**EPA Innovation Grant Proposal for 2005-2006**

**Pre-proposal Project Summary Information Page**

**[Project Title and Location]{.underline}: Environmental Results
Program (ERP) Initiative for the VA Underground Storage Tank (UST)
Inspection Program -- Virginia Department of Environmental Quality -
Richmond, Virginia**

**[Name of Applicant Agency]{.underline}: Virginia Department of
Environmental Quality**

**[Name of Project Contact]{.underline}:** Contact Person: Russell P.
Ellison III, P.G., CGWP, MBA

Title:                UST Program Coordinator

Department:      Office of Spill Response & Remediation 

Agency:            Virginia Department of Environmental Quality

Address:           629 E. Main Street

                        P.O. Box 10009

                        Richmond, Virginia  23240

Telephone: (804) 698-4269

Fax: (804) 698-4266

E-mail: [rpellison@deq.virginia.gov]{.underline}

This project would be executed in cooperation with the federal and
delegated state UST/LUST Programs. No regulatory flexibility from the
federal government is anticipated to be needed to implement the project.
The Director of the Virginia Department of Environmental Quality
endorses this project.

**Pre-Proposal Project Narrative**

This project would bring next-generation strategic innovation and
extensive application to what is arguably the largest environmental
regulatory program in Virginia and the nation---the UST/LUST Program.
Virginia has the seventh largest active UST population in the nation
with some 27,000 USTs at over 9,000 UST facilities and with limited
state resources achieves a current inspection rate of only every 9
years. More than 10,181 UST releases have been reported to date in
Virginia alone. Although in recent years the release rate has
significantly decreased, releases continue to occur primarily related to
facility non-compliance and operational issues. A significant volume
reduction in contaminants to the environment is expected from increasing
facility operational compliance rates. A successful interactive
CD-ROM/online self-certification ERP program for UST Inspections in such
a large UST population state would be the next logical step in effecting
increased UST stewardship, program efficiency, pollution prevention, and
environmental protection, that could then easily be rolled out to other
states nationwide.

This project will work directly to achieve several of EPA's 2003-2008
stated Strategic Goals: Clean and Safe Water (Goal #2) - Reducing
Exposure to Contaminants in Drinking Water (including protecting source
waters) by further protecting public and private drinking water supplies
and the ground and surface water resources by correcting UST
containment, compliance, and operational problems more frequently thus
limiting impacts especially from the known carcinogen benzene and the
contaminant MTBE; Land Preservation and Restoration (Goal #3) by better
preventing the occurrence and limiting the extent of releases and their
associated long term impacts to lands; Healthy Communities and
Ecosystems (Goal #4) by further reducing petroleum releases to soil,
water, and air and thus further protecting human health and the
environment; and, Compliance and Environmental Stewardship (Goal #5) by
more frequently fostering UST owner stewardship and in so doing achieve
better overall UST knowledge and compliance. The Clean Air component of
Strategic Goal #1 - Healthier Outdoor Air via reduction in VOCs and the
toxic carcinogen (benzene) will also be met as air emissions from UST
releases will be diminished. And overall, the Cross-Goal Strategy of
Innovation will be achieved with this innovative stewardship project.

In the past 18 years VA-DEQ has received approximately \$187,000 per
year in EPA UST base grant funds to maintain an UST program presence
throughout this federally delegated program state. In addition, the
Virginia Petroleum Storage Tank Fund currently contributes over \$1.8
million in state funds annually specifically for this UST inspection
effort. Combined, these federal and state funds support a staff of some
22 inspectors statewide in the seven DEQ regional offices who annually
perform approximately 1,000 full formal UST facility inspections and 400
informal and site visit facility inspections and all follow-up
activities. [At current staffing and inspection rates, each Virginia UST
facility would be formally inspected only approximately every 9
years---a too infrequent rate]{.underline}. This very low frequency will
hopefully improve somewhat with inspection staff efficiencies achieved
over time and the resolution of the many older UST sites, but nationwide
a low inspection frequency as noted in the federal May 2001 GAO Report
(GAO-01-464 entitled "Improved Inspections and Enforcement Would Better
Ensure the Safety of Underground Storage Tanks") remains a long-term
obstacle in the effort to diminish and help prevent UST releases.

The UST Program began on November 8, 1984 when Subtitle I of RCRA was
signed into law to prevent the release of regulated substances affecting
human health and the environment. Since the passing of the 1998 UST
Upgrading deadline some 14 years later, EPA and the states have
continued to struggle with increasing the inspection frequency rates and
ensuring consistent inspections in order that the proper balance of
increased regulatory compliance and environmental protection is achieved
and maintained. On September 30, 2003 EPA\'s Significant Operational
Compliance (SOC) guidelines for USTs were adopted nationwide as a good
benchmark standard of consistency for all future state and federal UST
inspections and reporting compliance rates to EPA.

