```
                                                                 
Environmental Protection: MTBE Contamination From Underground	 
Storage Tanks (21-MAY-02, GAO-02-753T). 			 
                                                                 
To help limit air pollution, about a third of the states use	 
gasoline that contains methyl tertiary butyl ether (MTBE), which 
burns cleaner. However, MTBE has migrated into wells and	 
groundwater from leaking underground tanks used to store	 
gasoline. The Environmental Protection Agency (EPA) has the	 
responsibility through the Underground Storage Tank Program and  
works through the states to ensure that tanks do not leak, and if
they do, that the contamination is cleaned up. To help states	 
cover the program costs, Congress annually provides grants from a
trust fund it created in 1986. Most of the 50 states have	 
reported finding MTBE when they discover gasoline contamination  
in their tank sites and, increasingly, in their groundwater,	 
surface water, and drinking water. States have made progress in  
addressing the releases they have discovered, including MTBE	 
contamination, but face a continuing and substantial cleanup	 
workload. States typically depend on tank owners or operators to 
pay some of the cleanup costs and cover the remainder with their 
own funding programs and depend on relatively small federal trust
fund grants to pay staff to oversee cleanups and administer their
programs.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-753T					        
    ACCNO:   A03394						        
  TITLE:     Environmental Protection: MTBE Contamination From	      
Underground Storage Tanks					 
     DATE:   05/21/2002 
  SUBJECT:   Environmental monitoring				 
	     Federal/state relations				 
	     Hazardous substances				 
	     Health hazards					 
	     Pollution control					 
	     Safety standards					 
	     State-administered programs			 
	     Tanks (containers) 				 
	     Water pollution					 
	     Water pollution control				 
	     EPA Underground Storage Tank Program		 
	     Leaking Underground Storage Tank Fund		 

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GAO-02-753T
     
Testimony Before the Subcommittee on Environment and Hazardous Materials,
Committee on Energy and Commerce, House of Representatives

United States General Accounting Office

GAO For Release on Delivery Expected at 3: 30 p. m., EDT Tuesday, May 21,
2002 ENVIRONMENTAL

PROTECTION MTBE Contamination From Underground Storage Tanks

Statement of John Stephenson Director, Natural Resources and Environment

GAO- 02- 753T

Page 1 GAO- 02- 753T MTBE from Underground Tanks

Mr. Chairman and Members of the Subcommittee: I am pleased to be here today
to discuss the increasing concern that our nation?s waters are becoming
contaminated with methyl tertiary butyl ether (MTBE). About a third of the
states, in certain areas, use gasoline that contains MTBE to help them limit
air pollution because it burns cleaner. However, the substance could also
pose risks to human health, especially as a contaminant in drinking water
wells. One of the primary ways in which the contaminant has migrated into
wells and groundwater is from leaking underground tanks used to store
gasoline. The Environmental Protection Agency (EPA) has the responsibility
through the Underground Storage Tank Program and working primarily through
the states to ensure the tanks do not leak, and if they do, that the
contamination is cleaned up. However, several studies, including our own
report on EPA?s implementation of the tank program, 1 showed that many tanks
have leaked- and continue to leak- hazardous substances, such as MTBE and
benzene. These leaks, in turn, contaminate soil and groundwater, posing
health risks to those who live nearby or drink the water. Such health risks
can range from nausea to kidney or liver damage or even cancer. As a result,
some communities have closed their drinking water wells. A recent news
report illustrates the problem. A school in Roselawn, Indiana, discovered
that the children had been using and drinking water with nearly 10 times the
EPA- recommended safe level of MTBE. I understand that an investigation is
trying to determine whether the MTBE came from a nearby tank and whether it
is a factor contributing to the children?s nosebleeds and other reported
health problems.

