Appendix A

Configuration and Cost Assumptions for Airport Hydrant Fuel Distribution

Systems (AHFDSs) and UST Systems with Field-Constructed Tanks (FCTs)
A-1

This appendix provides detailed descriptions of the costs of the final regulation as they pertain to 

UST systems with field-constructed tanks (FCTs) and airport hydrant fuel distribution systems

(AHFDSs). The appendix begins with a broad overview of these two tank types and the costs 

they will incur as a result of the regulation, and then provides a detailed breakdown of cost 

calculations. 

A.1 Universe Description and Cost Summary for FCTs and AHFDSs 

In addition to conventional underground storage tank (UST) systems, the final regulation would 

affect two additional classes of tanks:

 Underground storage tank systems and ancillary equipment that are a part of an 

airport hydrant fuel distribution system (AHFDSs).

 UST systems with field-constructed tanks (FCTs).

EPA believes that large commercial and military airports employ AHFDSs, but most commercial 

systems typically use aboveground storage tanks for these systems. Based on a meeting with the 

U.S. Department of Defense (DoD) in March 2013 and supplemental information provided to 

EPA in April 2013, EPA identified 71 DoD facilities with AHFDSs subject to the final 

regulation. In addition, EPA identified ten commercial airports with AHFDSs potentially subject 

to the final regulation,

1

bringing the total number of affected AHFDSs to 81. Similarly, existing 

underground FCTs appear to be used only by federal facilities (primarily DoD). Based on the 

same March 2013 meeting with DoD and supplemental information provided to EPA in April 

2013, EPA identified 334 DoD FCTs subject to the final regulation. In addition, EPA identified 

12 FCTs owned by the U.S. Department of Energy (DoE) subject to the final regulation.2

A review of existing state regulations suggests that 44 percent of DoD-owned FCTs and 39

percent of DoD-owned AHFDSs are currently located in states that regulate these systems in a 

manner consistent with the regulatory revisions of the final regulation (i.e., these state programs 

already require compliance with state regulations that are roughly consistent with the final 

regulation).

3 We therefore assume that 56 percent of DoD-owned FCTs and 61 percent of DoDowned AHFDSs will incur additional costs due to the removal of the 1988 deferral. We also 

assume that each of the ten commercial airports with an AHFDS subject to the final regulation

will incur additional costs due to the removal of the 1988 deferral, as will each of the 12 DoE-

 

1 Based on public comments submitted and subsequent research conducted by EPA, EPA identified eight 

airports that would be subject to the final regulation: IND (Indianapolis International Airport), LCK (Rickenbacker 

International Airport), MCI (Kansas City International Airport), MKE (General Mitchell International Airport), 

ORD (O’Hare International Airport), RSW (Southwest Florida International Airport), STL (Lambert-St. Louis 

International Airport), and TUS (Tucson International Airport). In addition, EPA was unable to collect specific 

information regarding GUM (Antonio B. Won Pat International Airport) and SJU (Luis Munoz Marin International 

Airport), but have included them in the analysis as a conservatism.

2

See U.S. Department of Energy, ―U.S. Department of Energy Underground Storage Tank (UST) 

Compliance Strategy Report,‖ August 2006, p. A-32 to A-34. Note that the 12 tanks identified as FCTs on these 

pages are all in South Carolina, and are the only FCTs identified in this report.

3

Industrial Economics, Inc., ―Preliminary Assessment and Scoping of Data Related to Potential Revisions 

to the UST Regulations,‖ Work Assignment 1-25, Tasks 2-4, February 21, 2009, Appendix A, Exhibits 4 and 5.
A-2

owned FCTs.

4

For simplicity, however, detailed cost discussions in this appendix adjust for 

baseline regulatory compliance only after calculation of all costs.

Exhibit A-1a presents a breakdown of costs incurred by AHFDSs and FCTs as a result of the 

final regulation.

Exhibit A-1a – Cost Summary, Selected Option 

REQUIREMENT

COSTS 

ASSOCIATED WITH 

DOD AHFDSS 

($ MILLIONS)

COSTS 

ASSOCIATED 

WITH DOD FCTS 

($ MILLIONS)

COSTS ASSOCIATED 

WITH COMMERCIAL 

AIRPORT AHFDSS

($ MILLIONS)

COSTS 

ASSOCIATED 

WITH DOE FCTS 

($ MILLIONS)

TOTAL COSTS

($ MILLIONS)

Release detection $8.9 $10.0 $1.1 $0.018 $20.0

All other requirements associated 

with the removal of the 1988 

deferral (Subparts B, C, E, G, and 

H)

$0.031 $0.072 $0.0035 $0.0060 $0.11

Other requirements of the final 

rule (Walkthrough inspections; 

overfill prevention equipment 

tests; spill prevention equipment 

tests; testing after repairs to spill 

and overfill prevention equipment, 

and interstices; operator training; 

one-time notification of existence)

$0.35 $0.56 $0.055 $0.017 $0.99

Total $9.3 $11.0 $1.1 $0.041 $21.0

Note: These figures are adjusted for baseline regulatory compliance (i.e., only 56 percent of DoD-owned FCTs and 61 percent of 

DoD-owned AHFDSs incur costs associated with the removal of the 1988 deferral) and discounted to reflect the three-year 

implementation delay associated with the removal of the 1988 deferral. Compliance costs associated with all requirements other 

than compliance with Subparts E and G of 40 CFR 280 and one-time notification of existence are discounted by three years, whereas 

those three requirements take effect immediately.

Columns and/or rows may not sum exactly due to rounding.

Alternative Option 1 imposes limited requirements associated with the removal of the 1988 

deferral on both FCTs and AHFDSs, compared to the Selected Option. Specifically, under 

Alternative 1, AHFDSs and FCTs must provide one-time notification of existence to the 

implementing agency and report releases (40 CFR 280 Subpart E), but are not subject to any 

other requirements under the final regulation. Correspondingly, compliance costs for AHFDSs 

and FCTs under Alternative 1 are simply the sum of those components, as described below in 

this appendix in the appropriate sections. Exhibit A-1b provides the breakdown of these costs 

under Alternative 1. 

 

4 All 12 DoE-owned FCTs are located in South Carolina; a review of existing state regulations does not 

suggest that these systems are currently regulated in a manner consistent with the regulatory revisions of the final 

regulation.
A-3

Exhibit A-1b – Cost Summary, Alternative 1

REQUIREMENT

COSTS 

ASSOCIATED WITH 

DOD AHFDSS 

($ MILLIONS)

COSTS 

ASSOCIATED 

WITH DOD FCTS 

($ MILLIONS)

COSTS ASSOCIATED 

WITH COMMERCIAL 

AIRPORT AHFDSS

($ MILLIONS)

COSTS 

ASSOCIATED 

WITH DOE FCTS 

($ MILLIONS)

TOTAL COSTS

($ MILLIONS)

Release reporting 

(Subpart E) $0.014 $0.062 $0.0029 $0.0040 $0.083

One-time notification 

of existence $0.00015 $0.00073 $0.000020 $0.000026 $0.00093

Total $0.014 $0.062 $0.0029 $0.0040 $0.084

Note: These figures are adjusted for baseline regulatory compliance (i.e., only 56 percent of DoD-owned FCTs and 61

percent of DoD-owned AHFDSs incur costs associated with the removal of the 1988 deferral).

Columns and/or rows may not sum exactly due to rounding.

A.2 Key Cost Components Associated With Removing the 1988 Deferral – Selected 

Option for DoD-Owned FCTs and AHFDSs

Both AHFDSs and FCTs are currently deferred from most of the requirements in 40 CFR Part

280. The majority of costs associated with the removal of the 1988 deferral from both these types

of tank systems are associated with meeting the release detection requirements. The following 

sections correspond only to the key cost components and assumptions made for DoD-owned 

FCTs and AHFDSs; further sections in this appendix detail the cost components and assumptions 

for DoE-owned FCTs and commercial airport AHFDSs.

Release Detection Requirements 

Our analysis assumes that 50 percent of FCTs do not use an automatic tank gauge (ATG) for 

release detection, and would be required to conduct annual precision testing under the final 

regulation. We also assume that the remaining 50 percent of FCTs that do use ATGs do not 

currently conduct either monthly release detection monitoring or annual operability tests of their 

ATGs. Therefore, we assume that the final regulation will impose costs associated with both of 

these activities on owners and operators of FCTs. In addition, of those FCTs with ATGs that are 

operating at >0.2 gph, we assume those operating at a leak rate between 0.3 and 1.0 gallon per 

hour and between 1.0 and 2.0 gallons per hour will be required to conduct triennial (i.e., every 

three years) and biennial (i.e., every two years) precision testing, respectively, to achieve the 

release detection requirements of the final regulation. EPA provides various options for owners 

and operators to meet the release detection requirement. In this analysis, EPA assumes the most 

conservative option.

Our analysis assumes that no release detection methods are currently installed in the piping 

associated with FCTs. We assume that all piping associated with FCTs will need to undergo 

semiannual precision testing to achieve the final regulation’s release detection requirements.

For the tanks associated with AHFDSs, our analysis assumes that 50 percent do not currently 

have ATGs installed and will need to install them to achieve the release detection requirements
A-4

of the final regulation. In addition, we assume that the remaining 50 percent of tanks with ATGs 

installed do not currently conduct either monthly release detection monitoring or annual 

operability tests of their ATGs. The final regulation will impose costs associated with these 

activities on all owners and operators of AHFDSs.

Finally, we assume that while most AHFDSs currently have release detection installed for their

piping, these systems are not testing at the frequencies and rates that will be required under the 

final regulation. We therefore assume that all AHFDS piping will undergo semiannual precision 

testing to achieve the final regulation’s release detection requirements. EPA provides various 

options for owners and operators to meet the release detection requirement. In this analysis, 

EPA assumes the most conservative option.

The two following exhibits provide summary diagrams for the release detection (i.e., subpart D 

of 40 CFR Part 280) requirements associated with the removal of the 1988 deferral. Exhibit A-2

pertains to the tank and piping components of FCTs; Exhibit A-3 shows the requirements for the 

tanks and piping associated with AHFDSs. These diagrams are intended to provide a visual 

overview of the release detection requirements and assumptions modeled in this RIA; detailed 

explanations of the compliance costs associated with release detection requirements for FCTs 

and AHFDSs can be found in Section A.4 below.

Exhibit A-2: Release Detection Requirements and Assumptions Summary for DoD-Owned 

FCTs (universe = 334 FCTs, with size ranging between 50,000 and 6,000,000 gallons)

50% existing have ATGs

ATG operating at 0.2 gph

- monthly monitoring

costs for ATG 

- annual operability 

check of ATG

Piping associated with FCTs:

-Assume 100% are 1 mile:

-They would need to do precision test for piping, see AHSs

-Assume 0% are 300 ft (i.e., the same length associated with one facility):

-They would need to install LLD ($$$)

-They would have annual operability check of LLDs

-They would need to do an annual line tightness test (see ICR)

Precision Test 

at 0.5 gph

(annual)

Install ATGs

(at 0.3-1.0 gph)

Install ATGs

(at 1.0-2.0 gph)

50% need to do something

Precision Test

(every two years)

Precision Test

(every three years)

- monthly monitoring

costs for ATG 

- annual operability 

check of ATG

- monthly monitoring

costs for ATG 

- annual operability 

check of ATG

Assume 0% Assume 0% Assume 100% Assume 25%

ATG 

operating 

at >0.2 gph

Assume 75%

Assume 50% Assume 50%

Precision Test

(every two years) and

(1) inventory control every 30 

days; or

(2) VP/GW monitoring every 

30 days

Assume 0%

Active vapor monitoring 

using chemical tracer 

@0.1gph every 2 years

Assume 0%

Assume 0%

Inventory control every 30 days; and

(1) Precision text (every two years); or

(2) Passive VP/GW monitoring every 

30 days
A-5

Exhibit A-3: Release Detection Requirements and Assumptions Summary for DoD-Owned 

AHFDSs (universe = 71 AHFDSs)

Other Requirements 

Removing the 1988 deferral for AHFDSs and FCTs will also require these systems to comply 

with subparts B, C, E, G, and H of 40 CFR Part 280 (through the newly created subpart K). 

Furthermore, AHFDSs and FCTs will incur costs associated with other requirements of the final 

regulation that will apply to all UST systems. These include: walkthrough inspections; overfill 

prevention equipment inspections; spill prevention equipment tests; testing after repairs; 

notification of ownership change; and operator training (subpart J).

5

 Lastly, these systems will 

have to incur costs with a one-time notification of existence to the implementing agency, as well 

as a recordkeeping cost.

 

5 While EPA plans on requiring secondary containment on new tanks and piping, based on EPA’s 

discussion with various parties, EPA is assuming no new installations of underground FCTs are planned, and that all 

tanks being installed at AHFDSs are aboveground storage tanks (ASTs). As a result, we assume that there are no 

costs associated with requiring secondary containment for new tanks (since no new underground tanks are assumed 

to be installed for these systems). For AHFDS and FCT piping, EPA does not believe secondary containment with 

interstitial monitoring is appropriate due to the extreme length of AHFDS piping runs, which complicates the need 

to slope piping back to a containment sump, and the need for steel piping given the high pressures (since corrosion 

due to water in the interstitial space is hard to prevent or control). As a result, EPA is not requiring secondary 

containment for piping associated with these systems, and there are no costs associated with requiring secondary 

containment for new piping.
A-6

A.4 Detailed Cost Analysis – Release Detection at DoD-Owned FCTs and AHFDSs

This section pertains to the compliance costs associated with release detection for DoD-owned 

FCTs and AHFDSs. For AHFDSs at commercial airports, compliance costs associated with 

release detection are discussed in Section A.5. 

Release detection requirements represent a majority of all costs pertaining to DoD-owned FCTs 

and AHFDSs. It is also the most complex part of the cost calculations, with numerous inputs and 

parameters. Exhibit A-4 displays these values as well as the assumptions or basis behind them.6

Exhibit A-4 – Inputs and Parameters for Release Detection Compliance Cost Estimation at 

DoD-Owned AHFDSs and FCTs

INPUT/PARAMETER VALUE SOURCE/BASIS

Number of FCTs 334 See Chapter 2

Percent of FCTs without existing ATGs 50% EPA assumption

Percent of FCTs with existing ATGs 50% 100% less 50% of FCTs without existing ATGs

Percent of FCTs with existing ATGs 

operating at 0.2 gallon per hour 25% EPA assumption

Monthly release detection monitoring 

cost for ATGs $46

0.07 hours of technical labor, based on 0.05 hours of 

technical labor to record results monthly and 0.02 hours 

of technical labor to record daily inventory volume 

measurements

Annual operability test cost for ATGs $196

1.5 hours of technical labor, plus the full time value of 

money (TVM) cost to repair/replace components as 

needed (see Appendix D)

Percent of FCTs with existing ATGs 

operating at more than 0.2 gallon per 

hour

75% 100% less 25% of FCTs with existing ATGs operating at 

0.2 gallon per hour

Percent of FCTs with existing ATGs 

operating at more than 0.2 gallon per 

hour operating at 0.3 – 1.0 gallon per 

hour

50% EPA assumption

Percent of FCTs with ATGs operating at 

more than 0.2 gallon/ hour operating 

at 1.0 – 2.0 gallons/hour

50%

100% less 50% of FCTs with existing ATGs operating at 

more than 0.2 gallon per hour operating at 0.3 – 1.0 

gallon per hour

Average FCT size 1,105,750

gallons

Weighted average of FCT sizes based on information 

provided by DoD

Percent of FCTs with “long” associated 

piping of one mile 100% EPA assumption

Percent of FCTs with “short” 

associated piping of 300 feet 0% 100% less 100% of FCTs with “long” associated piping of one mile

 

6 Due to major data limitations, except otherwise indicated, the assumptions used to model these systems 

are based on EPA’s best professional judgment.
A-7

INPUT/PARAMETER VALUE SOURCE/BASIS

Percent of FCTs with “short” 

associated piping using electronic line 

leak detectors

50% EPA assumption

Percent of FCTs with “short” 

associated piping using mechanical line 

leak detectors

50% 100% less 50% of FCTs with “short” associated piping 

installing electronic line leak detectors

Electronic line leak detector 

installation cost (annualized) $82 TO 3003 TDD#9, page 8, inflated to 2012 dollars and annualized over 20 years with a 7 percent discount rate

Mechanical line leak detector 

installation cost (annualized) $25

TO 3003 TDD#9, page 8, inflated to 2012 dollars and 

annualized over 20 years with a 7 percent discount rate

Annual line leak detector line tightness 

cost $121 EPA Information Collection Request Number 1360.08, page 63, Exhibit 1, inflated to 2012 dollars

Line leak detector annual operability 

test cost $279

1.5 hours of technical labor, plus the full time value of 

money (TVM) cost to repair/replace components as 

needed (see Appendix D)

Number of DoD-owned AHFDSs 71 See Chapter 2

Number of tanks per AHFDS 8 See Chapter 2

Percent of tanks associated with 

AHFDSs with existing ATGs 50% EPA assumption

Percent of tanks associated with 

AHFDSs without existing ATGs 50% 100% less 50% of tanks associated with AHFDSs with existing ATGs

Installation cost for an ATG with eight 

probes (suitable for an AHFDS with 

eight associated tanks) (annualized)

$1,360

Cost of:

 ATG cost from TO 3003 TDD#9, p. 8; plus

 8 hours of technical labor at $75 for installation; plus

 $1,352 per probe for 7 additional probes;

 Inflated to 2012 dollars

 Annualized over 20 years with a 7 percent discount 

rate

Percent of AHFDSs using precision 

testing of piping as their release 

detection mechanism

100% EPA assumption

Number of miles per AHFDS (piping 

run) 5 EPA assumption

Number of “sections” per mile of 

piping in an AHFDS 2 EPA assumption

Percent of AHFDSs using an automatic 

line leak detector at 3.0 gallons per 

hour as their release detection 

mechanism

0% 100% less 100% of AHFDSs using precision test of piping 

as their release detection mechanism

Percent of AHFDSs needing to install 

double block-and-bleed (DBB) valves to 

comply with release detection 

requirements

5% EPA assumption

Amortized cost of DBB valve 

installation for 9 valves $127,430

Assumes a $150,000 cost (2012 dollars) per valve (9 total 

valves), annualized over 20 years with a 7 percent 

discount rate
A-8

INPUT/PARAMETER VALUE SOURCE/BASIS

Average precision test cost – tanks $22,823

Average of the estimated precision testing costs for a 

1,105,750 gallon tank as provided via three methods: 

Vista, Mass. Tech., and Varec. Vista costs $6,500 per 

tank, Mass. Tech. costs $2,000 - $25,000 depending on 

the size of the tank ($27,549 for a 1,105,750 gallon 

tank), and Varec costs $8,200 - $28,000 depending on 

the size of the tank ($30,158 for a 1,105,750 gallon 

tank). Cost inflated to 2012 dollars from 2008 dollars.

Average precision test cost – piping run $103,012

Average of the estimated precision testing costs for a 

piping run of five miles, with two sections per mile, 

provided via three methods: HCNA, Vista, and Varec. 

HCNA costs $5,500 per section, Vista costs $5,000 per 

section, and Varec costs $7 per foot.* Cost inflated to 

2012 dollars from 2008 dollars.

*The regulation differentiates release detection requirements by requiring precision testing and ATGs to monitor 

tanks and piping systems at a certain gallon per hour standard. Although it takes longer to complete a precision 

test at a lower leak rate, we do not cost out the downtime associated with these precision tests. Since many 

FCTs and AHFDSs are located at Department of Defense (DoD) facilities, it is likely that these facilities both have 

a plan in place to prevent the loss of essential functions during routine maintenance such as a precision test and 

do not have perpetual operations that would incur costs when forced to stop for a precision test. In addition, we 

believe it is reasonable to assume these DoD facilities will have backup systems in place such that routine 

maintenance would not impede operations. Similarly, for the few commercial airport facilities with AHFDSs, we 

assume the precision testing can be scheduled during facility downtime, so no additional costs associated with a 

longer precision test are incurred.

Release Detection for DoD-Owned FCTs

Release detection costs for DoD-owned FCTs can be broken down into costs related to tanks and 

costs related to the piping associated with the FCTs. Under the final release detection

requirements for FCTs, FCTs are required to use an acceptable release detection method, which 

entails any of the following:

 an ATG operating at a leak rate of 0.2 gallon per hour;

 annual precision testing at a leak rate of 0.5 gallon per hour;

 an ATG operating at a leak rate of less than 1.0 gallon per hour, and precision 

testing at 0.2 gallon per hour every three years;

 an ATG operating at a leak rate of between 1.0 and 2.0 gallons per hour, and 

precision testing at 0.2 gallon per hour every two years;

 active vapor monitoring using chemical tracer at a leak rate of 0.1 gallon per hour 

every two years; or
A-9

 inventory control at 0.50 percent of flow-through every 30 days; and (1) precision 

testing at a leak rate of 0.50 gallon per hour every two years; or (2) passive vapor 

monitoring or groundwater monitoring every 30 days.

7

We use the assumptions described in Exhibit A-4 to calculate the release detection costs 

associated with DoD-owned FCTs.

Given the assumptions that 50 percent of all DoD-owned FCTs have existing ATGs, and of 

these, 25 percent operate at a leak rate of 0.2 gallon per hour, we calculate monthly release 

detection monitoring costs of $23,212 (334 * 0.5 * 0.25 * $46 * 12) and annual operability test

costs of $8,171 (334 * 0.5 * 0.25 * $195.71). Thus, FCTs with ATGs currently operating at a 

leak rate of 0.2 gallon per hour incur a cost of $31,383 annually.

We assume that the remaining 75% of DoD-owned FCTs with existing ATGs operate at leak 

rates of either 0.3 to 1.0 gallon per hour or 1.0 to 2.0 gallons per hour, and must therefore also 

include a triennial or biennial precision test, respectively. We assume that the remaining universe 

of FCTs with existing ATGs is divided evenly between these two groups (i.e., 50 percent test 

every two years, and 50 percent test every three years). For those with existing ATGs operating 

at a leak rate of 0.3 to 1.0 gallon per hour, we calculate monthly release detection monitoring 

costs of $34,818 (334 * 0.5 * 0.75 * 0.5 * $46 * 12), annual operability test costs of $12,257 

(334 * 0.5 * 0.75 * 0.5 * $195.71) and biennial precision testing costs of $714,633 (334 * 0.5 *

0.75 * 0.5 * $22,823 * 0.5). Thus, FCTs with ATGs currently operating at a leak rate of 0.3 to 

1.0 gallon per hour incur a cost of $761,708 annually in total.