Current SOC compliance rates for the nation average in the 65%-70% range
with some smaller and/or adequately funded states claiming 90%
compliance rates and other often larger states with limited funding
and/or staffing reporting in the 40%-50% compliance range. Reported
compliance rates are dependent on a number of variables such as:
frequency of inspections (influenced by tank population of the state and
available resources); flexibility and experience of the state
inspector(s); training levels of the UST owners; status of the state
inspection process (first time inspections, etc.); percentage of tanks
upgraded with cathodic protection; the used oil tank population
(chronically non-compliant); and, focus of state program efforts on
known problem owners/sites.

Based on the aforementioned May 2001 GAO report (GAO-01-464) and
proposed federal energy legislation, [a national initiative is underway
to urge states to increase their inspection frequencies to every two to
three years\--a significant and costly undertaking. The GAO research
indicates that tank owners are more likely to be in consistent
compliance if they are kept aware of the UST requirements on a more
frequent basis (2-3 years).]{.underline} Unfortunately this effort comes
at a time when state budgets have been cut and there is a national
business trend for major oil companies to divest their stations to
independent dealers and thus the past economies-of-scale for compliance
under major-brand oil entities is somewhat being lost. Also, the GAO
report identified that more frequent and continuing operator training is
needed. Although the main effort of this proposed project is to increase
compliance rates, an added benefit is that more owner/operator training
is achieved.

The main goal of this proposed project is to develop an electronic
interactive ERP Self-Certification Program for UST Inspections. This
effort would initially involve an EPA and State funded pilot project to
enable selected competent major UST owners/operators or their qualified
contractors to use a CD-ROM/online electronic version of the EPA \"UST
ERP Workbook\" (EPA 510-R-04-003) and a more simplified \"EPA UST ERP
Checklist\" to self-certify compliance. Many of the noted difficulties
of gaining tank owner understanding of the comprehensive 162-page UST
Workbook and Checklist may be overcome using such a CD-ROM/ online
question and answer approach. Such an electronic inspection/compliance
tool would need to be tailored for both CD-ROM and on-line interactive
use similar to desktop and on-line web-based \"tax preparation
software\" services. A DEQ/EPA-approved software contractor would refine
the UST ERP Workbook and Checklist and develop the CD-ROM and on-line
interactive versions. The project development and rollout period is
expected to take 18 months. After completing an interactive
CD-ROM/online session the UST owner would generate a DEQ UST ERP
Inspection Checklist form to certify UST compliance under Virginia Law
and Regulation (which is very similar to the federal). Initially, only
owners of large numbers of USTs (major oils or owners with \>\~100
facilities) with sufficient competent oversight resources and with
proven records of compliance will be selected for the pilot program in
order to focus on owners with the greatest likelihood of successful
program participation. Allowing a significant percentage of UST
facilities to ERP self-certify would free up limited DEQ UST inspection
staff to concentrate on mom-and-pop facilities and those entities most
in need of compliance assistance. Third party certification is expected
to become an inherent part of this ERP effort since some major tank
owners will prefer to hire third party contractors to conduct their
certifications much like tax preparation contractors provide tax filing
services. DEQ Regional Office UST inspection staff would audit up to 10%
of all self-certifications to ensure accuracy and take follow-up
enforcement action where necessary. Ongoing outreach by DEQ UST staff to
associations and stakeholder groups would be integral and critical to
the program\'s ultimate success therefore VA-DEQ UST Program staff would
initiate and maintain contact with the key stakeholders to gain
consensus on the best ways to roll out the program to all potential
self-certifying entities. These include the Virginia Petroleum Council
(major oil), Virginia Petroleum Marketers and Convenience Store
Association (jobbers), and the Virginia Gasoline Marketers Council
(independents) and include large public entities such as VDOT.

**In accordance with EPA Order 5700.7 the following plan is offered for
measuring and tracking progress in achieving expected
outputs/outcomes:**

**August 2005** -- EPA Grant Awarded -- Initially, a pilot (VA) project
to enable up to 100 selected competent major UST owners/operators or
their qualified contractors to use a CD-ROM/online electronic version of
the EPA \"UST ERP Workbook\" and a more simplified \"EPA UST ERP
Checklist\" to self-certify compliance. This electronic
inspection/compliance tool would need to be tailored for both CD-ROM and
on-line interactive use similar to desktop and on-line web-based \"tax
preparation software\" services in common use by the public today.

**September 2005** - A Request for Proposals (RFP) will be issued in
search for a suitable CD-ROM/online version development contractor.
EPA-OUST will be requested as a minimum to participate in a technical
oversight role and ideally to collaborate with the contractor/staff in
an effort to produce the most nationally adaptable/suitable final
product. In-kind review support from VA-DEQ in the form of DEQ UST
program software staff and UST technical/inspection personnel will be
provided to assist and guide the contractor. The proposed RFP scope of
work will be focused enough to limit change orders and other variables
thereby containing costs. They are familiar with the UST Program terms
and requirements and could leverage existing knowledge and skills to
quickly ramp up this CD-ROM/online ERP effort. EPA-OUST may consider
partnering with EPA Innovations on this effort to provide a
self-certification template for all the states to use.