When there is a gasoline overflow, spill, or tank leak- referred to as
releases- the tank owners and operators are to report the incident to EPA if
the release is on tribal lands, or otherwise to the state agency
implementing the tank program, and to initiate cleanup. Most releases are
not discovered, however, until the tanks are taken out of service, when they
must be permanently closed to eliminate future leaks. To help states cover
their program costs, the Congress annually provides the states with grants
from a trust fund it created in 1986. In fiscal year 2001, states each
received from $252, 000 to $4. 5 million, depending primarily on their
cleanup workload, for a total of $58. 7 million. States can use these
resources for, among other things, cleaning up releases when the owner or

1 Environmental Protection: Improved Inspections and Enforcement Would
Better Ensure the Safety of Underground Storage Tanks (GAO- 01- 464, May 4,
2001).

Page 2 GAO- 02- 753T MTBE from Underground Tanks

operator is unable or unwilling to perform the cleanup, or cannot be
identified. The fund is replenished primarily through a $. 001/ gallon
federal tax on gasoline and other fuels and had a balance of $1.7 billion at
the end of fiscal year 2001.

Because of rising concerns about continuing releases and the resulting
contamination, especially from MTBE, we determined the (1) extent to which
these releases may contain MTBE, and whether the contaminant poses health
risks or affects cleanups, (2) progress states have made in cleaning up
releases, and (3) the party responsible for the cleanup costs. In summary,
we found the following:

 A majority of the 50 states have reported finding MTBE when they discover
gasoline contamination at their tank sites and, increasingly, in their
groundwater, surface water, and drinking water. This widespread
contamination occurs, even though currently only certain communities in only
about one- third of the states use gasoline with MTBE as a fuel additive.
Contamination continues because, among other things, MTBE has been used in
the past as an octane enhancer and is currently transported through the same
fuel pipes and trucks that deliver gasoline across the country. 2 MTBE?s
health effects have not been conclusively established, but the federal
government has determined it to be a potential human carcinogen. Because of
the health uncertainties, EPA has not regulated MTBE; instead it has simply
advised people not to drink water that contains concentrations in excess of
20 to 40 parts per billion. Fourteen states have gone further on their own
and partially or completely banned the use of MTBE within their borders or
established other regulations on its use. According to a December 2000
report on a survey of state tank program managers sponsored by EPA, 3
finding MTBE at a tank site does not typically affect the cleanup method but
can increase the time and cost of cleanup because MTBE travels faster and
farther than other gasoline contaminants. Several states reported that their
cleanup costs doubled as a result of addressing MTBE.

2 According to a recent EPA estimate, MTBE is used as an additive in about
87 percent of gasoline in the United States. 3 New England Interstate Water
Pollution Control Commission, A survey of State

Experiences with MTBE Contamination at LUST Sites (Dec. 15, 2000).

Page 3 GAO- 02- 753T MTBE from Underground Tanks

 States have made progress in addressing the releases they have discovered,
including MTBE contamination, but face a continuing and substantial cleanup
workload. States reported to EPA that they have completed cleanups of 64
percent of the more than 400, 000 identified releases as of the end of
fiscal year 2001, and have begun some type of cleanup action for another 26
percent. Nevertheless, states still have to both complete these ongoing
cleanups and begin cleanups for almost another 40, 000 releases, or
determine that they do not pose enough risk to warrant a cleanup. In
addition, states face a potentially large, but unknown, future workload in
addressing releases from a number of sources, as we previously reported.
These include unidentified abandoned tanks, identified but empty and
inactive tanks that have not yet been removed, active tanks that leak
because their leak detection and prevention equipment is not being properly
operated and maintained, and unreported leaks from tanks in those states
that do not inspect them. Some states reported that even their new tanks
with the latest leak detection and prevention equipment are leaking,
increasing the cleanup workload. A majority of the 13 states that we
contacted- those that had cleaned up many releases or had a large backlog
left to address- identified the lack of staff to oversee cleanups as a
barrier affecting cleanup progress.