For FCTs with existing ATGs operating at a leak rate of 1.0 to 2.0 gallons per hour, we calculate 

similar monthly release detection monitoring and annual operability test costs, and triennial

precision testing costs of $476,422 (334 * 0.5 * 0.75 * 0.5 * $22,823 * 1/3). Thus, FCTs with 

ATGs currently operating at a leak rate of 1.0 to 2.0 gallons per hour incur a cost of $523,497

($476,422 + $34,818 + $12,257) annually.

For the 50 percent of FCTs without ATGs currently installed, we assume that an annual precision 

test is conducted. The total cost incurred by these DoD-owned FCTs annually is $3,811,379 (334 

* 0.5 * $22,823).

We assume that all DoD-owned FCTs have one mile of associated piping, which is subject to the 

release detection requirements applicable to AHFDSs (see below). The total annual costs 

incurred by the piping associated with FCTs are $13,762,396 (334 * $103,012 * 0.2 * 2).8

Total annual DoD-owned FCT release detection costs are $18,890,362, of which over 72 percent 

are related to the piping associated with these systems. However, as only 56 percent of FCTs 

 

7 Under the final regulation, FCTs can also use any other monitoring method approved by the implementing 

agency as a method of release detection. For modeling purposes, however, we assume, that owners or operators will 

only use the methods listed above.

8

Specifically, this formula multiplies the piping testing cost by 0.2 because the testing cost listed in Exhibit 

A-4 pertains to a five-mile piping run, while FCT-associated piping is assumed to be one mile length. The resulting 

cost is then doubled to account for semiannual testing.
A-10

incur costs associated with the removal of the 1988 deferral, actual DoD-owned FCT release 

detection costs applied in this RIA total approximately $10 million, rather than $19 million. 

Release Detection for DoD-Owned AHFDSs

Release detection costs for DoD-owned AHFDSs can be divided into tank costs and associated 

piping costs. For DoD-owned AHFDSs, we assume each hydrant system is supported by an 

average of roughly eight linked tanks.

We assume that 50 percent of the DoD-owned AHFDSs will have ATGs already installed, while 

ATGs would have to be installed on the remainder. For those systems with existing ATGs, we 

calculate monthly release detection monitoring costs to be $157,897 (71 * 8 [tanks] * 0.5 * $46 *

12) and annual operability test costs for the ATGs to be $55,583 (71 * 8 [tanks] * 0.5 * $195.71). 

Total annual costs for these tanks are thus $213,480.

For the 50 percent of existing tanks associated with DoD-owned AHFDSs that lack ATGs, we 

calculate annualized ATG installation costs to be $48,294 (71 * 0.5 * $1,360). Monthly release 

detection monitoring and annual operability test costs for the ATGs are identical to those stated 

above. Total annual costs for these tanks are thus $261,774 ($48,294 + $157,897 + $55,583). 

Overall, total annual costs for all tanks associated with DoD-owned AHFDSs are $475,254

($213,480 + $261,774).

One option of the final rule requires that the piping of AHFDSs undergo semiannual precision 

testing.

9

EPA is assuming the most conservative option in making this assumption. Total annual 

costs for the precision testing of piping associated with AHFDSs are $14,627,696 (71 * 2 *

$103,012).

Finally, we assume that five percent of DoD-owned AHFDSs will need to install double blockand-bleed valves (we assume nine valves to equip average piping runs of ten segments) to 

comply with release detection requirements. Total annualized costs associated with this 

component are $452,378 (71 * 0.05 * $127,430).

We calculate total annual release detection costs incurred by DoD-owned AHFDSs to be 

$15,918,432, of which over 94 percent are related to the piping associated with AHFDSs.

However, as only 61 percent of DoD-owned AHFDSs incur costs associated with the removal of 

the 1988 deferral, actual DoD-owned AHFDS release detection costs applied in this RIA total 

approximately $9 million, rather than $16 million.

Management Costs Associated with Release Detection – Selected Option

In addition to the direct costs of the final release detection requirements, we also estimate 

management costs associated with complying with the release detection component of the final 

regulation for DoD-owned FCTs and AHFDSs. These management costs consist of five percent 

overhead costs associated with government/contractor program management, ten percent 

 

9 The final regulation also allows for another method approved by the implementing agency.
A-11

government contracting costs, and one percent base support costs.10 Altogether, we estimate a 

sixteen percent management cost associated with release detection.

16 percent of total FCT release detection costs totals $3,002,458 ($18,890,362 * 0.16). 16 

percent of total AHFDS release detection costs totals $2,488,852 ($15,555,328 * 0.16). Total 

annual management costs associated with release detection thus total $5,551,310. In sum, under 

the Selected Option, release detection costs for DoD-owned FCTs and AHFDSs, including 

management costs, are $39,957,001. Again, as only a portion of DoD-owned FCTs and AHFDSs 

incur costs associated with the removal of the 1988 deferral, actual annualized release detection 

costs for DoD-owned FCT and AHFDS in this RIA total approximately $19 million ($10 million 

for Dod-owned FCTs and $9 million for DoD-owned AHFDSs) million, rather than $40 million.

All release detection costs for DoD-owned FCTs and AHFDSs are discounted three years when 

applied in the RIA to accommodate the three-year implementation period in the final regulation 

for these systems.

A.5 Detailed Cost Analysis – Subparts B, C, E, and G for DoD-Owned FCTs and

AHFDSs 11

Subpart B

Subpart B concerns the design, construction, installation, and notification of new FCTs and 

AHFDSs. We assume, however, that no new underground DoD-owned FCTs or AHFDSs will be 

installed. Thus, the requirements associated with Subpart B incur no costs.12

Subpart C

EPA assumes that both DoD-owned FCTs and AHFDSs are already equipped with corrosion 

protection (i.e., constructed of: non-corrodible material, coated and cathodically protected steel 

according to a code of practice developed by a nationally recognized association or independent 

testing laboratory, fiberglass reinforced plastic (FRP), or steel tank clad with FRP).13 EPA 

assumes continual monthly and annual inspections for corrosion protection. As a result, EPA 

assumes no incremental costs will occur associated with the cathodic protection inspection of 

Subpart C. However, we do assume that DoD-owned AHFDSs and FCTs will incur annual

recordkeeping costs associated with these inspections.

To estimate recordkeeping costs, we assume that each owner/operator will incur approximately 

$4.01 in labor cost (0.1 clerical hours) and approximately $0.09 in operation and maintenance 

costs. As each FCT is required to comply with this requirement, the annual cost for FCTs is 

 

10 Bulk Field Construct UST Testing Summary and Pipeline Testing Cost Summary provided by Defense 

Energy Support center (DESC) March 8, 2010, spreadsheet titled ―EPA Cost Summary.xlsx.‖

11 Where not otherwise cited, cost estimates and labor estimates in this section come from EPA Information 

Collection Request Number 1360.12.

12 EPA assumes that existing systems already meet spill, overfill, and corrosion protection requirements 

(based on meeting with DESC on February 18, 2010).

13 Based on a meeting between EPA/OUST and DESC on February 18, 2010.
A-12

$1,369.64 (approximately $4.10 * 334 FCTs). AHFDSs incur similar costs for maintaining 

records, which total $291.15 per year ($4.10 * 71 AHFDSs) (note that minor rounding affects 

these calculations).

Subpart C also requires owners and operators to conduct activities associated with the 

maintenance of repair records. This consists of: (1) gathering information on each repair; (2) 

conducting a tightness test 30 days after repair; and (3) actually maintaining records. EPA 

assumes three percent of FCTs and AHFDSs require repair annually.14 Gathering information on 

repair requires one technical hour of labor ($70.33), while maintaining records requires 0.1 

clerical hour of labor ($4.01) and $0.09 in operation and maintenance costs. 

For FCTs, we assume that tightness testing performed after a repair costs $1,866.16.

15 The total 

costs for FCTs to test and maintain records, based on an assumption of three percent of FCTs 

needing to undergo repair each year, are $19,444.72 [(334 * 0.03 * $74.34) + (334 * 0.03 * 

$1,866.16) + (334 * 0.03 * $0.09)]. Total FCT costs for Subpart C are then $20,814.36 

($19,444.72 + $1,370).

For AHFDSs, tightness testing following a repair must occur for every tank within the system. 

Given our assumption of an average of eight tanks associated with each AHFDS, we calculate 

costs associated with this portion of subpart C for AHFDSs, based on an assumption of three 

percent of tanks associated with AHFDSs to undergo repair each year, to be $31,957.88 [(71 * 

0.03 * $74.34) + (71 * 0.03 * 8 * $1,866,16) + (74 * 0.03 * $0.09)]. Total AHFDS costs for 

Subpart C are then $32,249.03.

Total Subpart C costs across DoD-owned AHFDSs and FCTs amount to approximately $53,000

annually. However, given that only a portion of these systems incur costs associated with the 

removal of the 1988 deferral, actual Subpart C costs applied in this RIA are approximately 

$31,000 instead. These costs are then discounted three years when applied in the RIA, to 

accommodate the three year implementation period in the final regulation for these systems, for a 

final Subpart C cost of approximately $25,000.

Subpart E

Subpart E requires owners and operators to report to the implementing agency suspected or 

actual releases of regulated substances, release investigation and confirmation, and reporting and 

cleanup of spills and overfills. Gathering information occurs on two levels – the facility level and 

the contractor level. Facilities are assumed to use one managerial hour and four technical hours 

on gathering information ($373.72 total), as well as $2,921.83 in operation and maintenance 

costs.16

 

14 See EPA Information Collection Request Number 1360.08.

15 Email from George Thuemling at Varec, October 23, 2009. Tightness cost estimates range from $1,000 

to $2,500, leading to an average of $1,750. This average was inflated to 2012 dollars, yielding approximately 

$1,866.16 for a tightness test.

16 Facility costs for gathering information include approximately $2,775, according to PCCI, ―Summary of 

the Preliminary Assessment of Baseline and Cost Impacts Associated with Deferred UST Systems,‖ July 2008, p. 

56, inflated to 2012 dollars. 
A-13

We assume contractors use five managerial hours, 31 technical hours, and 15 clerical hours 

($3,243.15 total) with no operation and maintenance costs. We assume five percent of all FCTs 

suspect a release each year.17 In addition, we assume 80 percent of suspected releases are 

reported (i.e., they meet reportable quantity requirements). Each report requires 0.25 managerial 

hours ($23.10) and $1.43 in operation and maintenance costs. Three percent of all FCTs are 

assumed to report a fill or overfill, and three percent are also assumed to notify the agency in the 

event that they are unable to clean up a spill. These notification costs are identical: 0.5 

managerial hours ($46.20 and $3.20 in operation and maintenance costs). 

Total DoD-owned FCT costs for Subpart E are then $110,843.89: 

 $60,710.31 in labor costs for reporting suspected releases ($373.72 * 0.05 * 334 + 

$3,243.15 * 0.05 * 334 + $23.10 * 0.04 * 334);

 $48,813.75 in operations and maintenance costs for reporting suspected releases 

($2,921.83 * 0.05 * 334 + $1.43 * 0.04 * 334); 

 $1,234.35 in labor costs for reporting and cleanup of spills and overfills ($46.2 * 0.04 * 

334 * 2); and

 $85.48 in operations and maintenance costs for reporting and cleanup of spills and 

overfills ($3.20 * 0.04 * 334 * 2).

AHFDSs incur identical costs to FCTs for compliance with Subpart E; these costs apply to the 71

existing DoD-owned AHFDSs (compared to 334 existing FCTs). Total DoD-owned AHFDS 

costs for Subpart E are $23,562.62:

 $12,905.48 in labor costs for reporting suspected releases ($373.72 * 0.05 * 71 + 

$3,243.15 * 0.05 * 71 + $23.10 * 0.04 * 71);

 $10,376.58 in operations and maintenance costs for reporting suspected releases 

($2,921.83 * 0.05 * 71 + $1.43 * 0.04 * 71); 

 $262.39 in labor costs for reporting and cleanup of spills and overfills ($46.2 * 0.04 * 71

* 2); and

 $18.17 in operations and maintenance costs for reporting and cleanup of spills and 

overfills ($3.20 * 0.04 * 71 * 2).

Total Subpart E costs across DoD-owned AHFDSs and FCTs amount to approximately 

$130,000. However, given that only a portion of these systems incur costs associated with the 

removal of the 1988 deferral, actual Subpart E costs applied in this RIA are approximately 

$76,000 instead. 

 

17 Industrial Economics, Inc., ―Preliminary Assessment and Scoping of Data Related to Potential Revisions 

to the UST Regulations; Tasks 2-4, Work Assignment 1-25,‖ November 20, 2008. See specifically Attachments 6 

and 11, Note 3.
A-14

Subpart G

Subpart G requires owners and operators conduct a site assessment of the excavation zone, as 

well as provide notification of closure or change-in-service. In addition, owners and operators 

must maintain records after permanent closure or change-in-service for at least three years, and 

mail records to the implementing agency if they are unable to maintain them on site. We assume 

that one DoD-owned FCT will close every five years. Notification of closure or change-inservice requires 0.25 managerial hours ($23.10) and $1.43 for operation and maintenance costs. 

Site assessment of the excavation zone takes place on two levels—the facility level and the 

contractor level. The facility level requires 2.75 managerial hours ($254.08) and $2,679.66 for 

operation and maintenance costs. The contractor level requires 6 managerial hours, 40 technical 

hours, and 18 clerical hours ($4,088.71). Maintaining records requires 0.1 hours of clerical time 

($4.01) and $0.09 for operation and maintenance costs. We assume that closing FCTs cannot 

maintain records on site, and will have to mail them to implementing agency at a cost of 0.5 

clerical hours ($20.03) and $3.20 in operation and maintenance costs. Total DoD-owned FCT 

costs for Subpart G are calculated as $1,414.86: [($23.1 + $1.43 + $254.08 + $2,679.66 +

$4,088.71 + $4.01 + $0.09 + $20.03 + $3.20) * 0.0006]. Note that this calculation multiplies the 

costs enumerated above by approximately 0.0006, or the number of FCTs closing every five 

years [1/(334*5)].

Subpart G for DoD-owned AHFDSs is similar to that for FCTs. We assume that one DoD-owned 

AHFDS will close every five years. In addition, we assume that closing AHFDSs cannot 

maintain records on site, and will have to mail them to their implementing agency at a cost of 0.5 

clerical hours ($20.03) and $3.20 in operation and maintenance costs. Thus, total DoD-owned 

AHFDS costs for Subpart G are $1,414.86: [($23.10 + $1.43 + $2,679.66 + $254.08 + $4,088.71

+ $4.01 + $0.09 + $20.03 + $3.20) * 0.0027]. Note that this calculation multiplies the costs 

enumerated above by approximately 0.0027, or the number of AHFDSs closing every five years 

[1/(74*5)].

Total Subpart G costs across DoD-owned AHFDSs and FCTs amount to approximately $2,800. 

However, given that only a portion of these systems incur costs associated with the removal of 

the 1988 deferral, actual Subpart G costs applied in this RIA are approximately $1,600 instead. 

A.6 Detailed Cost Analysis – Other New Regulatory Requirements for DoD-Owned 

FCTs and AHFDSs

AHFDS and FCT systems will also have additional requirements under the final regulation. This 

section summarizes the methodology for valuing those requirements. Note that the estimates in 

this section are generally consistent with the timing and costs required for other types of tanks 

(see Chapter 3 and Appendix D), but reflect a different labor rate more consistent with work 

performed at DoD facilities.

Unlike the costs estimated for the subparts of 40 CFR 280 described above, we assume that the 

requirements below are required for all DoD-owned FCTs and AHFDSs, and that costs apply to 

each affected system, rather than a subset of systems in those states that have not yet removed 

the deferral for these system types.
A-15

Walkthrough Inspections

The final regulation requires monthly walkthrough inspections for all tanks, including FCTs and 

AHFDSs. For FCTs, we assume the walkthrough inspection, which includes the cost of repairs, 

if necessary, requires 50 minutes of technical labor ($58.61) plus $10.66 in time value of money 

costs.

18 In addition, recordkeeping for this requirement costs $4.12 in total (0.1 hour of clerical 

labor at $4.01 plus $0.12 in operation and maintenance costs). As walkthrough inspections are 

required on a 30-day basis, the annual cost of this requirement for DoD-owned FCTs is 

$298,459.97: ($58.61 + $10.66 + $4.01 + $0.12) * (334 * 12.175).

For DoD-owned AHFDSs, we assume the walkthrough inspection requires 115 minutes of 

technical labor ($134.80) as well as $10.66 in time value of money costs. In addition, 

recordkeeping for walkthrough inspections for AHFDSs are identical to those for FCTs. The 

annual cost of this requirement for AHFDSs is $129,308.42: ($134.80 + $10.66 + $4.01 + $0.12) 

* (71 * 12.175).

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

Overfill Prevention Equipment Inspections

Under the Selected Option, the final regulation requires overfill prevention equipment 

inspections for all tanks, including FCTs and AHFDSs, every three years. We assume 8 hours of 

technical labor ($562.66) plus a testing cost of $228.20 per tank.19 In addition, there is a time 

value of money cost of $374.67, applied to the inspection cost. Recordkeeping for this 

requirement amounts to $4.12 ($4.01 for 0.1 hours of clerical labor and $0.12 in operation and 

maintenance costs). We calculate total annual costs for FCTs for the requirement to be 

$130,220.95: ($562.66 + $602.87 + $4.01 + $0.12) * (334 / 3). The overall cost is divided by 

three as the test is required for a given system only in every third year. 

Costs for overfill prevention equipment inspections are similar for AHFDSs, except that overfill 

prevention equipment inspections take place on a by-tank basis. Since we assume eight tanks per 

AHFDS, the total testing cost at one DoD-owned AHFDS is $9,324.22: ($562.66 + $602.87) * 8. 

Correspondingly, total annual costs for AHFDSs for this requirement are $220,770.74: 

($9,324.22 * 71 / 3) + ($4.01 + $0.12) * 71 / 3.

 

18 This is an annual cost stemming from costs incurred due to finding problems earlier under the regulatory 

requirements as compared with the baseline. See Appendix D for discussion on the time value of money. We 

assume that DoD facilities are not currently conducting any baseline testing or inspections of their systems 

analogous to the requirements modeled in this appendix associated with the removal of the 1988 deferral; 

correspondingly, we assess the entire weighted-average repair or replace cost on failure with each test or inspection. 

By contrast, for conventional UST systems, the RIA only applies the incremental portion of a weighted-average 

repair or replace costs based on how much sooner the owner or operator would have to acquire the repair or 

replacement. In other words, the RIA applies a partial time value of money cost to conventional UST systems, 

because tests or inspections only move up the schedule for incurring those repairs or replacements, while for DoDowned FCTs and AHFDSs, the RIA applies a full repair or replacement cost, as we assume that absent the 

requirement, the repair or replacement would never occur.

19 See Appendix D; the testing cost is the same as that applied to conventional UST systems.
A-16

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

Spill Prevention Equipment Tests 

Under the Selected Option, the final regulation requires spill prevention equipment tests for all 

tanks, including FCTs and AHFDSs, every three years. The testing component includes a cost of

$133.30 per spill prevention equipment unit, as well as $307.34 in time value of money costs.

20

As with the other requirements, there is a $4.12 recordkeeping component ($4.01 for 0.1 hours of 

clerical labor and $0.12 in operation and maintenance costs). For DoD-owned FCTs, the total 

annual cost of this requirement is $49,516.51: ($133.30 + $307.34 + $4.01 + $0.12 * 334 / 3). 

We assume that the USTs associated with DoD-owned AHFDSs do not have spill prevention 

equipment, and therefore do not require any spill prevention equipment tests.

21

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

Testing after Repairs to Spill and Overfill Prevention Equipment

The final regulation requires spill prevention equipment testing, overfill prevention equipment 

inspection, and the recordkeeping associated with both of these activities for all tanks that have 

undergone repairs, including FCTs and AHFDSs. We assume that 15.6 percent of all spill 

prevention equipment requires repairs every year, as the average spill prevention equipment test 

pass rate is 84.4 percent.22 We also assume that 21.4 percent of all overfills require repairs every 

year, as the average overfill equipment test pass rate is 78.6 percent.23 The testing costs 

associated with these tests include a cost of $358.33 for spill prevention equipment, and $400.00

for overfill prevention equipment.

24 For DoD-owned FCTs, the total annual cost for testing spill 

prevention equipment after repairs is $18,885.36: ($358.33+$4.12) * (334 * 0.156). The total 

annual cost for inspecting overfill prevention equipment after repairs for DoD-owned FCTs is 

$28,885.01: ($400.00 + $4.12) * (334 * 0.214). The total cost for this requirement for DoDowned FCTs adds to $47,770.37.

We assume the USTs associated with DoD-owned AHFDSs do not have spill prevention 

equipment. However, since the overfill prevention equipment inspections is performed on a pertank basis, each DoD-owned AHFDS requiring a repair incurs the inspection cost for each of its 

tanks. We assume an average of eight tanks associated with each DoD-owned AHFDS. Thus, for 

 

20 See Appendix D; the testing cost is the same as that applied to conventional UST systems.

21 The underground storage tanks associated with AHFDSs are typically intermediate tanks that are fed by 

larger tanks through permanently connected piping.

22 Based on information on test pass rates for spill bucket sumps.

23 Based on information on test pass rates for overfill alarms, flow restrictors, and automatic shutoff 

devices.

24 See Appendix D; the testing cost is the same as that applied to conventional UST systems.
A-17

DoD-owned AHFDSs, the total annual cost for inspecting overfill prevention equipment after 

repairs is $48,683.43: ($400.00 * 71 * 8 * 0.214) + ($4.12 * 71).

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

Ownership Change Notification & One-Time Notification of Existence

The final regulation requires notification of ownership changes from all facilities changing 

ownership. Each of these notifications requires 0.25 managerial hours, or $23.10. We assume 

that one percent of all DoD-owned FCTs (3.34 FCTs) will change ownership every year. Thus, 

the total annual cost for DoD-owned FCTs pertaining to this requirement is $77.15: $23.10 *

3.34.

In addition, the final regulation requires a one-time notification from all affected systems. This is 

simply the cost of notification ($23.10) amortized over 20 years using a seven percent discount 

rate, or $2.18, applied to each of the 334 FCTs. The total annual cost for DoD-owned FCTs for 

these requirements is $805.36: ($23.10 * 3.34) + ($2.18 * 334).

The costs incurred under these requirements are identical for DoD-owned AHFDSs. The total 

annual cost for AHFDSs for these requirements is $171.20: ($23.10 * 0.71) + ($2.18 * 71).

Recordkeeping Associated with Compatibility

EPA assumes that existing DoD-owned AHFDSs and FCTs are not storing regulated substances 

blended with more than ten percent alcohol, and therefore, owners and operators of these systems 

would not need to demonstrate compatibility with those fuel blends. As a result, no costs are 

assumed to be incurred due to this requirement.

