 2, at 16.

69. INSIDE EPA, Dec. 21, 1984, at 9.

70. EPA Plan, surpa note 4, at IX-5.

71. Notification, interim prohibition, technical standards, financial responsibility, corrective action, inspection and enforcement, and state program approvals.

72. EPA Plan, supra note 4, at X-1.

73. RCRA § 9009(a)-(e), 42 U.S.C. § 6991h(a)-(e), ELR STAT. 42048.

The farm and heating oil tanks currently are excluded from regulation. RCRA § 9001(1)(A), (B), 42 U.S.C. § 6991(1)(A), (B), ELR STAT. 42045.

74. EPA Plan, supra note 4, at XI-1, XI-2.

75. INSIDE EPA, Feb. 15, 1985, at 2.

76. H.R. 967, 99th Cong., 1st Sess. (1985).

77. H.R. 1881, 99th Cong., 1st Sess. (1985).

78. DAILY REP. FOR EXEC. (BNA), Apr. 5, 1985, at A-5.

15 ELR 10135 | Environmental Law Reporter | copyright © 1985 | All rights reserved