 States typically depend on tank owners or operators to pay some portion of
cleanup costs and cover the remainder with their own funding programs. The
states depend on the relatively small federal trust fund grants to pay staff
to oversee cleanups and administer their programs. States typically do not
receive appropriations from their legislatures to cover their cleanup costs
but pay for them out of funds supported by state gasoline tax revenues,
annual tank fees, or both. In a May 2001 survey of state funding programs,
by the Vermont Department of Environmental Conservation, 4 36 states
reported having adequate funding to cover their current costs while 11
reported having more costs to cover than funds available. In addition, 16
states have stopped accepting, or are scheduled to stop accepting, new
claims for reimbursements, leaving it up to tank owners to obtain adequate
insurance or other means to cover their cleanup liabilities. In the future,
some states may seek additional federal support when and if their funding
programs end and they turn their attention to addressing

4 Vermont Department of Environmental Conservation, A Summary of State Fund
Survey Results (May 2001). The Department conducts this survey annually.

Page 4 GAO- 02- 753T MTBE from Underground Tanks

the many unidentified abandoned tanks nationwide that have no financially
viable owners to pay for cleanup.

While the full extent of MTBE contamination is unknown, most states reported
in the EPA- sponsored survey that they are finding the contaminant in
groundwater from releases at tank sites, and some are beginning to find it
in their drinking water sources. The extent to which the contaminant poses a
health risk is uncertain, however, in part because EPA does not yet have the
data necessary to determine MTBE?s health effects. Detecting MTBE from a
release typically does not influence the type of cleanup method selected,
but could increase the time and cost of the cleanup, according to a number
of states.

Portions of 17 states and the District of Columbia currently use gasoline
potentially containing the additive MTBE to limit air pollution (see figure
1). However, MTBE is being detected nationwide because, among other things,
it had been used as an octane enhancer in gasoline in the past and because
the pipes and trucks used to carry gasoline throughout the nation have been
cross contaminated with the substance. MTBE Has Been

Detected Nationwide But the Extent of Its Effect on Human Health and the
Cleanup of Releases Is Uncertain

Most States Have Found MTBE in Groundwater from Releases at Tank Sites;
Fewer Have Found It in Their Drinking Water

Page 5 GAO- 02- 753T MTBE from Underground Tanks

Figure 1: States Using MTBE and Other Fuel Additives to Limit Air Pollution

Source: EPA.

Forty- four states reported in the EPA- sponsored survey that they sample
groundwater at leaking tank sites and test it for MTBE. 5 Furthermore, 35
states reported that they find MTBE in groundwater at least 20 percent of
the time they sample for it, and 24 states said that they find it at least
60 percent of the time.

States are not only finding MTBE at tank sites with reported releases- half
of the states reported finding it at tank sites even when there was no
documented release, although they did not know the number of these cases.
About half of the states also reported finding MTBE that they could not
attribute to a leaking tank and suspected that it came from other sources,
such as above- ground tanks used to store fuel.

The extent of MTBE contamination may be understated because some tank
releases go undetected and because only 19 states said that they are

5 Washington reported that it planned to add such testing by 2001.

Page 6 GAO- 02- 753T MTBE from Underground Tanks

taking any extra steps to make sure that MTBE is not migrating further from
a tank site than other contaminants when a release has been detected. MTBE
is less likely to cling to soil than other gasoline components and dissolves
more easily in water, allowing it to travel faster, farther, and sometimes
deeper. Therefore, parties might have to use more test wells around a
leaking tank to determine if and where MTBE is present. If states do not
conduct the extra tests, they may not detect the MTBE.

Some of the states that have identified MTBE contamination have also found
that it reached drinking water sources. More states may not have reported
finding MTBE in part because only 24 states in the EPAsponsored survey said
that their drinking water program offices routinely analyzed drinking water
sources for MTBE, while another 24 said that their offices were not
conducting these analyses. Although a number of states were not sure how
many public or private drinking water wells had been contaminated by MTBE,
11 states said that at least 10 public wells had been contaminated at the
time of the survey, and 15 states reported that 10 private wells had been
closed. The Maryland Department of the Environment reported that MTBE was
found in low concentrations in about 100 of more than 1, 200 water systems
tested. In contrast, some communities in California, Kansas, and Maine have
had more extensive problems with contaminated groundwater. For example,
Santa Monica, California, closed seven wells supplying 50 percent of the
city?s water.