Operator Training

The operator training requirement includes both the costs of testing and training operators, as 

well as associated recordkeeping. Testing and training costs include both annual and one-time, 

first-year costs. First-year costs are initial training costs incurred by all facilities. Annual costs 

are costs of training new staff necessary to serve as operators. These costs are calculated 

according to the methodology below.

We assume that each facility will require one Class A (managerial labor), one Class B (technical 

labor), and three Class C (military pay grade of E-6 with over 3 years of service) operators. For 

Class A and B operators, we assume 20 percent ―test out‖ and do not require training. For those 

testing out, the facility incurs the cost of a test (assumed to be $63.98 in 2012 dollars, inflated 

from $60 in 2008 dollars), as well as the 1.5 hours necessary to take the test.

25,26 Because only 20 

 

25 See Industrial Economics, Inc. ―Draft Methodology for Assessing Cost-Effectiveness of Operator 

Training Options,‖ Work Assignment 1-19, Task 4, December 30, 2008, page 12, Exhibit 2. Tests range from $45 to 

$75; $60 is the average test cost.

26 See http://www.iccsafe.org/certification/ust-ast/2009UST-AST.pdf, 1.5 hours is the length of California’s 

test.
A-18

percent of operators ―test out,‖ the test costs are, on average, $40.51 for Class A operators and 

$33.90 for Class B operators, or $63.98 + (1.5 * the labor rate) * 0.2. For the 80 percent that 

cannot ―test out,‖ each operator must take a no-cost online training that culminates in a final 

exam. The final exam costs $180.22 (inflated from $169 in 2008 dollars), and the training 

process requires ten hours of time.27 Thus, the cost for operator training for those not testing out 

is $883.31 for Class A operators and $706.83 for Class B operators, or $180.22 + (10 * the labor 

rate) * 0.8.

Class C operators are assumed to be trained by Class B operators. This training is assumed to 

take one hour of time for the Class B operator, as well as one hour each for the Class C operators 

being trained. Thus, the costs per facility for training Class C operators are $138.91, or $70.33 

(Class B operator hourly rate) plus $68.57 (the hourly rate for three Class C operators). The total 

one-year cost for a facility then, incurred in the first year that the Operator Training requirement

goes into effect, is $1,803.46, which, in its annualized form (over 20 years with a 7 percent 

discount rate) and including annual recordkeeping costs of $4.12, is $170.62.

Annual costs stem from turnover among operators, and the need to train new operators. 

Assuming a turnover rate of 22 percent per year for all operators, and that 20 percent of new 

Class A and Class B operators continue to ―test‖ out while all new Class C operators must 

receive initial training, we obtain annual costs of $317.82:

28

 For Class A operators, 0.22 * ($883.31 * 0.8) + 0.22 * ($40.51 * 0.2); plus

 For Class B operators, 0.22 * ($706.83 * 0.8) + 0.22 * ($33.90 * 0.2); plus

 For Class C operators, 0.66 * $46.30; plus

 Annual recordkeeping costs of $4.12.

For DoD-owned FCTs, operator training incurs a total annual cost of $163,139.65: ($170.62 + 

$317.82) * 334. For DoD-owned AHFDSs, operator training incurs a total annual cost of 

$34,679.39: ($170.62 + $317.82) * 71.

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

A.7 AHFDSs Located at Commercial Airports

In addition to AHFDSs located at DoD-owned facilities, EPA also identified ten commercial 

airports with AHFDSs potentially affected by the removal of the 1988 deferral in the final 

regulation. Based on discussions with these commercial airports, EPA compiled a set of 

 

27 See http://www.petroleumtrainingsolutions.com/resources/ColoradoAB.pdf, the Colorado ―webinar.‖ 

The exam requires approximately two hours, and the training consists of two four-hour sessions, for a total of ten 

hours.

28 We assume turnover rates for all classes to be between 20 and 24 percent per year; 22 percent is the 

average turnover rate. For Class C operators, this means that there is an annual turnover of 66 percent since we 

assume three Class C operators per FCT/AHFDS.
A-19

information regarding the structural set-up of these airports, and estimated compliance costs for 

the release detection requirements of the final regulation as they pertained to each individual 

airport. 

This section discusses the compliance costs associated with the removal of the 1988 deferral for 

these ten commercial airports. First, Section A.7.1 provides unique cost estimates for each of the 

ten airports identified as potentially subject to the final regulation. Then, Section A.7.2 explains 

the cost calculations for the additional requirements of the final regulation, as well as the 

additional subparts of 40 CFR 280 applicable to these airports.

Section A.7.1 – Release Detection Compliance Costs for AHFDSs Located at Commercial 

Airports

In order to estimate release detection compliance costs for commercial airport AHFDSs, we use 

a slightly-modified approach similar to that used to estimate release detection compliance costs 

for DoD-owned AHFDSs. Specifically, we model release detection for commercial airport 

AHFDSs in the following way:

 Determine whether the AHFDS has any tanks associated with it; if so, these tanks must 

comply with annual precision testing requirements;

 Determine the number of piping sections associated with the AHFDS; the piping must 

comply with semiannual precision testing requirements; and

 Determine whether any double block-and-bleed valves need to be installed to comply 

with release detection requirements, and if so, how many.

Parameters used for this analysis are similar to those in Exhibit A-4, with the following 

exceptions:

 For tanks, precision testing costs are $5,935 per tank, based on an average tank size of 

50,000 gallons, rather than upwards of the 1 million gallon average size used for the 

DoD-owned FCTs;

 Due to availability of information about the actual lengths and/or piping segments of 

commercial airport AHFDSs, specific per-segment testing costs can be applied ($5,598 

per segment); and

 Due to availability of information about baseline precision testing conducted by airports, 

only costs associated with incremental testing frequencies are applied.
A-20

STL

Lambert-St. Louis International Airport has an AHFDS with 12 associated tanks and 4 total 

piping sections. The tanks are tested every 5 years in the baseline.

Annual precision testing costs for tanks are $71,222.71 ($5,935 * 12), but incremental precision 

testing costs are $56.978.17 ($71,222.71 * 0.8). Annual precision testing costs for piping are 

$44,787.80 ($5,598 * 4 * 2). Total incremental costs for this AHFDS are $101,765.97

($56,978.17 + $44,787.80).

ORD

O’Hare International Airport (Chicago, IL) has 2 AHFDSs with 22 associated tanks and 24 total 

piping sections. 3 of the piping sections are tested semiannually in the baseline.29

Annual precision testing costs for tanks are $130,574.97 ($5,935 * 22). Annual precision testing 

costs for piping are $268,726.81 ($5,598 * 24 * 2), but incremental precision testing costs are 

$235,135.96 ($268,726.81 * 21 / 24). In addition, the AHFDS must install 9 dual block-andbleed valves, with a total annualized cost of $127.430.45. Total incremental costs for this 

AHFDS are $493,141.38.

MCI

Kansas City International Airport has an AHFDS with 3 total piping sections.

Annual precision testing costs for piping are $33,590.85 ($5,591 * 3 * 2). In addition, the 

AHFDS must install a dual block-and-bleed valve, with a total annualized cost of $14,158.94. 

Total costs for this AHFDS are $47,749.79 ($33,590.85 + $14,158.94).

MKE

General Mitchell International Airport (Milwaukee, WI) has an AHFDS with 2 associated tanks 

and 10 total piping sections.

Annual precision testing costs for tanks are $11,870.45 ($5,935 * 2). Annual precision testing 

costs for piping are $111,969.50 ($5,598 * 10 * 2). Total costs for this AHFDS are $123,839.96 

($11,870.45 + $111,969.50).

TUS

Tucson International Airport has an AHFDS with 4 associated tanks and 6 total piping sections. 

Annual precision testing costs for tanks are $23,740.90 ($5,935 * 4). Annual precision testing 

costs for piping are $67,181.70 ($5,598 * 6 * 2). Total costs for this AHFDS are $90,922.61 

($23,740.90 + $67,181.70).

 

29 18 tanks will be removed from this AHFDS in 5 years; this removal is not accounted for in the cost 

calculations as a conservatism.
A-21

IND

Indianapolis International Airport has an AHFDS, where total release detection costs are 

estimated at $10,000 based on information provided to the EPA.

RSW

Southwest Florida International Airport has an AHFDS with 5 total piping sections. Annual 

precision testing costs for piping are $55,984.75 ($5,598 * 5 * 2), and are the only release 

detection costs for this AHFDS.

LCK

Rickenbacker International Airport (Columbus, OH) has an AHFDS with 8 associated tanks and 

2 total piping sections. 

Annual precision testing costs for tanks are $47,481.81 ($5,935 * 8). Annual precision testing 

costs for piping are $22,393.90 ($5,598 * 2 * 2). Total costs for this AHFDS are $69,875.71 

($47,481.81 + $22,393.90).

GUM

Antonio B. Won Pat International Airport (Guam) has an AHFDS. EPA was unable to collect 

specific information regarding the associated tanks, piping segments, or baseline practices 

associated with this AHFDS. To ensure that we do not understate costs, we apply the standard 

DoD facility template to this airport, as the average DoD-owned AHFDS modeled in this 

appendix appears to contain more tanks and piping segments than most commercial airports 

AHFDSs examined.

Using a value of 8 associated tanks, total tank precision testing costs are $47,481.81 ($5,935 * 

8). Using a value of 10 total piping segments, total piping precision testing costs are $111,969.50 

($5,598 * 10 * 2). Total costs for this AHFDS are correspondingly assumed to be $159,451.31.

SJU

Luis Munoz Marin International Airport (Puerto Rico) has an AHFDS. EPA was unable to 

collect specific information regarding the associated tanks, piping segments, or baseline practices 

associated with this AHFDS. To ensure that we do not understate costs, we apply the standard 

DoD facility template to this airport, as the average DoD-owned AHFDS modeled in this 

appendix appears to contain more tanks and piping segments than most commercial airports 

AHFDSs examined.

Using a value of 8 associated tanks, total tank precision testing costs are $47,481.81 ($5,935 * 

8). Using a value of 10 total piping segments, total piping precision testing costs are $111,969.50 

($5,598 * 10 * 2). Total costs for this AHFDS are correspondingly assumed to be $159,451.31.

Total release detection costs for the 10 commercial airport AHFDSs consist of approximately 

$0.37 million in tank testing costs, $1.4 million in piping testing costs, and $0.14 million in 
A-22

double block-and-bleed valve installation costs. Total release detection costs for these systems 

are approximately $1.3 million. These costs are discounted three years when applied in the RIA, 

to accommodate the three year implementation period in the final rule pertaining to this 

regulatory requirement, for total Subpart D costs of approximately $1.1 million.

Section A.7.2 – Subparts B, C, E, G and H for AHFDSs Located at Commercial Airports

Subpart B

Subpart B concerns the design, construction, installation, and notification of new AHFDSs. We 

assume, however, that no new commercial airport AHFDS with sufficient underground piping to 

be affected by the final regulation will be installed. Thus, the requirements associated with 

Subpart B incur no costs.

Subpart C

Commercial airports already follow SPCC requirements. §§112.8(d) and 112.12(d) require that 

owners and operators of facilities generally protect buried storage containers and piping against 

corrosion. As a result, EPA assumes that commercial AHFDSs are already equipped with 

corrosion protection (i.e., constructed of: non-corrodible material, coated and cathodically 

protected steel according to a code of practice developed by a nationally recognized association 

or independent testing laboratory, fiberglass reinforced plastic (FRP), or steel tank clad with 

FRP). EPA assumes continual monthly and annual inspections for corrosion protection. As a 

result, EPA assumes no incremental costs will occur associated with the cathodic protection 

inspection of Subpart C. However, we do assume that AHFDSs will incur a recordkeeping cost 

associated with these inspections.

To estimate recordkeeping costs, we assume that each owner/operator will incur approximately 

$2.88 in labor cost (0.1 clerical hours) and approximately $0.09 in operation and maintenance 

costs. As each AHFDS is required to comply with this requirement, the annual cost for is $29.73 

(approximately $2.97 * 10 AHFDSs). 

Subpart C also requires owners and operators to conduct activities associated with the 

maintenance of repair records. This consists of: (1) gathering information on each repair; (2) 

conducting a tightness test 30 days after repair; and (3) actually maintaining records. EPA 

assumes three percent of AHFDSs require repair annually.30 Gathering information on repair 

requires one technical hour of labor ($51.39), while maintaining records requires 0.1 clerical 

hour of labor ($2.88) and $0.09 in operation and maintenance costs. 

For AHFDSs, we assume that tightness testing performed after a repair costs $1,866.16.

31 The 

total costs for AHFDSs to test and maintain records, assuming three percent of associated tanks 

undergo repair each year, are $576.16 [(10 * 0.03 * $54.27) + (10 * 0.03 * $1,866.16) + (10 * 

0.03 * $0.09)]. Total AHFDS costs for Subpart C are then $605.88 ($29.73 + $576.16).

 

30 See EPA Information Collection Request Number 1360.08.

31 Email from George Thuemling at Varec, October 23, 2009. Tightness cost estimates range from $1,000 

to $2,500, leading to an average of $1,750. This average was inflated to 2012 dollars, yielding approximately 

$1,866.16 for a tightness test.
A-23

These costs are discounted three years when applied in the RIA, to accommodate the three year 

implementation period in the final rule pertaining to this regulatory requirement, for total Subpart 

C costs of approximately $500.

Subpart E

Subpart E requires owners and operators to report to the implementing agency suspected or 

actual releases of regulated substances, release investigation and confirmation, and reporting and 

cleanup of spills and overfills. Gathering information occurs on two levels – the facility level and 

the contractor level. Facilities are assumed to use one managerial hour and four technical hours 

on gathering information ($291.90 total), as well as $2,921.83 in operation and maintenance 

costs.32

We assume contractors use five managerial hours, 31 technical hours, and 15 clerical hours 

($2,456.52 total) with no operation and maintenance costs. We assume five percent of all 

AHFDSs suspect a release each year.33 In addition, we assume 80 percent of facilities with 

suspected releases report them, which requires 0.25 managerial hours ($21.58) and $1.43 in 

operation and maintenance costs. Three percent of all AHFDSs are assumed to report a fill or 

overfill, and three percent are also assumed to notify the agency in the event that they are unable 

to clean up a spill. These notification costs are identical: 0.5 managerial hours ($43.17 and $3.20 

in operation and maintenance costs). 

Total AHFDS costs for Subpart E are then $2,881.43: 

 $1,382.85 in labor costs for reporting suspected releases ($291.90 * 0.05 * 10 + 

$2,456.52 * 0.05 * 10 + $21.58 * 0.04 * 10);

 $1,461.49 in operations and maintenance costs for reporting suspected releases 

($2,921.83 * 0.05 * 10 + $1.43 * 0.04 * 10); 

 $34.54 in labor costs for reporting and cleanup of spills and overfills ($43.17 * 0.04 * 10 

* 2); and

 $2.56 in operations and maintenance costs for reporting and cleanup of spills and 

overfills ($3.20 * 0.04 * 10 * 2).

Subpart G

Subpart G pertains to requirements upon closure of an AHFDS. We do not assume that any 

commercial airport AHFDSs with sufficient underground piping to be affected by the final 

 

32 Facility costs for gathering information include approximately $2,775, according to PCCI, ―Summary of 

the Preliminary Assessment of Baseline and Cost Impacts Associated with Deferred UST Systems,‖ July 2008, p. 

56, inflated to 2012 dollars. 

33 PCCI, ―Summary of the Preliminary Assessment of Baseline and Cost Impacts Associated with Deferred 

UST Systems,‖ July 2008, Attachments 6 and 11, Note 3.
A-24

regulation will undergo closure. Correspondingly, there are no compliance costs associated with 

Subpart G for commercial airport AHFDSs.

Subpart H

Subpart H pertains to obtaining financial assurance, and keeping proof of it on file. It is possible 

the commercial airports with AHFDSs already meet this requirement due to other financial 

assurance requirements and obligations. However, as a conservatism, we estimate the costs 

associated with using a financial test to self-insure as a means of satisfying the financial 

assurance requirement. According to EPA Information Collection Request Number 1360.12, 

obtaining and keeping on file proof of financial responsibility requires 0.25 hours of technical 

labor and 0.1 hours of clerical labor, plus approximately $0.09 in operations and maintenance 

costs. Correspondingly, total costs for Subpart H for the commercial airport AHFDSs are 

$158.21 ($15.73 * 10 + $0.09 * 10). These costs are discounted three years when applied in the 

RIA, to accommodate the three year implementation period in the final rule pertaining to this 

regulatory requirement, for total Subpart H costs of approximately $130. 

Section A.7.3 – Other New Regulatory Requirements for Commercial Airport AHFDSs

Commercial airport AHFDSs will also have to comply with additional requirements under the 

final regulation. This section summarizes the methodology for valuing those requirements. Note 

that the estimates in this section are generally consistent with the timing and costs required for 

other types of tanks (see Chapter 3 and Appendix D), but reflect a different labor rate more 

consistent with work performed at commercial airport facilities.

Walkthrough Inspections

The final regulation requires monthly walkthrough inspections for AHFDSs. For DoD-owned 

AHFDSs, we assume the walkthrough inspection requires 115 minutes of technical labor for a 

standard facility (i.e., 8 associated tanks, 5 miles of piping, with 2 sections of piping per mile of 

piping run). However, given that EPA obtained actual system information for the commercial 

airport AHFDSs, EPA was able to model walkthrough inspection costs for commercial airport 

AHFDSs as follows:

First, we calculated the total number of associated tanks and miles of piping run for each 

commercial airport AHFDS, then summed these two figures together. At a standard DoD-owned 

AHFDS, the total number of tanks plus miles was 13 (8 tanks plus 5 miles of piping run). We 

then scaled the time needed to complete a walkthrough inspection based on the sum of tanks and 

miles of piping at a given commercial airport AHFDS, using 115 minutes as the ―baseline‖ value 

for a system with some combination of 13 tanks and miles of piping run. Using this method, we 

determined that the most conservative estimate for a commercial airport AHFDS walkthrough 

inspection was approximately 301 minutes, based on 22 associated tanks and 12 miles of piping 

at one commercial airport AHFDS (34 / 13 * 115 = 301).

301 minutes of technical labor yields a labor cost of approximately $268.28, to which we add the 

time value of money costs of $10.66. To ensure that we do not understate costs, we then apply 

this cost to each of the ten commercial airport AHFDSs to yield 30-day walkthrough inspection 

costs of $32,663.19 ($268.28 + $10.66 * 10 * 12.175). We also add 0.1 hours of clerical labor 
A-25

($2.88) and $0.12 in recordkeeping operations and maintenance costs ($2.99 * 10 * 12.175 = 

$364.49) to arrive at a total walkthrough inspection cost of $33,027.68. These costs are 

discounted three years when applied in the RIA, to accommodate the three year implementation 

period in the final rule pertaining to this regulatory requirement, for total costs of approximately 

$27,000.

Overfill Prevention Equipment Inspections

Under the Selected Option, the final regulation requires overfill prevention equipment 

inspections for all tanks, including AHFDSs-associated tanks, every three years. We assume 8 

hours of technical labor ($411.13) plus a testing cost of $228.20 per tank.34 In addition, there is a

time value of money cost of $374.67, applied to the testing cost. Recordkeeping for this 

requirement amounts to $2.99 ($2.88 for 0.1 hours of clerical labor and $0.12 in operation and 

maintenance costs). We calculate total annual costs for the 64 tanks associated with the 10

commercial airport AHFDSs for this requirement to be $21.642.04: [($411.13 + $602.87) * 64 / 

3] + [$2.99 * 10 / 3]. The overall cost is divided by three as the test is required for a given system 

only in every third year. These costs are discounted three years when applied in the RIA, to 

accommodate the three year implementation period in the final rule pertaining to this regulatory 

requirement, for total costs of approximately $18,000.

Spill Prevention Equipment Tests 

We assume that the USTs associated with AHFDSs, including commercial airport AHFDSs, do 

not have spill prevention equipment, and therefore do not require any spill prevention equipment 

tests.35

Testing after Repairs to Spill and Overfill Prevention Equipment

The final regulation requires spill prevention equipment testing, overfill prevention equipment 

inspections, and the recordkeeping associated with both of these activities for all tanks that have 

undergone repairs, including FCTs and AHFDSs. We assume the USTs associated with AHFDSs 

do not have spill prevention equipment. However, since the overfill prevention equipment 

inspections is performed on a per-tank basis, each AHFDS requiring a repair incurs the 

inspection cost for each of its tanks. Using the total of 64 tanks across the ten commercial airport 

AHFDSs, we assume that 21.4 of all overfills require repairs every year, as the average overfill 

equipment test pass rate is 78.6 percent.36 The testing costs associated with these tests include a 

cost of $400 for overfill prevention equipment.37 Thus, for commercial airpot AHFDSs, the total 

annual cost for overfill prevention equipment inspections after repairs is $5,484.81: ($400 * 64 * 

0.214) + ($2.99 * 10). These costs are discounted three years when applied in the RIA, to 

 

34 See Appendix D; the testing cost is the same as that applied to conventional UST systems.

35 The underground storage tanks associated with AHFDSs are typically intermediate tanks that are fed by 

larger tanks through permanently connected piping.

36 Based on information on test pass rates for overfill alarms, flow restrictors, and automatic shutoff 

devices.

37 See Appendix D; the testing cost is the same as that applied to conventional UST systems.
A-26

accommodate the three year implementation period in the final rule pertaining to this regulatory 

requirement, for total costs of approximately $4,500.

Ownership Change Notification & One-Time Notification of Existence

The final regulation requires notification of ownership changes from all facilities changing 

ownership. We do not assume that any commercial airports with AHFDSs with sufficient 

underground piping to be affected by the final regulation will change ownership. 

In addition, the final regulation requires a one-time notification from all affected systems. This is 

simply the cost of notification ($21.58) amortized over 20 years using a seven percent discount 

rate, or $2.04, applied to each of the 10 commercial airport AHFDSs. The total annual cost for 

this requirement is $20.37: $2.04 * 10.

Recordkeeping Associated with Compatibility

EPA assumes that existing commercial airport AHFDSs and FCTs are not storing regulated 

substances blended with more than ten percent alcohol, and therefore, owners and operators of 

these systems would not need to demonstrate compatibility with those fuel blends. As a result, 

no costs are assumed to be incurred due to this requirement.

Operator Training

The operator training requirement includes both the costs of testing and training operators, as 

well as associated recordkeeping. Testing and training costs include both yearly and first-year 

costs. First-year costs are initial training costs incurred by all facilities. Annual costs are costs of 

training new staff necessary to serve as operators. These costs are calculated according to the 

methodology below.