**December 2005** -- Contractor retained for UST ERP Inspection software
CD-ROM/online version development. Contract will require use of EPA UST
ERP Workbook as a template for the logic sequence for the question and
answer process. A regulated community workgroup will be asked for input
during the process. This will greatly limit the over 100 pages of
Workbook documents still necessary under current availability. An EPA
UST ERP Checklist to self-certify compliance will be generated for
electronic and paper copy submission to DEQ and for owner recordation.

**June 2006** -- A Beta version of the EPA UST ERP Inspection software
will be provided in CD-ROM/online format for VA trials with DEQ
inspection staff, EPA officials, and then to several of the selected
major UST owners/operators.

**September 2006** -- Final version is provided as CD-ROM/online. Field
auditing is undertaken by in-kind support DEQ staff inspectors of up to
10% of the selected UST entities who CD-ROM/online self-certified.
Initially, environmental outcomes will be measured based on the noted
reduction in UST release reports, compliance rate analysis, and
projected extent of any reported releases from active UST facilities
statewide during the project period as compared to current release
reporting extent conditions (baseline).

**December 2006** -- Review of initial audit results initiated. Fine
tuning of final CD-ROM/online version begun in anticipation of broader
application to additional owner categories statewide. EPA/other states
will have free access to the VA CD-ROM/online version for their uses and
modifications per their state regulatory needs.

**June 2007** -- Final reporting to EPA of results and outcomes. Outcome
comparisons will focus on active UST facilities self-certifying every
third year versus the normal 9 year (baseline) frequency of inspection
in VA. Air (toxics), water, and land impact reductions of the more
frequently inspected (CD-ROM/online self-certified) UST facilities will
be evaluated and reported.

Federal Form SF-424A will be submitted with any final application
package.

Principal Project Expected Results:

-   This effort will allow Virginia to improve and maintain water
    quality and ensure the long-term integrity of our water
    infrastructure by enabling us to effectively inspect and remind more
    facilities of the UST requirements per unit time.

-   This project will enable our limited state UST inspection staff to
    be available for the many mid-sized and small-sized UST facilities
    likely to be remiss in compliance due to often-older facility age,
    limited capital, and in chronic need of technical assistance.

-   This project is also needed to gear up for actually addressing the
    hard numbers as to how much failure-to-perform UST compliance
    affects the water quality and environment of Virginia. Benzene, a
    known carcinogen and MTBE, a pollutant to drinking water supplies
    make up a large percentage of today\'s gasoline composition and must
    be better controlled to staunch their pervasive release and impacts
    to human health and the environment.

-   It is reasonable to project that with the increased inspection rates
    (3 years versus 9 years), UST site stewardship, and earlier
    correction of spills and overfills, this program will enable up to a
    one third reduction in the pounds of VOC emissions (and the
    carcinogen benzene) to the environment and concomitant health risks
    that would have been present if the project was not undertaken.

> Project and team synergies with other Region III state partner
> agency's inspection efforts:

-   We have been in close contact with the State of Maryland and they
    strongly support this ERP effort since they are pursuing a hybrid
    third party inspection program that they say will be greatly
    complemented by the success of any CD-ROM/online assistance versions
    for their owners who wish to self-certify compliance.

-   We have been in ongoing contact with the State of Delaware and they
    too are interested in pursuing a similar project\--if not funded as
    an independent state effort then as a joint effort with VA.

-   In addition, the Commonwealth of Pennsylvania with a fully
    functioning third-party inspection program indicates they too would
    greatly benefit from a successful CD-ROM/online inspection module
    primarily as a much needed owner/operator
    compliance-training/refresher tool.

> Applicability to other states and EPA:

-   This effort by Virginia or by a multi-state approach would be
    readily transferable to the other state UST programs nationwide with
    only minor alteration for state-specific needs.

-   It is hoped the national EPA UST Program (OUST) may wish to make
    this project a national endeavor and agree to team up with the
    multi-states showing interest in ERP CD/-ROM/online
    self-certification to more effectively address the chronic
    inspection frequency problem nationwide.

-   This project builds upon existing technologies and UST efforts and a
    project timeline over several years is therefore acceptable.

**One contracting option would be to explore the possibility of EPA
agreeing to partner with the state(s) to use any ERP cooperative
agreement funds toward retaining existing EPA-OUST contractors who
developed the online EPA UST Inspector Training module. They are
familiar with the UST Program terms and requirements and could leverage
existing knowledge and skills to quickly ramp up this CD-ROM/online ERP
effort. EPA-OUST may consider partnering with EPA Innovations on this
effort to provide a self-certification template for all states to use**.

**Budget Summary**

**State: Virginia**

**Agency: Virginia Department of Environmental Quality (DEQ)**

**Project Title: Environmental Results Program (ERP) Initiative for the
VA Underground Storage Tank (UST) Inspection Program**

**[\[Budget details redacted\]]{.mark}**

**TOTAL: \$354,000**