At the national level, the U. S. Geologic Survey (USGS) and EPA have
conducted some water- monitoring efforts, but have yet to find high
concentrations of MTBE in many drinking water sources. According to a USGS
study, MTBE was detected in generally lower concentrations in 14 percent of
surface water sources. 6 Another USGS study points out, however, that it was
10 times more likely to find MTBE in areas that use it as a fuel additive to
reduce pollution. 7 A third USGS study, done in cooperation with EPA and
issued in 2001, examined monitoring data from over 2, 000 randomly selected
community water systems in the northeast and mid- Atlantic regions and
reported that MTBE was detected in about 9

6 National Survey of MTBE, Other Ether Oxygenates, and Other VOCs in
Community Drinking Water Sources, U. S. Geological Survey (Open- File Report
01- 399, 2001). 7 Contaminants of Drinking Water Sources in 2001: Recent
Findings of the U. S.

Geological Survey, U. S. Geological Survey (Open- File Report 00- 510,
2001).

Page 7 GAO- 02- 753T MTBE from Underground Tanks

percent of the systems that analyzed samples for MTBE. 8 Finally, EPA has
completed the first year of a 3- year effort- under the recently implemented
Unregulated Contaminant Monitoring Rule- to have all large water systems
(serving populations of 10, 000 or more), as well as selected small public
water systems (serving populations of 3, 000 or less), test their water for
MTBE. Of the one- third of the systems required to test in the first year, 1
of 131 large systems and 3 of the 283 small systems detected the substance.

An interagency assessment of potential health risks associated with fuel
additives to gasoline, primarily MTBE, concluded that while available data
did not fully determine risks, MTBE should be regarded as a potential
carcinogenic risk to humans. 9 However, the extent that MTBE may be present
in high concentrations in drinking water and jeopardizing public health is
unknown. Because MTBE has a bad taste and odor at relatively low
concentrations, people may not be able to tolerate drinking contaminated
water in large enough quantities to pose a health risk. On the other hand,
some people may become desensitized to the taste and smell and could end up
drinking MTBE for years in their well water, according to the EPA program
manager.

EPA has efforts underway to fill in some of the data gaps on the health
effects of MTBE and its occurrence in drinking water supplies. Additional
research and water quality monitoring must be concluded before EPA can
determine whether a water quality standard- an enforceable limit on the
concentration of MTBE allowed in drinking water- is warranted. EPA has
issued an advisory suggesting that drinking water should not contain MTBE in
concentrations greater than 20 to 40 parts per billion, based on taste and
odor concerns. EPA is considering taking further steps to regulate MTBE, but
notes that to establish a federally enforceable standard could take about 10
years.

8 Occurrence and Distribution of Methyl tert- Butyl Ether and Other Volatile
Organic Compounds in Drinking Water in the Northeast and Mid- Atlantic
Regions of the United States, 1993- 98, U. S. Geological Survey (Water
Resources Investigations Report 00- 4228, 2001). 9 National Sciences and
Technology Council, Committee on Environment and Natural

Resources, Interagency Assessment of Potential Health Risks Associated with
Oxygenated Gasoline (Feb. 1996). Reviews on the Extent that

MTBE in Drinking Water Poses Health Risks Are Still Pending

Page 8 GAO- 02- 753T MTBE from Underground Tanks

While the potential health risks of MTBE are uncertain, 14 states-- 9 of
which are not required to use a fuel additive to limit air pollution in
certain areas- have partially or completely banned the use of MTBE within
their boundaries (see figure 2).

Figure 2: States That Have Banned MTBE

(year of ban) Source: EPA.

In addition, seven states reported in the December 2000 EPA- sponsored
survey that they had established their own health- based primary drinking
water standard for MTBE, as shown in figure 3. Six of these states currently
use fuel additives to limit air pollution and the seventh state voluntarily
used such additives until 1999.

Page 9 GAO- 02- 753T MTBE from Underground Tanks

Figure 3: States With a Health- Based Drinking Water Standard for MTBE

Source: A Survey of State Experiences with MTBE Contamination at Leaking
Underground Storage Tank Sites, New England Interstate Water Pollution
Control Commission (December 15, 2000).