We assume that each facility will require one Class A (managerial labor) and three Class B 

(technical labor) operators. For Class A and B operators, we assume 20 percent ―test out‖ and do 

not require training. For those testing out, the facility incurs the cost of a test (assumed to be 

$63.98 in 2012 dollars, inflated from $60 in 2008 dollars), as well as the 1.5 hours necessary to 

take the test.38,39 Because only 20 percent of operators ―test out,‖ the test costs are, on average, 

$38.70 for Class A operators and $28.21 for Class B operators, or $63.98 + (1.5 * the labor rate) 

* 0.2. For the 80 percent that cannot ―test out,‖ each operator must take a no-cost online training 

that culminates in a final exam. The final exam costs $180.22 (inflated from $169 in 2008 

dollars), and the training process requires ten hours of time.40 Thus, the cost for operator training 

for those not testing out is $834.88 for Class A operators and $1,665.92 for Class B operators, or 

 

38 See Industrial Economics, Inc. ―Draft Methodology for Assessing Cost-Effectiveness of Operator 

Training Options,‖ Work Assignment 1-19, Task 4, December 30, 2008, page 12, Exhibit 2. Tests range from $45 to 

$75; $60 is the average test cost.

39 See http://www.iccsafe.org/certification/ust-ast/2009UST-AST.pdf, 1.5 hours is the length of California’s 

test.

40 See http://www.petroleumtrainingsolutions.com/resources/ColoradoAB.pdf, the Colorado ―webinar.‖ 

The exam requires approximately two hours, and the training consists of two four-hour sessions, for a total of ten 

hours.
A-27

$180.22 + (10 * the labor rate) * 0.8 * 3. Annualizing these costs over a 20-year period using a 

seven percent discount rate yields annual initial training costs of $247.98. 

Annual costs stem from turnover among operators, and the need to train new operators. 

Assuming a turnover rate of 22 percent per year and that 20 percent of new Class A and Class B 

operators continue to ―test‖ out, we obtain yearly costs of $448.57:

41

 For Class A operators, 0.22 * ($834.88 * 0.8) + 0.22 * ($38.70 * 0.2); plus

 For Class B operators, 0.66 * ($555.31 * 0.8) + 0.66 * ($28.21 * 0.2); plus

 Annual recordkeeping costs of $4.12.

For commercial airport AHFDSs, operator training incurs a total annual cost of $6,965.38: 

($247.98 + $448.56) * 10. These costs are discounted three years when applied in the RIA, to 

accommodate the three year implementation period in the final rule pertaining to this regulatory 

requirement, for total annual costs of approximately $5,700.

A.8 DoE-Owned FCTs

This section discusses the compliance costs associated with the removal of the 1988 deferral for 

the 12 DoE-owned FCTs identified by EPA. First, Section A.8.1 provides cost estimates for the 

release detection requirement of the final regulation associated with the removal of the 1988 

deferral. Then, Section A.8.2 explains the cost calculations for the additional requirements of the 

final regulation, as well as the additional subparts of 40 CFR 280 applicable to these 12 DoEowned FCTs.

A.8.1. Release Detection Costs for DoE-Owned FCTs

Unlike the DoD-owned FCTs discussed in Section A.4, the DoE UST Compliance Strategy 

Report indicates that the 12 DoE-owned FCTs are relatively small, with capacities between 

2,000 and 10,000 gallons. Correspondingly, we assume that unlike the larger DoD-owned FCTs, 

the DoE-owned FCTs will install ATGs to meet their release detection requirements.

We assume that all 12 DoE-owned FCTs will install ATGs. From Exhibit A-4, the annualized 

cost of installing an ATG is $1,360; however, that cost corresponds to an ATG with 8 probes (to 

accommodate one for each tank associated with a DoD-owned AHFDS). Since each DoE-owned 

FCT must install an ATG with just one probe, the corresponding cost is $408.77. The total cost 

for installing ATGs for these 12 DoE-owned tanks is $4,893.20 ($408.77 * 12).

These FCTs must also conduct monthly monitoring and annual operability checks associated 

with the ATGs. Similar to the costs associated with DoD-owned FCTs and AHFDSs from 

Exhibit A-4, annual costs for monthly monitoring are $55.98 ($46.33 * 12) and annual costs for 

operability checks are $751.69 ($195.71 * 12). Total costs for the annual monitoring and checks 

for these 12 DoE-owned FCTs are thus $9,020.28 ( [$195.71 + $555.98] * 12).

 

41 We assume turnover rates for all classes to be between 20 and 24 percent per year; 22 percent is the 

average turnover rate. 
A-28

For release detection associated with piping, we assume that the DoE-owned FCTs have 300-foot

piping runs and will install automatic line leak detectors (LLDs) to meet release detection 

requirements. LLD installation costs are $53.50 per FCT, based on an average of the annualized 

installation costs for electronic LLDs and mechanical LLDs (see Exhibit A-4). These FCTs must 

also conduct annual operability checks and line tightness tests with annual costs of $278.89 and 

$121.10, respectively. Total costs associated with LLDs for these DoE-owned FCTs are 

$5,441.86: ( [$53.50 + $278.89 + $121.10] * 12).

Total release detection costs for the 12 DoE-owned FCTs amount to $19,355.35. Similar to the 

DoD-owned FCTs, we apply management costs of 16 percent, or $3,096.86. Correspondingly, 

total release detection costs, inclusive of management costs, are $22,452.20. These costs are 

discounted three years when applied in the RIA, to accommodate the three year implementation 

period in the final rule pertaining to this regulatory requirement, for total costs of approximately 

$18,000.

A.8.2 Additional Compliance Costs for DoE-Owned FCTs

In general, the costs discussed below are similar to those applied to DoD-owned FCTs. 

Subpart B

Subpart B concerns the design, construction, installation, and notification of new FCTs. We 

assume, however, that no new underground FCTs will be installed by DoE. 

Subpart C

EPA assumes that the DoE-owned FCTs, similar to the DoD-owned FCTs, are already equipped 

with corrosion protection (i.e., constructed of: non-corrodible material, coated and cathodically 

protected steel according to a code of practice developed by a nationally recognized association 

or independent testing laboratory, fiberglass reinforced plastic (FRP), or steel tank clad with 

FRP). EPA assumes continual monthly and annual inspections for corrosion protection. As a 

result, EPA assumes no incremental costs will occur associated with the cathodic protection 

inspection of Subpart C. However, we do assume the FCTs will incur a recordkeeping cost 

associated with these inspections.

To estimate recordkeeping costs, we assume that each owner/operator will incur approximately 

$4.01 in labor cost (0.1 clerical hours) and approximately $0.09 in operation and maintenance 

costs. As each FCT is required to comply with this requirement, the annual cost for FCTs is 

$49.21 (approximately $4.10 * 12 FCTs). 

Subpart C also requires owners and operators to conduct activities associated with the 

maintenance of repair records. This consists of: (1) gathering information on each repair; (2) 

conducting a tightness test 30 days after repair; and (3) actually maintaining records. EPA 

assumes three percent of FCTs require repair annually.42 Gathering information on repair 

requires one technical hour of labor ($70.33), while maintaining records requires 0.1 clerical 

hour of labor ($4.01) and $0.09 in operation and maintenance costs. 

 

42 See EPA Information Collection Request Number 1360.08.
A-29

We assume that tightness testing performed after a repair costs $1,866.16.

43 The total costs for 

FCTs to test and maintain records, based on an assumption of three percent of FCTs needing to 

undergo repair each year, are $698.61 [(12 * 0.03 * $74.34) + (12 * 0.03 * $1,866.16) + (12 * 

0.03 * $0.09)]. Total DoE-owned FCT costs for Subpart C are then $747.82 ($698.61 + $49.21).

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems, for a final Subpart C cost of 

approximately $610.

Subpart E

Subpart E requires owners and operators to report to the implementing agency suspected or 

actual releases of regulated substances, release investigation and confirmation, and reporting and 

cleanup of spills and overfills. Gathering information occurs on two levels – the facility level and 

the contractor level. Facilities are assumed to use one managerial hour and four technical hours 

on gathering information ($373.72 total), as well as $2,921.83 in operation and maintenance 

costs.44

We assume contractors use five managerial hours, 31 technical hours, and 15 clerical hours 

($3,243.15 total) with no operation and maintenance costs. We assume five percent of all FCTs 

suspect a release each year.45 In addition, we assume 80 percent of suspected releases are 

reported (i.e., they meet reportable quantity requirements). Each report requires 0.25 managerial 

hours ($23.10) and $1.43 in operation and maintenance costs. Three percent of all FCTs are 

assumed to report a fill or overfill, and three percent are also assumed to notify the agency in the 

event that they are unable to clean up a spill. These notification costs are identical: 0.5 

managerial hours ($46.20 and $3.20 in operation and maintenance costs). 

Total DoE costs for Subpart E are then $3,982.42: 

 $2,181.21 in labor costs for reporting suspected releases ($373.72 * 0.05 * 12 + 

$3,243.15 * 0.05 * 12 + $23.10 * 0.04 * 12);

 $1,753.79 in operations and maintenance costs for reporting suspected releases 

($2,921.83 * 0.05 * 12 + $1.43 * 0.04 * 12); 

 $44.35 in labor costs for reporting and cleanup of spills and overfills ($46.2 * 0.04 * 12 * 

2); and

 

43 Email from George Thuemling at Varec, October 23, 2009. Tightness cost estimates range from $1,000 

to $2,500, leading to an average of $1,750. This average was inflated to 2012 dollars, yielding approximately 

$1,866.16 for a tightness test.

44 Facility costs for gathering information include approximately $2,775, according to PCCI, ―Summary of 

the Preliminary Assessment of Baseline and Cost Impacts Associated with Deferred UST Systems,‖ July 2008, p. 

56, inflated to 2012 dollars. 

45 Industrial Economics, Inc., ―Preliminary Assessment and Scoping of Data Related to Potential Revisions 

to the UST Regulations; Tasks 2-4, Work Assignment 1-25,‖ November 20, 2008. See specifically Attachments 6 

and 11, Note 3.
A-30

 $3.07 in operations and maintenance costs for reporting and cleanup of spills and 

overfills ($3.20 * 0.04 * 12 * 2).

Subpart G

Subpart G requires owners and operators conduct a site assessment of the excavation zone, as 

well as provide notification of closure or change-in-service. In addition, owners and operators 

must maintain records after permanent closure or change-in-service for at least three years, and 

mail records to the implementing agency if they are unable to maintain them on site. We assume 

one FCT will close every five years. Notification of closure or change-in-service requires 0.25 

managerial hours ($23.10) and $1.43 for operation and maintenance costs. Site assessment of the 

excavation zone takes place on two levels—the facility level and the contractor level. The 

facility level requires 2.75 managerial hours ($254.08) and $2,679.66 for operation and 

maintenance costs. The contractor level requires 6 managerial hours, 40 technical hours, and 18 

clerical hours ($4,088.71). Maintaining records requires 0.1 hours of clerical time ($4.01) and 

$0.09 for operation and maintenance costs. We assume that closing FCTs cannot maintain 

records on site, and will have to mail them to implementing agency at a cost of 0.5 clerical hours 

($20.03) and $3.20 in operation and maintenance costs. Total DoE costs for Subpart G are 

calculated as $1,414.86: [($23.1 + $1.43 + $254.08 + $2,679.66 + $4,088.71 + $4.01 + $0.09 + 

$20.03 + $3.20) * 0.017]. Note that this calculation multiplies the costs enumerated above by 

approximately 0.017, or the number of FCTs closing every five years [1/(12*5)].

Walkthrough Inspections

Unlike DoD-owned FCTs, which are larger, we assume the walkthrough inspection for the DoEowned FCTs, which includes the cost of repairs, if necessary, requires 25 minutes of technical 

labor, consistent with the cost of a walkthrough inspection for conventional USTs (see Appendix 

D). This cost is $29.31 plus $10.66 in time value of money costs. In addition, recordkeeping for 

this requirement costs $4.12 in total (0.1 hour of clerical labor at $4.01 plus $0.12 in operation 

and maintenance costs). As walkthrough inspections are required on a 30-day basis, the annual 

cost of this requirement is $6,441.64: ($29.31 + $10.66 + $4.01 + $0.12) * (12 * 12.175).

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

Overfill Prevention Equipment Inspections

Under the Selected Option, the final regulation requires overfill prevention equipment 

inspections for all tanks, including FCTs, every three years. We assume 8 hours of technical 

labor ($562.66) plus a testing cost of $228.20 per tank.46 In addition, there is a time value of 

money cost of $374.67, applied to the inspection cost. Recordkeeping for this requirement 

amounts to $4.12 ($4.01 for 0.1 hours of clerical labor and $0.12 in operation and maintenance 

costs). We calculate total annual costs for the requirement to be $4,678.60: ($562.66 + $602.87 + 

$4.01 + $0.12) * (12 / 3). The overall cost is divided by three as the test is required for a given 

system only in every third year. 

 

46 See Appendix D; the testing cost is the same as that applied to conventional UST systems.
A-31

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

Spill Prevention Equipment Tests 

Under the Selected Option, the final regulation requires spill prevention equipment tests for all 

tanks, including FCTs and AHFDSs, every three years. The testing component includes a cost of 

$133.30 per spill prevention equipment unit, as well as $307.34 in time value of money costs.47

As with the other requirements, there is a $4.12 recordkeeping component ($4.01 for 0.1 hours of 

clerical labor and $0.12 in operation and maintenance costs). The total annual cost of this 

requirement is $1,779.04: ($133.30 + $307.34 + $4.01 + $0.12 * 12 / 3). 

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

Testing after Repairs to Spill and Overfill Prevention Equipment

The final regulation requires spill prevention equipment testing, overfill prevention equipment 

inspection, and the recordkeeping associated with both of these activities for all tanks that have 

undergone repairs, including FCTs. We assume that 15.6 percent of all spill prevention 

equipment requires repairs every year, as the average spill prevention equipment test pass rate is 

84.4 percent.48 We also assume that 21.4 percent of all overfills require repairs every year, as the 

average overfill equipment test pass rate is 78.6 percent.49 The testing costs associated with these 

tests include a cost of $358.33 for spill prevention equipment, and $400.00 for overfill 

prevention equipment.50 The total annual cost for testing spill prevention equipment after repairs 

is $678.52: ($358.33+$4.12) * (12 * 0.156). The total annual cost for inspecting overfill 

prevention equipment after repairs is $1,037.78: ($400.00 + $4.12) * (12 * 0.214). The total cost 

for this requirement for DoE-owned FCTs adds to $1,716.30.

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

Ownership Change Notification & One-Time Notification of Existence

The final regulation requires notification of ownership changes from all facilities changing 

ownership. Each of these notifications requires 0.25 managerial hours, or $23.10. We assume 

that one percent of all FCTs (0.12 FCTs) will change ownership every year. Thus, the total 

annual cost for DoE-owned FCTs pertaining to this requirement is $2.77: $23.10 * 0.12.

 

47 See Appendix D; the testing cost is the same as that applied to conventional UST systems.

48 Based on information on test pass rates for spill bucket sumps.

49 Based on information on test pass rates for overfill alarms, flow restrictors, and automatic shutoff 

devices.

50 See Appendix D; the testing cost is the same as that applied to conventional UST systems.
A-32

In addition, the final regulation requires a one-time notification from all affected systems. This is 

simply the cost of notification ($23.10) amortized over 20 years using a seven percent discount 

rate, or $2.18, applied to each of the 12 DoE-owned FCTs. The total annual cost for these 

requirements is $28.94: ($23.10 * 0.12) + ($2.18 * 12).

Recordkeeping Associated with Compatibility

EPA assumes that existing DoE-owned FCTs are not storing regulated substances blended with 

more than ten percent alcohol, and therefore, owners and operators of these systems would not 

need to demonstrate compatibility with those fuel blends. As a result, no costs are assumed to be 

incurred due to this requirement.

Operator Training

The operator training requirement includes both the costs of testing and training operators, as 

well as associated recordkeeping. Testing and training costs include both yearly and first-year 

costs. First-year costs are initial training costs incurred by all facilities. Yearly costs are costs of 

training new staff necessary to serve as operators. These costs are calculated according to the 

methodology below.

We assume that each facility will require one Class A (managerial labor), one Class B (technical 

labor), and three Class C (military pay grade of E-6 with over 3 years of service) operators. For 

Class A and B operators, we assume 20 percent ―test out‖ and do not require training. For those 

testing out, the facility incurs the cost of a test (assumed to be $63.98 in 2012 dollars, inflated 

from $60 in 2008 dollars), as well as the 1.5 hours necessary to take the test.51,52 Because only 20 

percent of operators ―test out,‖ the test costs are, on average, $40.51 for Class A operators and 

$33.90 for Class B operators, or $63.98 + (1.5 * the labor rate) * 0.2. For the 80 percent that 

cannot ―test out,‖ each operator must take a no-cost online training that culminates in a final 

exam. The final exam costs $180.22 (inflated from $169 in 2008 dollars), and the training 

process requires ten hours of time.53 Thus, the cost for operator training for those not testing out 

is $883.31 for Class A operators and $706.83 for Class B operators, or $180.22 + (10 * the labor 

rate) * 0.8.

Class C operators are assumed to be trained by Class B operators. This training is assumed to 

take one hour of time for the Class B operator, as well as one hour each for the Class C operators 

being trained. Thus, the costs per facility for training Class C operators are $138.91, or $70.33 

(Class B operator hourly rate) plus $68.57 (the hourly rate for three Class C operators). The total 

one-year cost for a facility then, incurred in the first year that the Operator Training requirement 

 

51 See Industrial Economics, Inc. ―Draft Methodology for Assessing Cost-Effectiveness of Operator 

Training Options,‖ Work Assignment 1-19, Task 4, December 30, 2008, page 12, Exhibit 2. Tests range from $45 to 

$75; $60 is the average test cost.

52 See http://www.iccsafe.org/certification/ust-ast/2009UST-AST.pdf, 1.5 hours is the length of California’s 

test.

53 See http://www.petroleumtrainingsolutions.com/resources/ColoradoAB.pdf, the Colorado ―webinar.‖ 

The exam requires approximately two hours, and the training consists of two four-hour sessions, for a total of ten 

hours.
A-33

goes into effect, is $1,803.46, which, in its annualized form (over 20 years with a 7 percent 

discount rate) and including annual recordkeeping costs of $4.12, is $170.62.

Yearly costs stem from turnover among operators, and the need to train new operators. Assuming 

a turnover rate of 22 percent per year for all operators, and that 20 percent of new Class A and 

Class B operators continue to ―test‖ out while all new Class C operators must receive initial 

training, we obtain yearly costs of $317.82:54

 For Class A operators, 0.22 * ($883.31 * 0.8) + 0.22 * ($40.51 * 0.2); plus

 For Class B operators, 0.22 * ($706.83 * 0.8) + 0.22 * ($33.90 * 0.2); plus

 For Class C operators, 0.66 * $46.30; plus

 Annual recordkeeping costs of $4.12.

Operator training for DoE-owned FCTs will incur a total annual cost of $5,861.30: ($170.62 + 

$317.82) * 12. 

These costs are then discounted three years when applied in the RIA, to accommodate the three 

year implementation period in the final regulation for these systems.

 

54 We assume turnover rates for all classes to be between 20 and 24 percent per year; 22 percent is the 

average turnover rate. For Class C operators, this means that there is an annual turnover of 66 percent since we 

assume three Class C operators per FCT/AHFDS.
Appendix B

Estimation of Affected UST Universe and Baseline State Regulations
B-1

B.1 Assumptions used for Universe Affected by Each Requirement

For each requirement, only facilities in states that do not already require it will be required to 

comply. This appendix presents EPA’s assumptions regarding the proportion of facilities that 

will be subject to additional costs in these states.

The proportions presented below include all conventional UST facilities and EGTs. Airport 

hydrant fuel distribution systems (AHFDSs) and underground storage tank (UST) systems with 

field-constructed tanks (FCTs) exist in addition to the number of systems presented in this 

Appendix. See Appendix A for assumptions used related to AHFDSs and FCTs.

B.1.1 Release Prevention

Walkthrough Inspections

 Requirement applies per facility.

 All facilities will be required to comply.

 In states where some walkthrough inspections are already required, owners and operators 

will be required to conduct additional walkthrough inspections. For example, if a state 

currently requires owners/operators to do one walkthrough inspection per year, they will 

now be required to conduct 11 additional walkthrough inspections per year.

 The requirement specifies a walkthrough inspection every 30 days. Many states currently 

require owners/operators to do one walkthrough inspection monthly, rather than every 30 

days. They will be required to conduct a fraction of one inspection over an annual period, 

to account for the possibility that in some years, a 30-day inspection schedule would 

yield 13 total inspections, whereas a monthly inspection schedule would always yield 12 

total inspections.

Overfill prevention equipment inspections

 Requirement applies per UST system.

 One overfill device per UST system.

 All facilities with overfill devices (i.e., all facilities) are required to comply.

Spill prevention equipment tests

 Requirement applies per UST system.

 One set of spill prevention equipment (e.g., spill bucket) per UST system.

 EPA assumes that 10 percent of existing spill prevention equipment is double-walled and 

has a self-monitoring mechanism to detect potential releases.
B-2

 Remaining 90 percent of spill prevention equipment will need to test.

Containment sump testing

 Requirement applies per UST system. For the analysis, each UST system has two underdispenser containment sumps, and one turbine sump.

 According to an analysis performed by E2Inc. under TO 3003, TDD 5, 18.30 percent of 

piping uses interstitial monitoring. This percent of systems will need to test.

Spill prevention equipment test after repair

 Requirement applies per UST system.

 EPA assumes that 90 percent of spill prevention equipment is replaced, rather than 

repaired.

 EPA assumes that spill prevention equipment requires repair every 4 years, such that 25 

percent of the universe is affected each year.

 Implies 2.5 percent of UST systems require testing each year.

Overfill prevention equipment inspection after repair

 Based on an analysis performed by E2Inc. under TO 3003, TDD 7, EPA assumes that 

100 percent of tanks have an overfill device.

 EPA assumes that 90 percent of these repairs result in replacement rather than repair.

 EPA assumes that these devices require repairs every 5 years. This implies 20 percent of 

the universe is affected each year.

 Implies two percent of UST systems require testing each year.

Secondary containment test after repair

 According to an analysis performed by E2Inc. under TO 3003, TDD 5, 19.76 percent of 

tanks use interstitial monitoring. EPA assumes that 95 percent of these use continuous 

sensors, pressure, vacuum, or liquid filled leak detection monitoring mechanisms, and 

therefore do not need to perform an integrity test. Thus, the remaining 0.99 percent of 

tanks use a type of monitoring that would require integrity testing.

 EPA assumes that an UST requires repair once every 20 years. This means five percent of 

the universe is affected each year

 Together these assumptions imply 0.05 percent of tanks require secondary containment 

testing each year.
B-3

 The same analysis shows that 18.30 percent of piping uses interstitial monitoring. EPA

assumes that 10 percent of pipes using interstitial monitoring use continuous pressure, 

vacuum, or liquid filled leak detection monitoring mechanisms, and therefore do not need 

to perform an integrity test. Thus, the remaining 16.47 percent of piping uses a type of 

monitoring that would require secondary containment testing each year.

 EPA assumes that piping requires repair once every 5 years, which means 20 percent of 

the universe is affected each year.

 Together, these assumptions imply 3.29 percent of piping systems require this type of 

testing each year.

Eliminate flow restrictors in vent lines as release prevention for all new tanks and when overfill 

prevention equipment is replaced

 Requirement applies per UST system.

 EPA assumes that UST systems are replaced every 20 years. This means five percent of 

the universe is replaced each year.

 EPA assumes that 13 percent of all new tanks would have installed flow restrictors. This 

implies that the total universe of new tanks affected by this requirement each year is 0.65 

percent.1

 In addition, based on analysis performed by E2 Inc. under TO 3003, TDD 21, EPA

assumes that 19 percent of tests of flow restrictors fail during testing (overfill prevention 

equipment is inspected every three years), and that in 90 percent of these cases, the fix 

requires replacement of the flow restrictor (also see overfill prevention equipment 

inspections in Appendix D).

 Correspondingly, at the midpoint of population turnover, which occurs in Year 10, 13.5

percent of the universe will be affected by this requirement.

B.1.2 Release Detection

Operability test for automatic tank gauges (ATGs)

 Requirement applies per UST system.

 According to an analysis performed by E2Inc. under TO 3003, TDD 5, 33.66 percent of 

the universe of UST systems uses an ATG as their release detection method.

 Each UST system using an ATG is required to comply.

 

1 Based on information provided by Robert Renkes, PEI.
B-4

Operability testing for interstitial monitoring

 Requirement applies per UST system.

 According to an analysis performed by E2Inc. under TO 3003, TDD 5, 19.76 percent of 

the universe of UST systems uses interstitial monitoring. However, EPA assumes that 

five percent of tanks relying on interstitial monitoring use manual testing and therefore 

would not be required to conduct operability tests. As a result, we estimate that 18.77 

percent of the universe of UST systems is required to comply with this requirement.

Operability testing for vapor and groundwater monitoring as release detection methods

(applicable for Selected Option and Alternative 1)

 Requirement applies per UST system.

 According to an analysis performed by EPA based on state data of groundwater 

monitoring and vapor monitoring currently in use by USTs, 2.31 percent of the universe 

of UST systems uses vapor monitoring, and 2.19 percent of the universe of UST systems 

uses groundwater monitoring. Of these, 0.39 percent use only groundwater monitoring; 

0.50 percent use only vapor monitoring; and 1.80 percent use both groundwater and 

vapor monitoring.

 Each UST system using vapor or groundwater monitoring as their primary or sole release 

detection method is required to comply.

 A percentage of systems using these methods must perform a site assessment and/or a 

well verification to continue using these methods as release detection to meet the 

requirements of the regulation. Based on EPA’s estimate of the distribution of systems 

using vapor monitoring and whether site assessments would be required under the final 

regulation, we estimate that approximately 12 percent of systems using vapor monitoring 

and 13 percent of systems using groundwater monitoring would need to conduct a site 

assessment, and, in addition 15 percent of systems using vapor monitoring and eight 

percent of systems using groundwater monitoring would need to conduct well 

verification.

Operability test for line leak detection (LLD)

 Requirement applies per UST system.

 This requirement applies to all UST systems that use pressurized piping delivery systems.

 According to an analysis performed by E2Inc. under TO 3003, TDD 5, 82.44 percent of 

the universe of UST systems uses a pressurized piping product delivery system. Of these, 

33.42 percent use electronic line leak detection, and 66.58 percent use mechanical line 

leak detection. As a result, EPA estimates that 27.55 percent of all UST systems use

electronic line leak detection for their pressurized piping delivery system. EPA therefore 

assumes that all of these systems (i.e., 27.55 percent of all UST system) will incur the 
B-5

cost of operability testing and the associated costs related to necessary repairs that may 

result from the testing.

Add SIR/CITLD to regulations with performance criteria

 Requirement applies per UST system

 According to an analysis performed by E2Inc. under TO 3003, TDD 5, 12.96 percent of 

the universe of UST systems uses statistical inventory reconciliation.

 EPA assumes 15 percent of these UST systems will be affected because they currently 

use methods that report only qualitative SIR results. Furthermore, EPA assumes that of 

these, only 25 percent will incur costs to comply with this requirement (i.e., these will 

need to change service providers to obtain quantitative SIR results). As a result, this 

requirement affects 0.5 percent of the universe of UST systems.

Response to interstitial monitoring alarms 

 Requirement applies per UST system.

 According to an analysis performed by E2Inc. under TO 3003, TDD 5, 19.76 percent of 

the universe of UST systems contains tanks using interstitial monitoring, and 18.30 

percent of the universe of UST systems contains piping using interstitial monitoring. 

 EPA assumes that three percent of alarms associated with tanks and ten percent of alarms 

associated with piping activate annually. This implies that each year, 0.59 percent of the 

UST universe consists of tanks using interstitial monitoring with alarms activating, and 

1.83 percent of the UST universe consists of piping using interstitial monitoring with 

alarms activating.

 Correspondingly, 2.42 percent of the UST universe must comply with this requirement.

Remove release detection deferral for EGTs

 All EGTs in states that have not already removed deferrals must comply with this 

requirement.

 EPA estimates that three percent of all UST systems are EGTs. This does not include 

nuclear EGTs.

B.1.3 Other

Remove deferral for AHFDSs

 All AHFDSs with associated UST systems must comply with this requirement.
B-6

 EPA estimates that 81 AHFDSs (71 DoD-owned AHFDSs and 10 AHFDSs at 

commercial airports) have associated UST systems and will be affected by this 

requirement. (see Appendix A)

Remove deferral for FCTs

 All FCTs must comply with this requirement.

 EPA estimates that 334 DoD-owned and 12 DoE-owned FCTs will be affected by this 

requirement. (see Appendix A)

Require notification of ownership change

 Requirement applies per facility.

 According to an analysis performed by E2Inc. under TO 3003, TDD 27, on average, 

approximately ten percent of facilities undergo an ownership change each year. 

Closure of lined tanks that cannot be repaired according to a code of practice

 Requirement applies per UST system.

 According to an analysis performed by E2Inc. under TO 3003, TDD 5, five percent of all 

UST systems are lined tanks.

 According to an analysis performed by E2Inc. under TO 3003, TDD 17, twelve percent 

of UST systems with lined tanks do not pass an inspection per year. Furthermore, 23 

percent of the UST systems that cannot pass an inspection cannot be repaired in 

accordance with a code of practice. 

 EPA assumes that 10 percent of lined tanks are inspected each year.

 As a result, 0.01 percent of the universe of UST systems must comply with this 

requirement. 

Requirements for demonstrating compatibility with fuels > E10 and > B20

 For existing UST systems, owners must use an UST system made of or lined with 

materials compatible with the fuel stored. In order to do this, owners must have existing 

records indicating what equipment has already been installed, and that equipment is 

compatible with alcohol blends greater than ten percent. EPA assumes that ten percent of 

existing owners would have adequate installation records. EPA also assumes these 

owners would maintain records and demonstrate compatibility on a per UST system 

basis.

 EPA assumes that 0.41 percent of USTs store fuel > E10, based on an analysis of total 

stations selling E85 fuel relative to total USTs.
B-7

 Under Alternative 1, for all new and replaced equipment, owners must maintain records 

for the life of the UST system, including date of installation or replacement, 

manufacturer, and model. EPA assumes one instance of equipment replacement per 

system storing fuels > E10 and > B20 per year.

B.1.4 Energy Policy Act-related Provisions

Operator training

 Requirement applies per facility.

 Requirement applies to all facilities in Indian country. EPA estimates that there are 

currently 966 facilities in Indian country.

Secondary containment for new and replaced tanks

 Requirement applies per UST system.

 Requirement applies to all UST systems in Indian country.

 EPA assumes that USTs are replaced every 20 years. This implies five percent of the 

universe is replaced each year.

 According to a Tribal Data Analysis performed by E2Inc., 72.36 percent of tanks in 

Indian country are single-walled.

 This means that in year 10, at the midpoint of population turnover, 36.18 percent of all 

tanks will have been required to comply with this requirement.

Threshold at which piping must be replaced rather than repaired

 Requirement applies per UST system.

 Requirement applies to all UST systems in Indian country.

 EPA assumes that interstitial piping needs to be repaired every five years.

 According to a Tribal Data Analysis performed by E2Inc., 60.30 percent of piping 

associated with UST systems is single-walled.

 Because EPA’s supplemental piping analysis suggests that no systems would incur 

incremental costs under a requirement to replace all piping if more than 50 percent of 

piping is replaced, no systems in Indian country are affected. 

Under-dispenser containment for all new dispensers

 Requirement applies per UST system.
B-8

 Two under-dispenser containment devices per UST system.

 Requirement applies to all UST systems in Indian country.

 EPA assumes that an UST system is replaced every 20 years. This means five percent of 

the universe is replaced each year.

 According to an analysis performed by E2Inc, if 5 percent of the universe is replaced 

each year, 4.85 percent of the UST systems in Indian country must comply with this 

requirement each year. (4.85 percent is roughly 97 percent of 5 percent, and we assume 

that EGTs, which are 3 percent of the universe, do not have under-dispenser containment 

devices.)

 This means that at year 10, the midpoint of population turnover, 48.50 percent of the UST 

systems in Indian country will meet this requirement.

B. 2 Assessment of State Regulatory Universes

This section provides information on current state regulatory environments as they pertain to the 

final requirements. Within the tables below, each requirement of the final regulation has a value 

for each state. Where the cell for a given state and requirement pair contains a zero, this indicates 

that the state does not have a similar requirement already in place. Where the cell for a given 

state and requirement pair contains a value, the meaning of this value varies according to the 

requirement in question:

 Walkthrough inspections – the monthly frequency within which inspections are required 

(a “12” in a cell indicates that the state requires annual walkthrough inspections, a “1” in 

a cell indicates that the state requires monthly walkthrough inspections).

- Because the final regulation requires walkthrough inspections every 30 

days, whereas most states require owners/operators to conduct monthly 

walkthrough inspections, the tables below note a walkthrough inspection 

every “1.0146 months” if a state requires monthly walkthrough inspections. 

This is because EPA’s modeling now assumes that 30-day inspections are 

equivalent to one “month unit,” and correspondingly, monthly inspections 

occur every 1.014583333 month units. Correspondingly, all other states

requiring owners/operators to conduct inspections on a monthly schedule 

(e.g., every 3 months, every 6 months) have had their frequencies scaled 

appropriately to reflect the incremental difference between state regulatory 

baseline schedules and a 30-day inspection schedule.

 Overfill prevention equipment inspections – the frequency in months within which 

testing is required.

 Spill prevention equipment tests - the frequency in months within which testing is 

required.
B-9

 Containment sump testing - the frequency in months within which testing is required.

 Spill prevention equipment test after repair – a “1” in a cell indicates that the state 

requires testing after repair.

 Overfill prevention equipment test after repair - a “1” in a cell indicates that the state 

requires testing after repair.

 Secondary containment test after repair - a “1” in a cell indicates that the state requires 

testing after repair.

 Eliminate flow restrictors in vent lines as release prevention for all new tanks and when 

overfill devices are replaced – a “1” in a cell indicates that the state has this requirement 

in place.

 Operability test for ATGs - the frequency in months within which testing is required.

 Operability test for interstitial monitoring - the frequency in months within which testing 

is required.

 Operability test for vapor monitoring - the frequency in months within which testing is 

required.

 Operability test for groundwater monitoring - the frequency in months within which 

testing is required.

 Operability test for line leak detection – the frequency in months within which testing is 

required.

 Adding SIR/CITLD to regulations with performance criteria - a “1” in a cell indicates 

that the state has this requirement in place.

 Deferrals removal for EGTs - a “1” in a cell indicates that the state has this requirement 

in place.

 Deferrals removal for AHFDSs - a “1” in a cell indicates that the state has this 

requirement in place.

 Deferrals removal for FCTs - a “1” in a cell indicates that the state has this requirement in 

place.

 Notification of ownership change - a “1” in a cell indicates that the state has this 

requirement in place.

 Closure of lined tanks that cannot be repaired according to a code of practice - a “1” in a 

cell indicates that the state has this requirement in place.
B-10

 Response to interstitial monitoring alarms - a “1” in a cell indicates that the state has this 

requirement in place.

 Operator training - a “1” in a cell indicates that the state has this requirement in place; for 

modeling purposes EPA is applying this requirement only to Indian country.

 Secondary containment for new and replaced tanks – a “1” in a cell indicates that the 

state has this requirement in place; “0” indicates that it does not; for modeling purposes, 

EPA is applying this requirement only to Indian country.

 Threshold for pipe replacement - the percentage threshold for pipe replacement within the 

state; for modeling purposes, EPA is applying this requirement only to Indian country.

 Under-dispenser containment - a “1” in a cell indicates that the state has this requirement 

in place for modeling purposes, EPA is applying this requirement only to Indian country.
B-11

Selected Option

State State name

Walkthrough 

inspections

Overfill 

prevention 

equipment 

inspections

Spill 

prevention 

equipment 

tests

Containment 

sump testing

Spill prevention 

equipment 

inspection after 

repair

Overfill prevention 

equipment test after 

repair

Secondary 

containment

test after repair

Elimination of 

flow restrictors in 

vent lines

AK Alaska 0 36 0 0 0 0 0 0

AL Alabama 0 0 12 0 0 0 0 0

AR Arkansas 0 0 0 0 0 0 0 0

AS American Samoa 0 0 0 0 0 0 0 0

AZ Arizona 0 0 0 0 0 0 0 0

CA California 1.0146 12 12 36 0 0 1 0

CO Colorado 1.0146 12 12 0 0 0 1 0

CT Connecticut 0 0 0 0 0 0 0 0

DC District of Columbia 0 0 0 0 0 0 0 0

DE Delaware 1.0146 0 12 0 0 0 0 1

FL Florida 0 0 12 0 0 0 0 0

GA Georgia 0 0 0 0 0 0 0 0

GU Guam 1.0146 0 0 0 0 0 0 0

HI Hawaii 0 0 0 0 0 0 0 0

IA Iowa 0 0 24 24 0 0 1 0

Tribal Tribal lands 0 0 0 0 0 0 0 0

ID Idaho 0 36 0 0 0 0 0 0

IL Illinois 0 0 0 36 0 0 1 1

IN Indiana 0 0 0 36 0 0 1 0

KS Kansas 0 0 0 0 0 0 0 0

KY Kentucky 0 0 12 0 0 0 0 0

LA Louisiana 0 0 0 0 0 0 0 0

MA Massachusetts 1.0146 36 0 0 0 0 0 0

MD Maryland 0 0 12 0 0 0 0 0

ME Maine 0.2341 12 0 0 0 0 0 1

MI Michigan 0 0 0 0 0 0 0 0

MN Minnesota 1.0146 0 0 1 0 0 0 0

MO Missouri 0 0 0 0 0 0 0 0

MP

Northern Mariana 

Islands 0 0 0 0 0 0 0 0

MS Mississippi 0 12 12 12 0 1 1 0
B-12

Selected Option

State State name

Walkthrough 

inspections

Overfill 

prevention 

equipment 

inspections

Spill 

prevention 

equipment 

tests

Containment 

sump testing

Spill prevention 

equipment 

inspection after 

repair

Overfill prevention 

equipment test after 

repair

Secondary 

containment

test after repair

Elimination of 

flow restrictors in 

vent lines

MT Montana 0 36 0 0 0 0 0 0

NC North Carolina 12.175 0 36 12 0 0 1 0

ND North Dakota 1 0 0 0 0 0 0 0

NE Nebraska 0 0 0 0 0 0 0 1

NH New Hampshire 1.0146 0 0 0 0 0 0 0

NJ New Jersey 1 0 0 0 0 0 0 0

NM New Mexico 1.0146 0 0 0 0 0 0 0

NV Nevada 0 0 0 0 0 0 0 0

NY New York 1.0146 1 0 0 0 0 0 0

OH Ohio 12.175 12 0 12 0 0 1 0

OK Oklahoma 0 0 0 0 0 0 0 0

OR Oregon 0 0 0 0 1 1 0 0

PA Pennsylvania 0 36 0 0 0 0 0 1

PR Puerto Rico 0 0 0 0 0 0 0 0

RI Rhode Island 1.0146 6 0 0 0 0 0 1

SC South Carolina 1.0146 1 0 0 0 0 0 0

SD South Dakota 0 0 0 0 0 0 0 0

TN Tennessee 1.0146 0 0 0 0 0 0 0

TX Texas 2.0292 1 0 0 0 0 0 1

UT Utah 1 0 0 0 0 0 0 0

VA Virginia 0 0 0 0 0 0 0 0

VI Virgin Islands 0 0 0 0 0 0 0 0

VT Vermont 1.0146 0 0 0 0 0 0 0

WA Washington 0 0 0 0 0 0 0 0

WI Wisconsin 1.0146 12 0 0 0 0 0 0

WV West Virginia 0 0 0 36 0 0 1 0

WY Wyoming 1.0146 12 0 0 0 0 0 0
B-13

Preferred Option

State State name

Operability 

test - ATGs

Operability 

test - IM

Operability test -

vapor monitoring

Operability test -

groundwater monitoring

Operability 

test - ELLD

Operability 

test - MLLD

Add SIR/ 

CITLD

Deferrals 

removal - EGTs

Deferrals 

removal -

AHFDSs

Deferrals 

removal -

FCTs

AK Alaska 0 0 0 0 0 1 0 1 1 1

AL Alabama 0 0 0 0 0 1 0 1 0 0

AR Arkansas 0 0 0 0 0 1 0 0 0 0

AS American Samoa 0 0 0 0 0 1 0 0 0 0

AZ Arizona 0 0 0 0 0 1 0 1 0 0

CA California 0 0 0 0 0 1 0 1 1 1

CO Colorado 0 0 0 0 0 1 0 0 0 0

CT Connecticut 0 0 0 0 0 1 0 0 0 0

DC

District of 

Columbia 0 0 0 0 0 1 0 1 0 0

DE Delaware 0 0 0 0 0 1 0 1 0 0

FL Florida 0 0 0 0 0 1 0 0 1 1

GA Georgia 0 0 0 0 0 1 0 0 0 0

GU Guam 0 0 0 0 0 1 0 1 1 1

HI Hawaii 0 0 0 0 0 1 0 0 0 0

IA Iowa 0 0 0 0 0 1 0 0 0 0

Trib

al Tribal lands 0 0 0 0 0 1 0 0 0 0

ID Idaho 0 0 0 0 0 1 0 1 1 1

IL Illinois 0 0 0 0 0 1 0 1 0 1

IN Indiana 0 0 0 0 0 1 0 0 0 0

KS Kansas 0 0 0 0 0 1 0 0 0 0

KY Kentucky 0 0 0 0 0 1 0 0 0 0

LA Louisiana 0 0 0 0 0 1 0 0 0 0

MA Massachusetts 0 0 0 0 0 1 0 0 1 1

MD Maryland 0 0 0 0 0 1 0 0 1 1

ME Maine 0 0 0 0 0 1 0 1 1 1

MI Michigan 0 0 0 0 0 1 0 0 0 0

MN Minnesota 0 0 0 0 0 1 0 0 0 1

MO Missouri 0 0 0 0 0 1 0 0 0 0

MP

Northern 

Mariana Islands 0 0 0 0 0 1 0 0 0 0
B-14

Preferred Option

State State name

Operability 

test - ATGs

Operability 

test - IM

Operability test -

vapor monitoring

Operability test -

groundwater monitoring

Operability 

test - ELLD

Operability 

test - MLLD

Add SIR/ 

CITLD

Deferrals 

removal - EGTs

Deferrals 

removal -

AHFDSs

Deferrals 

removal -

FCTs

MS Mississippi 0 0 0 0 0 1 0 0 0 0

MT Montana 0 0 0 0 0 1 0 1 0 0

NC North Carolina 0 0 0 0 0 1 0 0 0 0

ND North Dakota 0 0 0 0 0 1 0 0 0 0

NE Nebraska 0 0 0 0 0 1 0 0 0 0

NH New Hampshire 0 0 0 0 0 1 0 1 1 1

NJ New Jersey 0 0 0 0 0 1 0 0 1 1

NM New Mexico 0 0 0 0 0 1 0 1 0 0

NV Nevada 0 0 0 0 0 1 0 0 0 0

NY New York 0 0 0 0 0 1 0 1 1 1

OH Ohio 0 0 0 0 0 1 0 0 0 0

OK Oklahoma 0 0 0 0 0 1 0 0 0 1

OR Oregon 0 0 0 0 0 1 0 0 0 0

PA Pennsylvania 0 0 0 0 0 1 0 0 1 1

PR Puerto Rico 0 0 0 0 0 1 0 1 0 1

RI Rhode Island 0 0 0 0 0 1 0 1 1 1

SC South Carolina 0 0 0 0 0 1 0 0 0 0

SD South Dakota 0 0 0 0 0 1 0 0 1 1

TN Tennessee 0 0 0 0 0 1 0 0 0 0

TX Texas 0 0 0 0 0 1 0 1 1 1

UT Utah 0 0 0 0 0 1 0 0 0 0

VA Virginia 0 0 0 0 0 1 0 0 0 0

VI Virgin Islands 0 0 0 0 0 1 0 0 0 0

VT Vermont 0 0 0 0 0 1 0 1 1 1

WA Washington 0 0 0 0 0 1 0 1 0 0

WI Wisconsin 0 0 0 0 0 1 0 1 1 1

WV West Virginia 0 0 0 0 0 1 0 0 0 0

WY Wyoming 0 0 0 0 0 1 0 1 0 0
B-15

Preferred Option

State State name

Notification of 

ownership 

change

Closure of 

irreparable lined 

tanks

Response to 

interstitial 

monitoring 

alarms

Operator 

training

Secondary 

containment - new 

and replaced tanks

(Indian Country 

Only)

Threshold for 

pipe 

replacement

(%)