Another five states reported establishing a secondary standard to limit the
allowable amount of MTBE in drinking water. These standards vary
considerably, however, with concentrations ranging from 5 to 70 parts per
billion.

According to the EPA- sponsored survey, 37 states said that finding
gasoline, or its components of concern, 10 in soil or groundwater at a tank
site is the primary driver of cleanup activities, not the presence of MTBE.
In other words, the methods used to clean up gasoline can also be used to
address MTBE contamination. These proven cleanup technologies include
pumping and treating groundwater at its source, treating the water at its
point of use by running it through a filter, or using a process known as air
sparging (injecting air into the contaminated area to volatilize and extract
MTBE). Letting the contaminant naturally break down over time- known

10 Some of the components of concern in gasoline include benzene, toluene,
ethylbenzene, and xylene Discovery of MTBE Does

Not Drive the Cleanup Methods Implemented, but Could Increase the Cleanup?s
Duration and Cost

Page 10 GAO- 02- 753T MTBE from Underground Tanks

as natural attenuation- may not be as effective as with other components of
gasoline because MTBE persists longer in soil and groundwater.

However, addressing MTBE could add time and costs to cleanups. According to
the EPA- sponsored survey, 16 states reported cost increases as a result of
MTBE cleanup, most less than 20 percent; 5 states reported that their costs
had doubled. States spent, on average, about $88, 000 addressing releases at
each tank site in fiscal year 2001. Nineteen states indicated that it could
cost more to test for MTBE because they take additional steps to ensure that
this contaminant is not migrating beyond other contaminants in a release.
Several states reported that their laboratories charged $10 to $50 more per
sample to analyze for MTBE. In addition, many of the 16 states that cited
higher cleanup costs for MTBE attributed these increases to such factors as
longer plumes and increased cleanup time. Finally, the discovery of MTBE can
increase costs because filters used to remove MTBE from water have to be
changed more frequently.

States reported to EPA that as of the end of 2001, they had completed
cleanups of 64 percent (267, 969) of the 416, 702 known releases at tank
sites and had begun some type of cleanup action for another 26 percent
(109,486), as figure 4 illustrates. States Have Made

Progress in Cleaning Up Tank Releases, but Still Face a Potentially Large
Cleanup Workl oad

Page 11 GAO- 02- 753T MTBE from Underground Tanks

Figure 4: States Have Made Progress in Cleaning Up Tank Releases

Note: Due to rounding, the percentages do not total 100 percent. Source:
GAO?s analysis of data provided by states to EPA.

Because states typically set priorities for their cleanups by first
addressing those releases that pose the most risk, states may have already
begun to clean up some of the worst releases to date. However, EPA tank
program managers cautioned that some of the many cleanups that are underway
may still be in their early stages because states have varying criteria for

?underway.? For example, California reports a cleanup is underway as soon as
a release is reported, even if no work has begun. In addition, states still
have to address the remaining 39, 247 known releases (9 percent) where
cleanup is not underway by either ensuring it has begun or is not needed
because the releases do not pose a risk. Figure 5 illustrates the remaining
cleanup workload for known releases in each state and the District of
Columbia.

Page 12 GAO- 02- 753T MTBE from Underground Tanks

Figure 5: States Still Have a Number of Cleanups to Initiate or Complete

Source: GAO?s analysis of data provided by states to EPA.

As the figure shows, while states have made progress, seven states still
have more than 5, 000 releases that they have not fully addressed. Most of
the 13 states we contacted cited a lack of staff as a barrier to achieving
more cleanups. For example, the May 2001 Vermont survey of state funding
programs indicated that, on average across the states, each staff person was
responsible for overseeing about 130 tank sites during that year.

In addition to this known workload, states most likely will continue to face
a potentially large but unknown future cleanup workload for a number of
reasons:

 In a June 2000 report to the Congress, EPA estimated that as many as
200,000 tanks nationwide may be unregistered, abandoned, or both, and have
not been assessed for leaks. 11

11 Report to Congress on a Compliance Plan for the Underground Storage Tank
Program,

U. S. Environmental Protection Agency (EPA 510- R- 00- 001, June 2000).

Page 13 GAO- 02- 753T MTBE from Underground Tanks

 Furthermore, even though many owners chose to close their tanks rather
than upgrade them with leak detection and prevention equipment as federally
required, tens of thousands of tanks nationwide are still empty and
inactive, and have not been permanently closed, as we previously reported.