Underdispenser 

containment

AK Alaska 1 0 0 1 N/A 0 1

AL Alabama 1 0 0 1 N/A 0.05 1

AR Arkansas 1 0 0 1 N/A 0.05 0

AS American Samoa 1 0 0 1 N/A 0 0

AZ Arizona 0 0 0 1 N/A 0.25 0

CA California 1 0 1 1 N/A 0 1

CO Colorado 1 0 0 1 N/A 0.5 0

CT Connecticut 1 1 0 1 N/A 0 0

DC District of Columbia 1 0 0 1 N/A 1 0

DE Delaware 1 1 0 1 N/A 0 1

FL Florida 1 1 0 1 N/A 0 1

GA Georgia 0 0 0 1 N/A 0.25 0

GU Guam 1 0 0 1 N/A 0 0

HI Hawaii 1 0 0 1 N/A 0 0

IA Iowa 1 0 1 1 N/A 0.1 1

Tribal Tribal lands 0 0 0 0 0 1 0

ID Idaho 0 0 0 1 N/A 0 0

IL Illinois 1 1 1 1 N/A 0.2 1

IN Indiana 1 1 1 1 N/A 0.5 0

KS Kansas 1 0 0 1 N/A 0 0

KY Kentucky 1 0 0 1 N/A 0 0

LA Louisiana 1 0 0 1 N/A 0.25 1

MA Massachusetts 1 0 0 1 N/A 0 1

MD Maryland 1 1 0 1 N/A 0.4 1

ME Maine 1 1 0 1 N/A 0 1

MI Michigan 1 1 0 1 N/A 0.5 0

MN Minnesota 1 1 0 1 N/A 0.1 1

MO Missouri 1 0 0 1 N/A 0 0

MP Northern Mariana Islands 1 0 0 1 N/A 0 0
B-16

Preferred Option

State State name

Notification of 

ownership 

change

Closure of 

irreparable lined 

tanks

Response to 

interstitial 

monitoring 

alarms

Operator 

training

Secondary 

containment - new 

and replaced tanks

(Indian Country 

Only)

Threshold for 

pipe 

replacement

(%)

Underdispenser 

containment

MS Mississippi 1 0 1 1 N/A 1 1

MT Montana 1 0 0 1 N/A 0.5 1

NC North Carolina 0 0 1 1 N/A 0 0

ND North Dakota 0 0 0 1 N/A 0.1 1

NE Nebraska 1 0 0 1 N/A 0.1 0

NH New Hampshire 1 1 0 1 N/A 1 1

NJ New Jersey 1 0 0 1 N/A 0 0

NM New Mexico 1 0 0 1 N/A 0.05 1

NV Nevada 0 0 0 1 N/A 1 0

NY New York 1 0 0 1 N/A 1 0

OH Ohio 1 1 1 1 N/A 0 0

OK Oklahoma 1 1 0 1 N/A 0.2 1

OR Oregon 1 0 0 1 N/A 1 0

PA Pennsylvania 1 1 0 1 N/A 0.5 1

PR Puerto Rico 1 0 0 1 N/A 0 0

RI Rhode Island 1 0 0 1 N/A 1 0

SC South Carolina 0 0 0 1 N/A 0.25 0

SD South Dakota 1 0 0 1 N/A 0.25 1

TN Tennessee 1 0 0 1 N/A 1 0

TX Texas 1 0 0 1 N/A 0.2 1

UT Utah 1 0 0 1 N/A 0.99 0

VA Virginia 1 0 0 1 N/A 0.5 0

VI Virgin Islands 0 0 0 1 N/A 0 0

VT Vermont 1 1 0 1 N/A 0 1

WA Washington 1 0 0 1 N/A 0 0

WI Wisconsin 1 0 0 1 N/A 0.2 0

WV West Virginia 1 0 1 1 N/A 0.5 1

WY Wyoming 1 0 0 1 N/A 1 1
Appendix C

Analysis of Piping Replacement Thresholds
C-1

Confidential / Not for Release | October 28, 2009

MEMORANDUM | December 31, 2009

TO Cho-Yi Kwan, EPA

FROM Cynthia Manson, IEc

SUBJECT

Assessment of Piping Systems Affected (on Tribal Lands)Under Different Potential 

Regulatory Thresholds (WA 2-25, Task 8)

This document outlines IEc’s methodology for estimating the number of units affected by 

secondary containment regulations on piping on Tribal Lands. The accompanying 

spreadsheet (“Calculations”) is organized to identify the distribution of piping repairs of 

different lengths.

KEY ASSUMPTIONS AND INPUTS FOR REVIEW

Below we outline key elements and assumptions that drive the analysis. The most 

important elements are the total number of pipes requiring repair in a year, and the 

patterns of repairs for different piping types:

1. Number of Events: Based on information provided by EPA,1 we estimate that 

20 percent of Tribal piping systems (442 systems) require repair in a year (piping 

repairs required once in five years). This differs significantly from our previous 

assumption that piping repairs occur when releases occur. Using end-of-year 

data and autopsy data, we previously estimated that approximately 24 releases 

occur on Tribal lands and 31percent of those releases are related to piping, for a 

total of approximately 7 releases.

2. Distribution of Piping Systems by Type: Previous data provided by EPA

indicate that, of the piping systems located on Tribal lands (2208), 54 percent are 

fiberglass systems, 22 percent are flex-pipe systems, and 25 percent are steel pipe 

systems.

3. Fiberglass Repairs: Conversations with John Kneece and Marcel Moreau are 

consistent with earlier information collected, and indicate that:

a. Fiberglass piping is “virtually always” damaged as a result of “trauma” –

or some accident that damages the pipe (e.g., a backhoe). We interpret 

this to mean that roughly 90 percent of fiberglass piping is repaired to 

correct trauma.

b. Trauma-related repairs to fiberglass pipe typically involve small (roughly 

5-foot or less) sections of pipe.

c. Repairs not related to trauma are related to “failure” – or structural issues 

related to the piping. For fiberglass this is nearly always a problem with 

glue, and the entire run must be replaced/repaired. We assume that 10 

 

1

PEI indicated that repairs to the interstitial space of piping (including repairs of secondarily-contained piping sumps) 

occur once every five years. We assume this repair frequency for all piping systems.
C-2

Confidential / Not for Release | October 28, 2009

percent of fiberglass repairs therefore involve replacement of 100 feet

(100 percent) of piping.

4. Flex-pipe Repairs: Conversations with John Kneece and Marcel Moreau are 

also consistent with earlier information collected, and indicate that:

a. Flex-piping is damaged as a result of trauma “most” of the time. We 

interpret this to mean that roughly 80 percent of flex-piping is repaired 

to correct trauma.

b. Trauma-related repairs to flex-piping require replacement of an entire 

portion (section) of a piping run; based on conversations with EPA, we 

estimate that a typical UST would have one section of 50 feet and three 

section of 16.7 feet. We therefore assume that a typical repair would 

involve 16.7 feet of flex-piping.

c. Repairs due to failure in flex-piping typically involve connection or 

compatibility issues; in both cases the entire run must be replaced. We 

assume that 20 percent of flex-piping repairs therefore involve 

replacement of 100 feet (100 percent) of piping.

5. Steel Pipe Repairs: A conversation with John Kneece on October 9, 2009 is 

again, consistent with earlier, more general conversations, and indicates that:

a. The majority (75 percent) of repairs to steel piping is associated with 

failure; only 25 percent of repairs to steel piping are related to trauma.

b. For all repairs to steel piping, the length of pipe requiring repair varies 

across lengths with equal probability, though trauma-related repairs are

typically smaller than failure-related repairs. We therefore assume that 

100 percent of trauma-related repairs range from 10 to 50 feet in length. 

For failure related repairs, we assume that 50 percent of failure-related 

repairs range from 10 to 50 feet in length. We assume that the 

remaining 50 percent of failure-related repairs are greater than 50 feet 

in length.

6. Full Replacement Threshold: Consistent with earlier cost analysis, we assume 

that repairs over 50 feet would result in full replacement of pipes in the baseline. 

Prior analysis suggested that the breakeven point was roughly 58 feet, but this is 

subject to uncertainty, and we use 50 feet in this analysis.

KEY ANALYTIC ASSUMPTIONS

While we have information on the number of repairs required (see item 1 above) we must 

estimate the distribution of these repairs across piping types. To accomplish this, we 

assume the following:

 Trauma-related repairs are distributed proportionately across facilities and 

piping. We assume that these events occur randomly, and therefore, they would occur 

equally across piping types. To satisfy the proportions of trauma:failure repairs for 

each piping type (as described in items 3 through 5 above), we determine that 54 

percent of repairs (238) are trauma-related. 
C-3

Confidential / Not for Release | October 28, 2009

 Based on the assumptions outlined above, we assume that the following pipes 

would be replaced in the baseline, and are unaffected by the rule:

o All fiberglass failure-related repairs;

o All flex-pipe failure-related repairs;

o All steel pipe failure-related repairs over 50 feet (50 percent of all 

steel pipe failure-related repairs).

 Steel pipe replacement curve: to approximate steel pipe repairs without 

programming a continuous curve, we evenly distribute baseline repair lengths 

across five 8-foot intervals ranging from 10 feet to 50 feet. 

RESULTS

The analysis concludes the following:

 Of 442 repairs to pipes on Tribal lands, 235 involve steel pipes, 142 involve

fiberglass pipes, and the remaining 65 involve flex-pipes.

 The 142 fiberglass pipe repairs (32 percent of all repairs) are unaffected by the 

rule, because they are either too short (i.e., five feet or less) to trigger a threshold, 

or are already replaced in the baseline. 

 Another 101 repairs (23 percent) are unaffected by the rule because they 

represent full replacement in the baseline (13 flex-pipe replacements and 88 steel 

pipe replacements). 

 The remaining 199 (45 percent) repairs could potentially trigger full replacements 

under the rule, depending on the threshold. At a threshold of 10 feet, all 199 

repairs, including 52 trauma-related repairs to flex-pipe, would require 

replacement. At thresholds equal to or great than 20 feet, only steel piping (88 

piping systems) is affected by the rule. 

Exhibit 1 below summarizes the number of systems affected (i.e., the number of systems 

that would require replacement instead of repair) at different regulatory thresholds.

EXHIBIT 1: ANNUAL NUMBER OF SYSTEMS AFFECTED UNDER DIFFERENT REGULATORY THRESHOLDS

THRESHOLD NUMBER OF SYSTEMS AFFECTED TYPE OF SYSTEMS AFFECTED

10% threshold 199 (45%) Steel (147 systems)

Flex-pipe (52 systems)

15% threshold 170 (38%) Steel (118 systems)

Flex-pipe (52 systems)

20% threshold 88 (20%) Steel (88 systems)

25% threshold 88 (20%) Steel (88 systems)

40% threshold 29 (7%) Steel (29 systems)

50% threshold 0 (0 %) None
Appendix D

Methodology for Calculating Compliance Costs
D-1

D.1 Universal Assumptions Regarding a Typical UST Facility 

For modeling purposes, EPA (based on its professional judgment) assumes that a typical 

(average) conventional UST system is configured as follows:

Exhibit D-1: Universal cost model assumptions

Variable Total per Facility

Tanks per facility: 2.71 tanks 2.71 tanks

Pipes per tank: 1 pipe 2.71 pipes

Feet per pipe: 100 feet 271 feet

# of under-dispenser containment (UDC) 

per tank: 2 UDCs ~ 5.4 dispensers

# of fill pipes per tank: 1 fill pipe 2.71 fill pipes

# of spill prevention equipment per fill pipe:

1 spill prevention 

equipment

2.71 spill prevention 

equipment

# of turbine sumps per tank: 1 turbine sump 2.71 turbine sumps

In addition, we assume that the baseline number of existing tanks is 577,981 tanks (based on 

FY2013 data).1 We also assume that the baseline number of tanks remain constant over time (i.e., new 

facilities will replace closures).2 This assumption simplifies the analysis by establishing a constant 

nominal compliance cost per year.

D.2 Labor Rates 

The facility labor costs presented herein reflect labor, overhead, and fringe benefits rates that EPA 

believes best reflect a “typical” UST facility. These labor rates are representative of skilled labor costs at 

motor fuel retailers, which own and operate roughly 80 percent of the universe of UST systems.3 We 

present these calculations in Exhibit D-2.

 

1 Assuming 2.71 tanks per facility, this is equivalent to a total of 213,277 facilities that have USTs 

nationwide. (See “Summary of Key Data from State Public Record Postings,” Skeo Solutions, Work Order 1006, 

Table 1, October 25, 2013.)

2 Recent trends in the number of active USTs reported to EPA have shown a declining trend; in most recent 

years the net decline in the UST system population has been roughly 1.2 percent, with closures more than offsetting 

replacements and new installations. If this trend continues, the annual costs of the regulation will likely decrease 

over time as fewer systems require compliance. However, in absence of other data, we assume that new installations 

and upgrades will offset all closures, and that annual compliance costs will remain constant. 

3 These rates are based on data from the Bureau of Labor Statistics (“BLS”) and the Office of Management 

and Budget (“OMB”). These rates differ from the labor rates contained in OUST’s 2007 Information Collection 

Request (ICR) 1360.08 or OUST’s 2011 ICR 1360.12. The labor rates listed in the ICR are reflective of economywide average wages, benefits, and overhead, and may overstate costs because they reflect industries with highly 

skilled labor requirements and benefits (e.g., law firms.) 
D-2

Exhibit D-2: Labor Rates Used in Central Cost Estimates

Labor Category SOC Code

Labor Rates Before Overhead and 

Benefits (2011 dollars)

Loaded Labor Rate 1

(2012 dollars)

Legal 2

23-1011 $62.74 $100.76

Managerial 3

11-0000 $35.54 $57.08

Technical 2

53-1021 $22.52 $36.17

Clerical 3

43-9061 $11.28 $18.12

Technical for operability tests 2

49-2094 $25.20 $40.47

OMB overhead 4

12%

BLS fringe benefits 5

28.82%

Notes:

1. Rates are calculated according to (labor rate)*(1/(1-benefits factor))*(1+overhead factor).

2. Legal wages, technical wages, and technical wages to conduct operability tests are based on the May 2011 National 

Occupational Employment and Wage Estimates – United States from the U.S. Bureau of Labor Statistics 

(http://www.bls.gov/oes/2011/may/oes_nat.htm). EPA uses the national wage estimates for legal labor (23-1011) and technical 

labor for operability testing (49-2094) because they were unavailable under the industry-specific wage estimates for NAICS 

447000. EPA uses the national wage estimates for the technical labor category (53-1021) as a conservative (i.e., central-to-high 

cost) estimate; the lower-end sector-specific technical labor cost is included in the lower-end cost estimates in Exhibit D-4.

3. Managerial and clerical wages are based on the May 2011 National Industry-Specific Occupational Employment and Wage 

Estimates for NAICS 447000 – Gasoline Stations from the U.S. Bureau of Labor Statistics 

(http://www.bls.gov/oes/2011/may/naics3_447000.htm). For the managerial labor category, EPA uses the standard occupational 

category (SOC) code for all management occupations (11-0000) to capture all types of managers that may work at gas stations 

(e.g., chief executives, marketing managers, food service managers). For the clerical labor category, EPA uses SOC code 43-

9061 (general office clerks).

4. Overhead factor comes from Office of Management and Budget Circular A-76, p. D-7.

5. Fringe benefits factor comes from Bureau of Labor Services Employer Costs for Employee Compensation, December 2012. 

Table 10: All workers, service-providing industries.

The costs presented in this appendix reflect our central cost estimates. For sensitivity analyses, we 

recalculated costs using the labor rates presented in Exhibits D-3 and D-4. A discussion of these labor 

rates, and the results of the sensitivity analyses can be found in Chapter 3.5 of the main text. 
D-3

Exhibit D-3: Labor Rates Used in Upper Cost Estimates

Labor Category BLS Labor Category1

Labor Rates Before 

Overhead 

(2012 dollars)

Loaded Labor Rate2

(2012 dollars)

Legal SOC 23-1011 - Lawyers $62.74 $100.76

Managerial

Management, professional, and 

related (service industries): 

Management, business, and 

financial

$58.72 $92.39

Technical Professional and technical services $44.70 $70.33

Clerical Office and administrative support $25.46 $40.06

Technical for operability tests Professional and technical services $44.70 $70.33

OMB overhead3

12%

BLS fringe benefits4

28.82%

Notes:

1. Upper Estimate relies on BLS Employer Costs For Employee Compensation, December 2012 for Managerial (Table 9, 

Management, Professional, and Related); Technical and Technical for operability testing (Table 10, Professional and 

Technical Services (Service Industries)); and Clerical (Table 11, Office and Administrative Support); and BLS National 

Occupational Employment and Wages, May 2011 for Legal (23-1011 Lawyers).

http://www.bls.gov/news.release/archives/ecec_03122013.pdf

2. Rates are calculated according to (1 + benefits and overhead rate)*(labor rate).

3. Overhead factor comes from Office of Management and Budget Circular A-76, p. D-7. Fringe benefits factor comes from 

Bureau of Labor Services Employer Costs for Employee Compensation, December 2012. Table 10: All workers, serviceproviding industries.

4. Overhead factor comes from Office of Management and Budget Circular A-756, p. D-7.

5. Fringe benefits factor comes from Bureau of Labor Services Employer Costs for Employee Compensation, December 

2012. Table 10: All workers, service-providing industries.

Exhibit D-4: Labor Rates Used in Lower Cost Estimates

Labor Category BLS Labor Category1

Labor Rates Before 

Overhead and Benefits

(2012 dollars)

Loaded BLS Labor Rate2

(2012 dollars)

Legal 23-1011 $62.74 $89.09

Managerial 41-1011 $16.53 $23.26

Technical 53-1021 $18.01 $26.80

Clerical 53-6031 $9.80 $13.70

Technical for operability tests 49-2094 $25.20 $35.17

OMB overhead3

12%

BLS fringe benefits4

25.06%

Notes:

1. Lower Estimate relies on BLS Industry-Specific Occupational Employment and Wages, NAICS 447000 - Gasoline 

Stations, May 2011 for: Managerial (41-1011 First-Line Supervisors/Managers of Retail Sales Workers): Technical (53-1021 

First-Line Supervisors/Managers of Helpers, Laborers, and Material Movers, Hand); Clerical (53-6031 Service Station 

Attendants); and BLS National Occupational Employment and Wages, May 2011 for Technical for operability testing (49-

2094 Electrical and Electronics Repairers, Commercial and Industrial Equipment) and Legal (23-1011 Lawyers). Benefits 

rate is 25.1 percent of wages, as reported in BLS Employer Costs for Employee Compensation, December 2012. Table 10: 

Trade, transportation, and utilities - retail trade. Assumes that service station attendants perform walkthrough inspections.

2. Rates are calculated according to (labor rate)*(1/(1-benefits factor))*(1+overhead factor).

3. Overhead factor comes from Office of Management and Budget Circular A-76, p. D-7.

4. Benefits rate is 25.06 percent of wages, as reported in BLS Employer Costs for Employee Compensation, December 2012. 

Table 10: Trade, transportation, and utilities - retail trade.
D-4

D.3 Time Value of Money Costs

Time Value of Money (“TVM”) costs are indirect costs to owners and operators that arise as a 

consequence of the final regulation. These costs arise because as more frequent testing of equipment leads 

to earlier identification and correction of problems related to UST systems, owners and operators incur

costs earlier than they would in the absence of the rule.4In the near term, requirements such as operability 

tests of release detection methods are likely to identify equipment issues (i.e., technical problems that may 

or may not already have leaks associated with them) that would not have been identified in baseline 

activities in the same time frame.

5

As an initial step toward estimating these costs, EPA used the model presented in Exhibit D-5. When a 

test detects a problem, equipment can be replaced or repaired; when a test does not detect a problem, the 

owner or operator does not incur any costs. It is clear that these costs depend on the proportion of the time

that each test or walkthrough inspection detects a problem. For each part of the final regulation that 

requires a test, EPA calculates a weighted-average expected cost that accounts for the types of equipment 

tested. These weighted-average costs are assumed to reflect the expected annual costs of equipment repair 

or replacement associated with each test; that is, they reflect the costs that an owner or operator would 

incur after operating their equipment for one year. We further assume that these costs scale linearly over 

time: if a test occurs every three years instead of annually, we assume that the repairs and replacements

identified by testing every three years will cost three times more than those identified by annual tests.6

Exhibit D-5: Calculation of Weighted-Average Cost of Repairs and Replacement per Test

After obtaining an expected cost for the repairs and replacements required per test, we calculate the 

expected costs for repairs and replacements under the baseline and the final regulation. We assume that 

 

4 Note that this is also true for the walkthrough inspections being required as part of the regulation.

5 Baseline activities include periodic regulatory inspections, and other requirements that exist before the 

final regulation becomes effective. These activities also include anything that owners and operators might do in the 

absence of the regulation.

6 The underlying assumption of linear growth for the equipment damage function is that wear-and-tear of 

capital equipment accrues at a constant rate over time. We assume this form for the damage function for analytical 

convenience.

Test Equipment

No cost Repair Cost Replacement Cost

Pass Test Fail Test
D-5

testing under the final regulation will identify any equipment in disrepair with absolute certainty, i.e., 

every test performed under the final regulation identifies issues with 100 percent probability. In the 

baseline, we assume that baseline activities do not identify all issues that require repair or replacement. As 

a consequence, owners and operators enjoy a benefit under the baseline: a problem not identified in the 

baseline can be addressed farther in the future, which allows the owner or operator to employ those funds 

in some other manner.

To calculate the cost of repairs and replacements under the baseline, we assume that baseline activities

succeed in identifying issues a percent of the time per year; they fail to do so with b = 1- a probability. 

Such a setup is commonly known as a binomial or Bernoulli experiment and is described by a binomial 

distribution. In these types of problems, only two outcomes (referred to as “successes” and “failures”) are 

possible. In this case, success implies that a problem is detected, while failure implies that a problem is 

not detected.

Since we assume that testing under the final regulation always identifies all issues and that costs 

accumulate over time, the outcome is certain: every test causes the owner or operator to incur the 

weighted-average cost of repairs or replacement associated with that test. For example, if we calculate a

weighted-average cost of repair or replacement of $100 cost per annual test for a hypothetical 

requirement, each annual test under the final regulation will generate $100 in cost.

Under the baseline, existing activities lead to a chance of catching issues every year that is less than 100 

percent. Suppose that baseline activities detect problems with probability of a = 60 percent. We can 

describe the expected cost under the baseline as the sum of the following infinite series:

 Year 1: the odds that existing issues are identified are Pr(detection) = 0.60. Since the total cost of 

repairs and replacements is $100, the expected cost in year one is $60 = 0.60 x $100.

 Year 2: the odds of detection are Pr(not detecting problems in the first year) x Pr(detection in 

second year) = 0.40 x 0.60 = 24 percent. Since the total cost of repairs and replacements is $100, 

we obtain $24 = 0.24 x $100. However, because the cost is delayed by one year, we must also 

discount this amount by the prevailing rate to reflect the opportunity cost of funds (i.e., the time 

value of money). If we assume a discount rate of seven percent, the expected cost in year two is 

$22.43 = $24/(1.07).

 Year 3: the odds of detection are Pr(not detecting in the first year) x Pr(not detecting in second 

year) x Pr(detection in third year) = 0.40 x 0.40 x 0.60 = 10 percent. Again, since the total cost of 

repairs and replacements is $100, we obtain $10 = 0.10 x $100. However, because the cost is 

delayed by two years, we must also discount this amount to reflect the time value of money. 

Again assuming a discount rate of seven percent, the expected cost in year three is $10 = 

$10/(1.07)2.

We repeat this calculation for a number of years large enough such that approximately 100 percent of the 

probability of detection and its associated costs are captured. In this example, the cumulative probability 

of detection is close to 100% after only the sixth period, i.e., baseline activities will virtually always 

identify the issues by the sixth year. Exhibit D-6 illustrates the calculation of the probabilities for the 

example described above.
D-6

Exhibit D-6: Annual and Cumulative Probability of Detecting Issues under the Baseline

a = Pr(detection) 60%

b = Pr(no detection) 40%

Period

Pr(detection) in current 

period Annual Pr(detection) Cumulative Pr(detection)

1 A 60% 60%

2 a x b 24% 84%

3 a x b x b 10% 94%

4 a x b x b x b 4% 97%

5 a x b x b x b x b 2% 99%

6 a x b x b x b x b x b 1% 100%

We combine the annual probabilities of detection with the discounted cost of repair or replacement to 

obtain the expected weighted-average baseline repair or replacement cost. This cost incorporates both the 

expected cost per year and the discounting of costs that occur in the future, as shown in Exhibit D-7. The 

bottom line represents the sum of the present value of the cash flows expected under baseline activities. In 

this example, actions performed under the baseline have an expected cost of $95.56. This outcome is, of 

course, dependent on the cost of $100 per test and 60 percent probability of identifying problems.

Exhibit D-7: Expected Cost per Baseline Inspection

Period Annual Pr(detection)

PV cost

($100, 7% discount)

Expected cost 

per year

1 60% $100.00 $60.00 

2 24% $93.46 $22.43 

3 10% $87.34 $8.39 

4 4% $81.63 $3.13 

5 2% $76.29 $1.17 

6 1% $71.30 $0.44 

Expected cost per inspection

(sum of expected costs in each year) $95.56 

Given that a test under the final regulation would produce a cost of $100, the difference of $4.44 

represents an incremental cost of the final regulation over the baseline, and is referred to as the “time 

value of money” (TVM) cost. 

Note that this calculation is particularly dependent upon the probability of detection: the lower the 

probability, the larger the proportion of costs that occur in the future and the lower the expected cost

under the baseline. Exhibit D-8 illustrates the sensitivity of the above results to changes in the probability 

of detection under the baseline. In general, for probabilities of detection above 40 percent, a small change 

in probability of detection produces a relatively small change in TVM costs. For probabilities below 40 

percent, marginal changes become larger as the probability of detection approaches zero. 
D-7

Exhibit D-8: Change in Expected Cost as a Function of Probability of Detection

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Probability of detecting an issue

Cost

Expected Cost Incremental Cost

EPA assumes the following for the number of years to identify a problem in the baseline:

 For walkthrough inspections, operability testing for vapor monitoring, and operability testing for 

groundwater monitoring, baseline activities would identify all issues in, at most, three years. This 

implies annual probability of successfully identifying issues of 83 percent.7

 For overfill operability inspections, baseline activities would identify all issues in, at most, eight 

years. This implies annual probability of successfully identifying issues of 49 percent.8

 For spill prevention equipment testing and containment sump testing, baseline activities would 

identify all issues in, at most, 6 years. This implies annual probability of successfully identifying 

issues of 59 percent.9

 

7 We selected the lowest probability of detection that would guarantee that 99.5 percent of problems would 

be identified by the third year to satisfy the condition that all problems are found by that time. If we use 99 percent 

as the threshold for “all issues,” a probability of detection of 79 percent is sufficient. In general, lowering the 

threshold increases TVM costs. The overall impact of TVM costs on the total cost of the rule depends on the choice 

of threshold, the expected cost per test, and the number of years until all issues are found.

8

If we use 99 percent as the threshold for “all issues,” a probability of detection of 44 percent is sufficient

to identify the time frame for finding all problems.

9

If we use 99 percent as the threshold for “all issues,” a probability of detection of 54 percent is sufficient

to identify the time frame for finding all problems.
D-8

 For operability testing of ATGs and interstitial monitoring, baseline activities would identify all 

issues, in, at most, 12 years. (Based on assumptions of three percent of all potentially-affected 

systems upgrading software every year, five percent installing new tanks every year, and eight 

percent interacting with an ATG or interstitial monitoring component in some way every year, an 

UST system would only go as long as 12 years without having any issues discovered). This 

implies annual probability of successfully identifying issues of 36 percent.10

D.4 Calculation of Constant Annual Cash Flows for Requirements with Variable Affected 

Universes

Certain regulatory changes, including regulations related to flow restrictors for new tanks and secondary 

containment, differ from other requirements in that they apply only to new or replaced systems rather than 

existing systems. This introduces two dynamic elements into the calculation. First, the annual payment of 

costs associated with these changes increases with each additional year that the final regulation is in effect 

because additional operators become subject to them as prior operators continue to make payments.

11

Second, because a discount rate is in effect, the first units subject to these requirements also experience 

the highest (i.e., least discounted) costs (and most immediate cost savings). These characteristics cause 

the costs and avoided releases associated with these regulatory changes to change over time.

To obtain a constant measure of the costs and benefits associated with changes that involve affected 

population of changing sizes, EPA proceeded as follows:12

 Assuming an average life of 20 years for an UST system, turnover is approximately five percent 

annually. The analysis assumes that new installations and replacements are covered under this 

rate of turnover, and the affected universe thus grows at a constant increment each year. A 

turnover rate of five percent also implies that the universe will have been completely replaced by 

year 20, such that all systems that could be affected by the regulatory change will be subject to it 

by that time. After year 20, the affected universe will be constant, as will be the associated costs 

and positive impacts; however, we do not assess costs in perpetuity, instead accounting only for 

costs over the initial 20-year horizon.

 EPA assembled 20-year schedules of costs and benefits that reflect the growth of each affected 

universe. For each year, the analysis calculates the present value of cash flows based on the 

system cost or avoided cost due to compliance. The present values of the cash flows are summed

to obtain the total benefit over 20 years. This sum of cash flows is annualized into constant cash 

flows over a 20 year period, which creates an adjusted unit cost of compliance that distributes the 

effect of the phase-in of costs and benefits uniformly over the affected universe.

These constant cash flows are used as the basis for the cost and avoided cost calculations presented in 

Chapters 3 and 4 of this RIA. Along with these values, EPA relies on the ultimately-affected universe 

(i.e., the universe affected at year 20) when calculating total costs or benefits associated with the final 

regulation. Exhibit D-9 shows an example calculation, including the nominal values of cash flows at each 

period. In the example, assuming a turnover rate of five percent per year, 64,439 systems (over 20 years) 

 

10 If we use 99 percent as the threshold for “all issues,” a probability of detection of 32 percent is sufficient

to identify the time frame for finding all problems.

11 EPA assumes that this phase-in period will last 20 years, the average life of a UST system. Note that 

cost-savings associated with avoided releases follow the same pattern of growth as the population of system 

upgrades.

12 While the example that follows relies on a 20-year time horizon, EPA also uses other time horizons 

where appropriate, e.g., five years to phase out groundwater and vapor monitoring as release detection methods

under Alternative 1.
D-9

will be subject to the requirement that flow restrictors in vent lines will be eliminated as overfill 

prevention. Before adjusting for growth in the affected universe, the cost of compliance is $945, or $89.18 

per year when amortized at a seven percent discount rate over 20 years (see “Eliminate Flow Restrictors 

for in Vent Lines as Overfill Prevention for All New Tanks” below for details). After accounting for 

changes in the size of the universe and greater discounting for future costs, the annual cost of the

requirement falls to $39.68.

Exhibit D-9: Example Calculation of Constant Annual Unit Costs, Overfill Protection for New 

Units

Cumulative number of 

tanks affected Year Nominal value at year PV at year 1

3,322 1 $287,344 $287,344

6,444 2 $574,688 $537,092

9,666 3 $862,033 $752,933

12,888 4 $1,149,377 $938,234

16,110 5 $1,436,721 $1,096,068

19,332 6 $1,724,065 $1,229,235

22,554 7 $2,011,409 $1,340,287

25,776 8 $2,298,754 $1,431,548

28,988 9 $2,586,098 $1,505,132

32,220 10 $2,873,442 $1,562,962

35,441 11 $3,160,786 $1,606,783

38,663 12 $3,448,130 $1,638,182

41,885 13 $3,735,474 $1,658,595

45,107 14 $4,022,819 $1,669,327

48,329 15 $4,310,163 $1,671,555

51,551 16 $4,597,507 $1,666,348

54,773 17 $4,884,851 $1,654,668

57,995 18 $5,172,195 $1,637,385

61,217 19 $5,459,540 $1,615,281

64,439 20 $5,746,884 $1,589,061

Total cost $27,088,019

Annualized cost $2,556,917

Annualized cost per 

system $39.68

Notes:

1. EPA assumes that the entire affected universe will be affected after 20 years. In this example, 13 percent of 

495,685 tanks in unregulated states will have to eventually install another overfill protection device.

2. Unit cost before adjusting for phase-in effects is $83.63.

As noted in Exhibit 2-4 in Chapter 2, EPA uses the affected universe in the tenth year to represent a 

central tendency for the cost of requirements such as these. 

We note that this approach does not capture two significant factors. First, it assumes that current declining 

trends in the number of UST facilities do not continue and the universe size remains constant. If the 

approach incorporated trends of declining numbers of UST systems, it would commensurately decrease 

the costs and positive impacts for each regulatory change. Second, this approach does not consider the 

possibility that new technologies may reduce compliance costs while achieving equal or greater positive 

impacts. For example, problems related to steel tanks are less frequent today partly because owners and 

operators have switched to materials such as fiberglass. It is possible that similar shifts could occur in 

relation to flow restrictors and secondary containment, leading to substantially lower compliance costs.
D-10

D.5 Costs for Individual Regulatory Requirements

Estimates of costs for individual regulatory requirements are based on publicly available data on 

equipment, installation, and testing costs, and information collected from professionals in industries that 

provide relevant equipment and services. To the best of its ability, where data are limited or not available, 

EPA uses its professional expertise and judgment to make assumptions for cost modeling purposes.

D.5.1 Release Prevention 

Walkthrough Inspections 

Exhibit D-10 summarizes the items EPA expects to be covered by the walkthrough inspection. Based on 

Exhibit D-10, we estimate the per-unit cost of a walkthrough inspection to be 25 minutes (0.42 hours) of 

technical labor, or $15.07 (2012$), plus recordkeeping. We apply this cost on a per-facility basis for all 

facilities. Recordkeeping costs include 0.1 hour of clerical labor costs, or $1.81 (2012$) and $0.11 in 

material costs (based on 2007 OUST ICR for maintaining records, inflated to 2012$).

Exhibit D-10: Minimum Walkthrough Inspection to be Conducted by Owner/Operator (Based on 

the PEI RP900)

Category Description Time

Tank Fill Area All items listed under Tank Fill Area on the Daily checklist (p. 42) 10 minutes

Release Detection

Items listed under Leak Detection Recordkeeping on the Monthly checklist (p. 43). PEI 

estimates it would take 51 minutes to complete all items under this section. EPA takes 

this total, and based on the seven release detection methods listed, estimates that it would 

take 7.3 minutes per method to complete the items listed for the method. EPA then 

multiplies this by two to assume that the walkthrough would cover one tank and one pipe. 15 minutes

Total: 25 minutes

Note: The time estimates shown above are based on information provided by PEI and assumes a four-tank installation (i.e., 4 

tanks, fill ports, spill buckets, overfill devices and tanks sumps) and four dispensers. Since the walkthrough inspections 

primarily focus on sumps and dispensers, EPA believes that on average, these estimates provide a reasonable indication of the 

amount of time it would take to inspect a facility (a typical facility is likely to have more than four dispensers, but less than four 

sumps).

The TVM cost for walkthrough inspections assumes that 10 percent of all walkthrough inspections will 

encounter a problem in one of the dispensers, sumps, gauges, piping alarms, or other equipment. On 

average, EPA assumes that this repair will cost $107 ($100 in 2008$ inflated to 2012$). We estimate that 

this repair cost would have been incurred within three years without this requirement. The weightedaverage cost of repairs and replacements is $11, and the incremental annual TVM cost between the 

proposed rulemaking and the baseline is $0.14. 

Under Alternative 1, the final rule requires a walkthrough inspection that involves checking all of the 

categories listed in Exhibit D-10. We estimate the per-unit cost of this type of inspection to be 50 minutes 

of technical labor, rather than 25 minutes, or $30.14 (2012$), plus recordkeeping.

Overfill Prevention Equipment Inspections

The unit costs associated with requiring an overfill prevention equipment inspection include the cost of 

conducting the inspection, plus recordkeeping. We estimate the average cost of conducting an overfill 

equipment inspection at $228.91 ($214 in 2008$ inflated to 2012$) per tank (TDD No. 21 – Overfill 

Testing). Recordkeeping costs include 0.1 hours of clerical labor costs, or $1.81 (2012$), and $0.11 in 
D-11

material costs at a facility level (based on 2007 OUST ICR for maintaining records inflated to 2012$), for 

a total of $0.71 per system.

The TVM cost for an overfill prevention equipment inspection assumes that across all overfill 

components (alarms, flow restrictors, and automatic shutoff devices), about 21 percent of all overfill 

prevention equipment inspections will encounter a problem (21 percent of alarms, 19 percent of flow 

restrictors, and 24 percent of automatic shutoff devices will encounter a problem when tested; roughly 

15.5 percent of overfills use alarms, and 42.3 percent of overfills each use flow restrictors and automatic 

shutoff devices). The analysis assumes that 10 percent of overfills will be repaired, at a cost of $107 

($100 in 2008$ inflated to 2012$), and 90 percent of overfills will be replaced, at a cost of $1,931 (the 

weighted average cost of replacement of the overfill components). We assume that in the baseline (i.e., 

without this regulatory requirement), a problem with the overfill prevention equipment will be detected 

within eight years. The weighted-average cost of repairs and replacements is $375, which implies an 

incremental TVM cost of $23.88 per year. Because testing occurs on a three-year basis under the Selected 

Option, we use the present value of three years’ worth of this cost, which equals $67.07 at a seven percent 

discount rate.

Spill Prevention Equipment Tests

The unit costs associated with requiring spill prevention equipment tests include the cost of conducting 

the test, water disposal costs associated with testing, and recordkeeping. We estimate the average cost of 

conducting tightness testing on spill buckets by vacuum at $133.30 per spill bucket ($125 in 2008$ 

inflated to 2012$). Recordkeeping costs include 0.1 hours of clerical labor costs, or $1.81 (2012$), and 

$0.11 in material costs (based on 2007 OUST ICR for maintaining records inflated to 2012$) at a facility 

level, for a total of $0.71 per system. 

We estimate water disposal costs associated with testing at $4.38 per spill bucket, based on a total facility 

water disposal service cost of $700, where three spill buckets contribute 45 gallons of disposed water out 

of a total of 600 gallons for the facility (7.5 percent).13 This entails $52.50 in total spill bucket costs for 

water disposal, or $17.50 per spill bucket. However, we also assume that only half of all spill buckets 

undergo hydrostatic testing, and that of those, only half of the hydrostatic tests require the owner/operator 

to dispose of water independently. Correspondingly, per-spill bucket costs are $4.38, or $17.50 * 0.5 * 

0.5.

The TVM cost for spill prevention equipment test assumes that across the country, approximately 16 

percent of all spill prevention equipment tests will encounter a problem. This is a weighted average of the 

13 percent chance to encounter a problem during such a test in states that already require tightness testing 

of spill prevention equipment and the 30 percent chance to encounter a problem during such a test in 

states that do not currently require such testing. The analysis assumes that 10 percent of spill prevention 

equipment will be repaired, at a cost of $507 ($475 in 2008$ inflated to 2012$), and 90 percent will be 

replaced, at a cost of $2,133 ($2000 in 2008$ inflated to 2012$). We estimate that these costs would have 

been incurred within six years without this requirement, but are incurred immediately as a result of the 

final regulation. The weighted-average cost of repairs and replacements is $307.34, which implies an 

annual TVM cost of $13.36. Because testing occurs on a three-year basis under the Selected Option, we 

use the present value of three years’ worth of this cost, which equals $37.53 at a seven percent discount 

rate.

 

13 Estimate of water disposal cost and volumes provided by Ed Kubinsky, Crompco.
D-12

Containment Sump Testing

The per-unit costs associated with requiring containment sump tests include the cost of conducting the 

test, water disposal costs associated with testing, and recordkeeping. Given the standard UST system 

configuration, tanks have three total sumps: two dispenser sumps, and one tank-top sump. We estimate 

average cost of conducting an interstitial integrity test on a tank-top sump at $209.25 (2012$). We then 

estimate the average cost of conducting a tightness test on a dispenser sump at $140.30 (2012$). (These 

costs are based on E2Inc., TO 3003, TD #9; and SC-05 State Periodic Interstitial Testing Requirements.) 

Correspondingly, total sump testing costs are $489.85 (2012$), based on one tank-top sump and two 

dispenser sumps tested.

We estimate water disposal costs associated with testing at $97.50 per sump, based on a total facility 

water disposal service cost of $700, where seven sumps contribute 585 gallons of disposed water out of a 

total of 600 gallons for the facility (97.5 percent). This entails $682.50 in total sump costs for water 

disposal, or $97.50 per sump. However, we also assume that only half of the hydrostatic tests require the 

owner/operator to dispose of water independently. Correspondingly, average per-sump costs for water 

disposal are $48.75, or $97.50 * 0.5.

Recordkeeping costs include 0.1 hours of clerical labor costs, or $1.81 (2012$), and $0.11 in material 

costs (based on 2007 OUST ICR for maintaining records, inflated to 2012$), for a total of $0.71 per 

system. 

The TVM cost of containment sump tests assumes that approximately 25 percent of all tests involving the 

turbine sump will encounter a problem, and that 21 percent of all tests on dispensers will encounter a 

problem. The analysis assumes that 75 percent of turbine sumps and dispensers will require a repair; the 

rest will require replacement. Replacement costs are assumed to be $3,199 ($3,000 in 2008$ inflated to 

2012$) for turbine sumps, and $2,132 ($2,000 in 2008$ inflated to 2012$) for dispensers; repair costs are 

assumed $720 ($675 in 2008$ inflated to 2012$) for turbine sumps, and $480 ($450 in 2008$ inflated to 

2012$) for dispensers. This yields a total weighted average of $287 for repairs and $425 for replacement. 

We estimate that the repair/replacement costs would be incurred within six years without this requirement 

but immediately under each test under the final regulation. The weighted-average cost of repairs and 

replacements is approximately $712, or $30.97 per year. Because testing occurs on a three-year basis 

under the Selected Option, we use the present value of three years’ worth of this cost, which equals

$86.97 at a seven percent discount rate.

Spill Prevention Equipment Test After Repair

Because a spill prevention equipment test after repair would necessitate a trip to the facility by the

contractor conducting the test, we assume that the owner/operator would incur a minimum site cost from 

the contractor, which includes the cost of the spill prevention equipment test. Unlike the spill prevention 

equipment test mentioned above (which we assume is scheduled and takes place as contractors conduct 

other on-site activities), we assume that this activity is unscheduled and involves only the site visit and 

the test.

We estimate minimum site costs of $358.33 (2012$), based on an average of minimum site costs of $300-

$400, $250-$300, and $450.14 In addition, we add the water disposal costs for spill buckets from the spill 

prevention equipment test section above ($4.38 per spill bucket), as well as recordkeeping ($0.71 per UST 

system), for a total test cost of $363.42 (2012$).

 

14 Based on information provided by Crompco, Tanknology, and Tait.
D-13

Overfill Prevention Equipment Inspection After Repair

Because an overfill prevention equipment inspection after repair would necessitate a trip to the facility by 

the contractor conducting the test, we assume that the owner/operator would incur a minimum site cost 

from the contractor, which includes the cost of the overfill prevention equipment inspection. Unlike the 

overfill prevention equipment inspection mentioned above, (which we assume is scheduled and takes 

place as contractors conduct other on-site activities), we assume that this activity is unscheduled and 

involves only the site visit and the test.

We estimate minimum site costs of $400 (2012$), based on an average of minimum site costs of $300-

$400 and $450. In addition, we add recordkeeping costs, for a total test cost of $400.71 (2012$).15

Secondary Containment Test After Repair

The per-unit costs associated with requiring secondary containment tests include the cost of conducting 

the test, plus recordkeeping. We estimate the average cost of conducting a secondary containment test on

a tank at $156.59 (2012$) per tank. We estimate the average cost of conducting a secondary containment

test on piping at $111.49 (2012$) per line. We estimate the average cost of conducting a secondary 

containment test on sumps at $163.28 (2012$) per sump ($489.85 divided by 3). (These costs are based 

on E2 Inc., TO 3003, TD #9; and SC-05 State Periodic Interstitial Testing Requirements.) 

To estimate the cost of a secondary containment test after repair, we first average the cost of the tests for 

piping and sumps; we assume that a secondary containment test of piping will include sumps: ($111.49 +

$163.28)/2 = $146.50. We then weight the costs of the test for tank and the test for piping/sump by the 

frequency of repairs. We assume that on average there would be approximately four piping/sump repairs 

for every tank repair. Therefore, the cost of a secondary containment test after repair is (0.8 * $146.50) + 

(0.2 * $156.59) = $148.52, plus recordkeeping ($0.71). We also add the probability-weighted chance (i.e., 

80 percent) that water disposal costs would be required for testing sumps. We include the cost for water 

disposal associated with one sump test, given that this requirement occurs after repair and does not 

require testing of all sumps. Adding the $48.75 associated with water disposal for one sump brings the 

total cost for this requirement to $188.23 ($148.31 + $0.70 + $48.75 * 0.8).

Eliminate Flow Restrictors for in Vent Lines as Overfill Prevention for All New Tanks and When 

Overfill Devices are Replaced

The cost for this requirement is the incremental cost between what would have been installed (i.e., ball 

float) and the least-cost alternative (i.e., automatic shutoff valve), or $945 ($886 in 2008$ inflated to 

2012$) per tank (= $1,042 - $156 in 2008$, cost of automatic shutoff value less cost of new ball float). 

(Based on E2, Inc., TO3003 TDD7, Table 1) This cost phases in over time and is adjusted as shown in 

Exhibit D-11.