Consequently, any leaks from these tanks may not have been identified.

 We also reported that an estimated 200,000 or more active tanks were not
being properly operated or maintained, increasing the chance of a spill or
leak. For example, 15 states reported that leak detection equipment was
frequently turned off or improperly maintained.

 In addition, we reported that many states do not inspect their tanks
frequently enough to ensure that they are not leaking and that known
releases are reported. Only 19 states were physically inspecting all of
their tanks at least once every 3 years- the minimum EPA considers necessary
for effective tank monitoring. In addition, 22 states were not inspecting
all of their tanks on any regular basis.

 While the number of leaks should decrease in the future- because all new
of active tanks should have leak detection and prevention equipment- we
previously reported that 14 states traced newly discovered leaks to upgraded
tanks and 20 states did not know whether their upgraded tanks leaked.

 Finally, 10 states reported in the EPA- sponsored survey that they had
reopened a small number of completed cleanups because MTBE had been
subsequently detected. If more states follow suit, the future cleanup
workload will increase, although the size of this workload is unknown. In
addition, states may be responsible for the costs of these reopened cleanups
because tank owners and operators are not required to maintain financial
responsibility for tanks that were properly cleaned up or closed.

Page 14 GAO- 02- 753T MTBE from Underground Tanks

States have relied primarily on their own funding programs and private
parties to pay for cleanups, using the relatively small federal trust fund
grants they receive for staff, program administration, and to a lesser
extent, cleanups. States? reliance on private and federal funding could
increase in the future if they end their funding programs and begin to
address the problem of abandoned tanks with no financially viable owner.

In creating the Underground Storage Tank program, the Congress expected tank
owners and operators to take financial responsibility for cleaning up
contamination from their tanks, correcting environmental damage, and
compensating third parties for any injuries. Tank owners and operators were
to demonstrate that they had the financial resources to cover potential
cleanup liabilities. Initially, private insurers were hesitant to take on
the risks of providing liability coverage to owners and operators of
underground storage tank systems, so many states created their own financial
assurance funds. These state funds could be used to cover the financial
responsibilities of owners and operators for site cleanup as long as long as
the state funds met the federal financial responsibility requirements.
Forty- seven states established such programs most often from a gasoline
tax, an annual tank fee, or both, rather than state appropriations. The
remaining three states relied on owners and operators to locate suitable
insurance, now more readily available, or other financial resources. Under
many state programs, owners or operators pay for the cleanup and seek
reimbursement for a portion of the cleanup costs from the state. Six of the
13 states we contacted cap the amount of reimbursements and expect tank
owners and operators to be financially liable for the remaining costs.

In the May 2001 Vermont survey of state funding programs, states reported
spending a cumulative $6. 2 billion from their funds since their programs
began (13 states did not report their costs). The amount of private funds
spent on cleanups is unknown. At the time of the survey, 36 states reported
having adequate funding to cover their current costs, but 11 other states
said that they were about $625 million short of the funds necessary to cover
known claims. Program managers in five of the 13 states we contacted said
that their state funds were stable. In addition, nine states States Rely on
Their

Own Programs and Private Parties to Pay for Cleanups, but May Require
Federal Funding to Accelerate Cleanups and Address Abandoned Tanks

State Funding Programs and Private Parties Have Paid for Most Cleanups

Page 15 GAO- 02- 753T MTBE from Underground Tanks

reported that eligibility for their programs had ended 12 -meaning they
would no longer accept any reimbursement claims for new releases- and
another seven states expected eligibility to end by 2026. Furthermore, the
program fees used to replenish state programs had expired in 1 state and
were expected to expire in another 12 states within the next decade. As a
result of these provisions, tank owners and operators would be responsible
for cleanup costs with no state funding support.

States have been using federal grants from the Leaking Underground Storage
Tank Trust Fund primarily to pay for staff to oversee cleanups and pursue
owners and operators so that they clean up their sites, according to the EPA
program manager. States cannot use these federal funds to clean up releases
when an owner or operator can pay. States spent $662. 5 million in federal
trust fund dollars from fiscal year 1987 through fiscal year 2001, roughly
10 percent of the expenditures from states? funds during the same period.
States used $19. 5 million, or 36 percent, of the $58.7 million they
received in fiscal year 2001 grants on cleanup (see figure 6).

12 In Maine, fund eligibility expired only for ?non- conforming? tanks-
those which had not been upgraded with leak detection and prevention
equipment. States Have Used Federal

Funds Primarily for Cleanup Oversight

Page 16 GAO- 02- 753T MTBE from Underground Tanks

Figure 6: States? Use of Grants from the Federal Trust Fund

Source: EPA.

Of the 13 states we contacted, 7 said that their programs rely on the
federal grants. On the other hand, for example, a program manager in Florida
said that the state?s program does not depend on federal grants because it
is a small amount of money compared with the amount coming from the state
fund. Some states use their federal funds for staffing costs. However, a
Maryland program official pointed out that the size of the annual federal
grants to states has not kept pace with the salary and other costs they must
cover for staff. An Indiana program official attributed a backlog of 4,000
cleanups at one point in the state?s program to a lack of federal funding
that could be used to pay for additional staff. States may be using their
federal trust fund grants to pay for staff because the use of these funds is
more restrictive than the state funds, which can be used to reimburse tank
owners for their cleanup costs, among other things.

Page 17 GAO- 02- 753T MTBE from Underground Tanks

Six states have used an additional funding source that receives federal
support to cover some cleanup costs, namely, their Clean Water State
Revolving Funds. States get federal seed money to initiate and maintain this
type of fund. Eligible parties can apply for loans under the fund and have
used them to cover a variety of leak prevention and cleanup projects.
According to the EPA, the six states using this vehicle have made a total of
$84 million in loans for tank cleanups through June 2000. Program managers
in 9 of the 13 states we contacted said that they did not expect to use
their revolving loan fund for tank cleanups.

In addition to the federal grants and loan funds, some states may look to
the federal government in the future to help them clean up those abandoned
tanks that pose health risks when financially viable parties cannot be
identified to pay for cleanups. States admit that they do not often identify
releases until they are closing or removing tanks, meaning that EPA and the
states might inadvertently be underestimating the risks and cleanup workload
that abandoned tanks pose.

States may seek additional federal assistance to address abandoned tanks if
state funding programs expire or are depleted. As of January 2002, states
can access one new source of federal funding for abandoned tanks, made
possible by the Small Business Liability Relief and Brownfields
Revitalization Act. Under the act, the Congress authorized up to $50 million
annually to clean up properties that may be contaminated by a petroleum
release, including abandoned tanks.

To respond to your questions, we primarily analyzed data (1) that states
reported to EPA on the status of tank releases, (2) from the December 2000
report on the EPA- sponsored survey of state tank programs, and (3) from the
May 2001 Vermont survey of state cleanup funding programs. In addition, we
contacted 13 state tank program managers to discuss their cleanup workload,
their concerns with MTBE, and their approach for funding cleanups. We
selected these states because they had addressed the largest number of
releases, had the largest backlog, or both. We also met with EPA tank
program managers to discuss cleanup efforts. We performed our work from
April to May 2002 in accordance with generally accepted government auditing
standards. Some States May Seek

More Federal Support for Cleanups in the Future

Scope and Methodology

Page 18 GAO- 02- 753T MTBE from Underground Tanks

Mr. Chairman, this concludes my statement. I would be pleased to respond to
any question you or Members of the Committee may have.

Contact and Acknowledgments

For further information, please contact John Stephenson at (202) 512- 3841.
Individuals making key contributions to this testimony were Ellen Crocker,
Rich Johnson, Eileen Larence, Gerald Laudermilk, Christopher Murray, and
Paul Schearf.

(360215)
*** End of document. ***
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