 

15 Based on information provided by Crompco and Tait.
D-14

Exhibit D-11

Adjustment for Phase in: Eliminate Flow Restrictors in Vent Lines as Overfill 

Protection for New and Replaced Tanks

Number of tanks 

affected Year

Nominal value at 

year PV at year 1

7,826 1 $697,910.63 $697,910.63 

15,651 2 $1,395,821.25 $1,304,505.84 

23,477 3 $2,093,731.88 $1,828,746.51 

31,302 4 $2,791,642.51 $2,278,811.85 

39,128 5 $3,489,553.13 $2,662,163.38 

46,953 6 $4,187,463.76 $2,985,603.79 

54,779 7 $4,885,374.39 $3,255,331.23 

62,605 8 $5,583,285.01 $3,476,989.30 

70,430 9 $6,281,195.64 $3,655,713.05 

78,256 10 $6,979,106.27 $3,796,171.39 

86,081 11 $7,677,016.89 $3,902,606.10 

93,907 12 $8,374,927.52 $3,978,867.74 

101,732 13 $9,072,838.15 $4,028,448.64 

109,558 14 $9,770,748.77 $4,054,513.37 

117,384 15 $10,468,659.40 $4,059,926.61 

125,209 16 $11,166,570.03 $4,047,278.86 

133,035 17 $11,864,480.65 $4,018,910.08 

140,860 18 $12,562,391.28 $3,976,931.36 

148,686 19 $13,260,301.91 $3,923,244.85 

156,511 20 $13,958,212.53 $3,859,562.08 

Total $65,792,236.67

PV cost per tank $420.37

Annual cost over 20 

years $39.68

These costs only apply to new tanks that would have installed ball floats (based on PEI estimate of 

percent of new installs over the last three years that use ball floats as overfill protection – see Appendix 

B).

D.5.2 Release Detection

Operability tests

Note: We assume no state currently has this requirement for any of the release detection methods below 

(i.e., all systems in all states will incur costs).

Operability test for ATGs

The cost for the operability test would be the technical labor involved (1.5 hours) in conducting the test, 

or $60.71 (2012$), plus recordkeeping equal to $0.71 (clerical labor of 0.1 hours and materials that cost 

$0.11). 

The time value of money cost of operability testing for ATGs assumes that five percent of all testing of 

probes and 10 percent of all testing of floats identifies a problem. The analysis assumes all ATG probes 

and floats are replaced, with a cost of $1,442 ($1,352 in 2008$ inflated to 2012$) for probes and $181 
D-15

($170 in 2008$ inflated to 2012$) for floats. The average cost of replacement, weighted by the 

probabilities of requiring replacement and the number of each component is $90.22 (each ATG has both 

components). We estimate that this repair cost would have been incurred within 12 years without this 

requirement, but is incurred immediately as a result of the final regulation. This implies an annual TVM 

cost of $9.40.

Operability test for Interstitial Monitoring (IM) Systems

The cost for the operability test would be the technical labor involved (0.25 hours) in conducting the test, 

or $10.12 (2012$), plus recordkeeping equal to $0.71 (clerical labor of 0.1 hours and materials that cost 

$0.11). 

The time value of money cost of operability testing for interstitial monitoring systems assumes that 20 

percent of all testing of liquid point sensors and UDC/sump sensors and seven percent of all testing of 

pressure or vacuum sensors identifies a problem. The analysis assumes that these components are always 

replaced, with a cost of $485 ($455 in 2008$ inflated to 2012$) for the former and $1,066 ($1,000 in 

2008$ inflated to 2012$) for the latter. The average cost of replacement, weighted by the probabilities of 

requiring replacement and the number of existing interstitial monitoring systems with each type of 

component, is $93.41 (86 percent of interstitial monitoring systems use liquid point sensors and 

UDC/sump sensors, 14 percent use pressure or vacuum sensors). We estimate that these costs would have 

been incurred within 12 years without this requirement, but are incurred immediately as a result of the 

final regulation. This implies an annual TVM cost of $9.73.

Operability test for LLDs

The cost for the operability test for a LLD would be the technical labor involved (1.5 hours) in conducting 

the test, or $60.71 (2012$), plus recordkeeping equal to $0.71 (clerical labor of 0.1 hours and materials 

that cost $0.11). 

We assume that in the baseline, all issues would be identified within one year, which is also the schedule 

for LLD operability testing under the requirements of the final regulation. Correspondingly, there are no 

time value of money costs associated with this requirement, as the schedule for identifying issues and 

making repairs or replacements as necessary has not been altered. 

Operability test for Vapor Monitoring Systems

The cost for the operability test for vapor monitoring would be the technical labor involved (0.25 hours) 

in conducting the test, or $10.12 (2012$), plus recordkeeping equal to $0.71 (clerical labor of 0.1 hours 

and materials that cost $0.11). 

The time value of money cost for operability testing of vapor monitoring systems assumes that 20 percent 

of all testing will encounter a problem. All sensors are assumed to be replaced at a cost of $454 ($426 in 

2008$ inflated to 2012$), which implies an expected cost per inspection of $90.86. We estimate that these 

costs would have been incurred within three years without this requirement, but are incurred immediately 

as a result of the final regulation. This implies an annual TVM cost of $1.20.

Operability test for Groundwater Monitoring Systems

The cost for the operability test would be the technical labor involved (0.25 hours) in conducting the test, 

or $10.12 (2012$), plus recordkeeping equal to $0.71 (clerical labor of 0.1 hours and materials that cost 

$0.11). 

The time value of money cost of operability testing for groundwater monitoring systems assumes that 20 

percent of all testing of sensors and 10 percent of all testing of the bailers identifies a problem. The 

analysis assumes that these components are always replaced, with a cost of $454 ($426 in 2008$ inflated 

to 2012$) for the former and $32 ($30 in 2008$ inflated to 2012$) for the latter. The average cost of 

replacement, weighted by the probability of requiring replacement and the number of existing interstitial 
D-16

monitoring systems with each type of component, is $47.03 (half of all groundwater monitoring systems 

use sensors while the other half use bailers). We estimate that these costs would have been incurred 

within three years without this requirement, but are incurred immediately as a result of the proposed 

rulemaking. This implies an annual TVM cost of $0.62.

Vapor and Groundwater Monitoring for Release Detection (Selected Option only)

Under the Selected Option, systems using vapor monitoring may also need to undergo a site assessment 

(under Alternative 2, use of vapor monitoring can continue with annual operability check without the 

owner/operator conducting a site assessment). We assume an average site assessment cost of $1,500

(2012$) per UST system (based on a $1,000 per tank cost from Leak Detection Technology and a $2,000 

per tank cost from the Missouri DNR16), which when annualized over 20 years using a seven percent 

discount rate yields an amortized cost of $141.59. In addition, where necessary, we also apply a well 

verification cost of $500 (2012$) per system (from Leak Detection Technology), leading to an additional 

amortized cost of $47.20. Based on EPA’s estimate of the distribution of systems using vapor monitoring 

and whether site assessments would be required under the final regulation, we estimate that 

approximately 12 percent of systems using vapor monitoring would need to conduct a site assessment, 

and, in addition 15 percent of systems using vapor monitoring would need to conduct well verification. 

Correspondingly, we estimate total additional site assessment/well verification costs at $24.18 per system, 

on average.

Under the Selected Option, systems using groundwater monitoring may also need to undergo a site 

assessment (under Alternative 2, use of groundwater monitoring can continue with annual operability 

check without the owner/operator conducting a site assessment). We assume an average site assessment 

cost of $1,779 (2012$) per UST system (based on a $1,225 per tank cost from the South Carolina DHEC 

and a $2,333 per tank cost from the Missouri DNR17), which when annualized over 20 years using a seven 

percent discount rate yields an amortized cost of $167.94. In addition, where necessary, we also apply a 

well verification cost of $280 (2012$) per system (from Leak Detection Technology), leading to an 

additional amortized cost of $26.43. Based on EPA’s estimate of the distribution of systems using 

groundwater monitoring and whether site assessments would be required under the final regulation, we 

estimate that approximately 13 percent of systems using groundwater monitoring would need to conduct a 

site assessment and, in addition 8 percent of systems using groundwater monitoring would need to 

conduct well verification as well. Correspondingly, we estimate total additional site assessment/well 

verification costs at $24.20 per system, on average.

Elimination of Groundwater Monitoring and Vapor Monitoring as Release Detection Methods

(Alternative 1 only)

The cost to eliminate groundwater monitoring includes the cost of switching to SIR ($27 one-time cost 

plus $16 per month for monthly reconciliation, $25 and $15 in 2008$ inflated to 2012$, respectively) less 

the one-time cost of groundwater monitoring equipment ($517, based on $491, from p.63 in OUST ICR 

1360.12 inflated to 2012$) and $68 in annual costs to record monthly monitoring (1.67 hours of technical 

labor, from p. 63 in OUST ICR 1360.08). This leads to a net cost of approximately $78 (2012$) per 

system ($194 in SIR costs, including SIR equipment costs, less $116 in groundwater monitoring costs, 

including equipment costs). It is the higher monthly reconciliation cost of SIR that causes a net cost when 

groundwater monitoring is eliminated as a release detection option.

 

16 Leak Detection Technology provided an estimate of between $1,000 and $3,000 per three tank site. 

Missouri DNR provided an estimate of $5,000 to $6,000 per three tank site. We divided the $3,000 estimate and the 

$6,000 estimate by three tanks to get a per UST system cost estimate of $1,000 and $2,000, respectively. 

17 South Carolina DHEC provided an estimate of $3,675 per three tank site. Missouri DNR provided an 

estimate of $6,000 to $7,000 per three tank site. We divided the $3,675 estimate and the $7,000 estimate by three 

tanks to get a per UST system cost estimate of $1,225 and $2,333, respectively. 
D-17

The cost of eliminating vapor monitoring includes the cost of switching to SIR ($27 one-time cost plus 

$16 per month for monthly reconciliation, $25 and $15 in 2008$ inflated to 2012$, respectively) less the 

cost of vapor monitoring equipment ($807, from $767 p.63 in OUST ICR 1360.12 inflated to 2012$) and 

$68 in annual costs to record monthly monitoring (1.67 hours of technical labor, from p.63 in OUST ICR 

1360.08). This leads to a net cost of approximately $51 (2012$) per system ($194 in SIR costs, including 

SIR equipment costs, less $144 in vapor monitoring costs, including equipment costs). It is the higher 

monthly reconciliation cost of SIR that causes a net cost when vapor monitoring is eliminated as a release 

detection option.

Because the requirement is phased-in over five years, we also account for the cost of groundwater or 

vapor monitoring operability tests, including TVM costs, but without site assessment/well verification 

costs, as the ability to use these methods for release detection is being eliminated, as described in the 

“Operability test for Vapor Monitoring Systems” and “Operability test for Groundwater Monitoring 

Systems” sections above.

Add SIR/CITLD to Regulations with Performance Criteria

We assume that CITLD users will be able to meet the performance criteria with no additional cost.

Certain SIR users would incur a one-time $11 ($10 in 2008$ inflated to 2012$) cost for a new service 

agreement to switch to a SIR vendor that would be capable of providing quantitative results necessary to 

meet this requirement. 

Require Response to Interstitial Monitoring Alarm 

The cost associated with this requirement would be the incremental cost difference between a tightness 

test ($418, currently required) and an interstitial integrity test ($208), which yields a net savings (based on 

E

2

, Inc., TO 3003, TDD#9, SC-05 State Periodic Interstitial Testing Requirements and OUST ICR 2011, 

p. 52 and p. 59). Because the cost of an interstitial integrity test is less than the cost of a tightness test, we 

do not assign any cost to this requirement. 

Removal of deferrals for Emergency Generator Tanks (EGTs)18

Based on FY2012 data, the total number of active USTs is 577,981. EPA assumes that three percent of 

these tanks, or 17,339, are EGTs. Among these, 10,977 are in states that currently defer release detection 

regulations on this type of UST (and therefore would be affected by the deferral removal).

EPA assumes that one-third of the universe of tanks in states with deferrals in place (the left branch in the 

figure below) already voluntarily employ release detection technologies that are distributed as other 

operability testing requirements. This subset of EGTs accrues only the incremental testing costs 

associated with operability testing. The other two-thirds of the EGT universe in states with deferrals in 

place accrue both the costs to install new release detection equipment (apportioned as 60 percent of the 

universe to SIR and 6.7 percent to ATG) and operability tests.

19 We assume that the proportion of EGTs 

 

18 The final regulation does not address emergency tanks at nuclear power plants, which are regulated by 

the Nuclear Regulatory Commission under 10 CFR Part 50.

19 For modeling purposes, we assume the majority of EGTs would use SIR as the release detection method 

($27, based on a 2008$ cost of $25 inflated to 2012$) because it is the least-cost method. However, EPA assumes 
D-18

that switch to SIR also incur the costs associated with the addition of SIR/CITLD with performance 

criteria. 

Allocation of Costs to the Universe of EGTs

Costs are assigned as follows:

 The cost for the operability test for tanks that already use automatic tank gauge systems would be 

the technical labor involved (1.5 hours) in conducting the test, or $60.71 (2012$), recordkeeping

cost of $0.71, and annual TVM cost of $9.40. We apply this cost to the percentage of tanks that 

currently use ATG as their leak detection method. 

 The cost for the operability test for tanks that already use interstitial monitoring systems would be 

the technical labor involved (0.25 hours) in conducting the test, or $10.12 (2012$), recordkeeping

cost of $0.71, and annual TVM cost of $9.73. We apply this cost to the percentage of tanks that 

currently use IM as their leak detection method. 

 The cost for the operability test for tanks that already use vapor monitoring systems would be the 

technical labor involved (0.25 hours) in conducting the test, or $10.12 (2012$), site 

assessment/well verification cost of $52.87, recordkeeping cost of $0.71, and annual TVM cost of 

$1.20. We apply this cost to the percentage of tanks that currently use vapor monitoring as their 

leak detection method. 

 

that ten percent of EGTs would be in remote locations, and would therefore use ATGs as their release detection 

method.

10,977 EGTs in states with 

deferrals in place

Incur testing costs

identically to other 

operability testing

Incur installation and O&M 

(removal of deferral) and 

operability testing costs

subject to distribution shown 

below.

All percentages refer to the entire affected universe of 10,977 EGTs.

SIR ATG

60% 6.7%

•ATG

•SIR

•Int. monit.

Release detection 

for these tanks are 

assumed to be the 

same as national 

distribution.

33.3%

33.3% 66.7%
D-19

 The cost for the operability test for tanks that already use groundwater monitoring systems would 

be the technical labor involved (0.25 hours) in conducting the test, or $10.12 (2012$), site 

assessment/well verification cost of $60.77, recordkeeping cost of $0.71, and annual TVM cost of 

$0.62. We apply this cost to the percentage of tanks that currently use GW monitoring as their 

leak detection method. 

 We estimate the cost of installing new automatic tank gauge systems at $4,098 ($3,843 in 2008$

inflated to 2012$) (TO3003 TDD #9). We estimate the annual monitoring costs associated with 

these systems at $285.72 per unit, based on monthly monitoring requiring 0.05 hours of technical 

labor, and daily inventory volume measurements requiring 0.02 hours of technical labor.

 We estimate the cost of installing new SIR systems at $27 ($25 in 2008$ inflated to 2012$). We 

estimate the annual monitoring costs associated with SIR at $192 ($180 in 2008$ inflated to 

2012$). 

 Current qualitative SIR users would incur a one-time $11 ($10 in 2008$ inflated to 2012$) cost 

for a new service agreement to switch to a SIR vendor capable of providing quantitative results. 

 EGTs will also be required to perform annual line tightness tests (1.5 hours of technical labor 

every three years) and maintain associated records (1 hour of clerical labor annually) (based on 

OUST’s ICR 1360.08,) for a total cost of $45.25 (2012$).

The foregoing requirements affect various subsets of the universe, many of which do not overlap. For 

example, systems are generally subject to only one operability test requirement, and relatively few 

systems will be required to install an ATG. If we sum the bulleted costs without accounting for the 

universe affected, we significantly overstate the cost per EGT system. We thus estimate the unit cost of 

this group of requirements by dividing the total cost of the affected universe by the total universe of units 

affected. Doing so produces an average one-time cost per system of $296.94 and average O&M cost per 

system of $193.41.

D.5.3 Other

Notification of Ownership Changes

The cost associated with this requirement is the managerial labor (0.25 hours), or $14.27 (2012$),

required to notify the implementing agency (based on OUST ICR 1360.12). Only facilities that change 

ownership will incur the cost.

Closure of Irreparable Lined Tanks

The cost associated with this requirement is the incremental cost between what an owner/operator would 

be able to do instead of replacement (i.e., switch to cathodic protection) and what the owner/operator 

needs to do as a result of the requirement (i.e., close the tank, and replace with a double-walled tank).

20

We assume that this requirement will cause owners or operators to replace their systems, on average, 10 

years earlier (i.e. incur costs over years one through 20, rather than years 10 through 30, following the 

final regulation’s implementation). Incremental costs are $85,026 [$92,544 (based on $81,260 2008$

inflated to 2012$) to install a double-walled system minus $7,518 (2008$ inflated to 2012$) for the cost 

of switching to cathodic protection, based on SC-03 UST Cost Comparison and EPA professional 

judgment]. The difference between these two streams of discounted cash flows (i.e., cash flows for years 

one to 20 and cash flows from years 10 to 30) is $41,803.

 

20 EPA assumes that the owner/operator will choose to continue operations by installing a new doublewalled tank instead of closing the tank and discontinuing operations.
D-20

Recordkeeping Associated with Compatibility

For existing UST systems, owners and operators must use an UST system made of or lined with materials 

compatible with the fuel stored. In order to do this, owners and operators must have existing records 

indicating what equipment has already been installed, and that equipment is compatible with fuel blends 

greater than E10 and/or B20 (or any other regulated substance identified by the implementing agency). 

EPA assumes that a portion of existing owners of UST systems would have adequate installation records

(see Appendix B). EPA also assumes each owner would maintain records and demonstrate compatibility 

on a per UST system basis. The cost associated with this is a one-time cost of $1.92 (2012$), plus $0.01 

to permanently store the record (based on OUST ICR 1360.12), annualized over 20 years using a seven 

percent discount rate.

Under the final regulation, owners and operators will also need to notify the implementing agency at least 

30 days prior to switching to store fuel blends greater than E10 and/or B20 (or any other regulated 

substance identified by the implementing agency). However, because owners and operators have a choice 

about whether to store these substances and there is a lack of information as to how many owners and 

operators would choose to switch each year, EPA does not include an estimate of this reporting cost in the 

analysis. 

Under Alternative 1 only, owners and operators must maintain retain equipment records for all new and 

replaced equipment. All records must be maintained for the life of the equipment. This recordkeeping cost 

is $1.92 (2012$) per record (“Maintain records,” under “UST systems: design, construction, installation 

and notification,” p. 61, OUST ICR 1360.08), plus $0.01 to permanently store the record. EPA assumes 

that all owners and operators will incur this cost annually as part of annual maintenance and replacement 

of UST system components.

Removal of deferrals for Airport Hydrant Fuel Distribution Systems (AHFDSs)

For details on how costs are estimated for AHFDSs, see Appendix A. The unit costs presented in Exhibit 

3-1 and Exhibit 3-4 are derived from taking the total costs associated with removing the deferral and 

dividing them by the number of systems that would be affected by the proposed rule.

Removal of deferrals for UST systems with Field-Constructed Tanks (FCTs)

For details on how costs are estimated for FCTs, see Appendix A. The unit costs presented in Exhibit 3-1 

and Exhibit 3-4 are derived from taking the total costs associated with removing the deferral and dividing 

them by the number of systems that would be affected by the proposed rule.

D.5.4 Energy Policy Act (Indian country only)

Operator Training

We model this requirement only for facilities located in Indian country. EPA assumes that there is 1 Class 

A operator and 1 Class B operator for every 5 facilities, and 3 Class C operators per facility. 

The costs for operator training includes one-time costs associated with training all existing operators, and 

annual costs associated with retraining as a result of operator turnover. 

One-time costs: 

For Class A and B operators, we assume 20 percent of these operators test out. The costs for these

operators consist of the fee to take the test and the time it takes to take the test, or $29.92 for Class A 

operators and $23.65 for Class B operators ($64 test fee based on average test of $60, based on example 
D-21

test costs of $45 and $75 in 2008$, inflated to 2012$ plus 1.5 hours of test time, based on California’s test 

length). The other 80 percent are required to take training. In the model, this consists of taking a online 

webinar and then paying for a final exam, or $600.79 for Class A operators and $433.51 for Class B 

operators ($180 test fee based on $169 in 2008$ inflated to 2012$ + 10 hours of webinar and test time, 

based on Colorado’s training webinar cost).

For Class C operators, we assume all of them will be trained by Class A/B operators. For modeling 

purposes, we assume the trainer to be a Class B operator because of the slightly lower labor rate. We 

calculate costs to be $84.15, or one hour for a Class B operator and one hour for each of three Class C 

operators. The total one-time cost comes to $301.73 (2012$) plus $1.92 (2012$) of recordkeeping 

(clerical labor of 0.1 hours and materials that cost $0.11).

Recurring cost:

Each year, we assume that Class A and Class B operators will turnover at an average rate of 22 percent. 

The same assumption of 20 percent testing out and 80 percent taking training applies. We assume Class C 

operators turnover at an average rate of 119.5 percent. We assume they are trained by Class A or B 

operators. We calculate total retraining costs at $137.44 (2012$) given the above assumptions, plus $1.92

(2012$) of recordkeeping (clerical labor of 0.1 hours and materials that cost $0.11).

Require Secondary Containment of new/replaced tanks and piping 

We model this only for facilities in Indian country. The cost associated with this requirement would be 

the incremental cost difference between the installation of a single-walled tank ($72,102 in 2006$) and 

piping and the installation of a double-walled tank and piping ($88,707 in 2006$), or $16,605.17 (2006 $) 

(the cost of installing a double-walled tank and piping less the cost of installing a single-walled tank and 

piping, from SC-03 UST Cost Comparison, Table 1), or $18,910.95 in 2012$. Because the universe 

affected by this facility grows over time due to equipment turnover, we amortize this cost over 20 years at 

a seven percent discount rate and incorporate the growing universe to obtain a more accurate estimate of 

costs.

EPA data indicate that approximately 72.4 percent of tanks in Indian Country are single-walled. As a

result, EPA assumes that 1,895 of the 2,618 total tanks in Indian Country will be affected by this 

regulation after 20 years for modeling purposes. This implies that about 95 tanks will be replaced each 

year.
D-22

This cost phases in over time and is adjusted as shown in Exhibit D-16.

Exhibit D-16

Require Secondary Containment of new/replaced tanks and piping

Number of tanks 

affected Year

Nominal PV at 

year PV at year 1

95 1 $169,173 $169,173

190 2 $338,346 $316,211

284 3 $507,519 $443,287

379 4 $676,692 $552,382

474 5 $845,865 $645,306

569 6 $1,015,038 $723,708

663 7 $1,184,211 $789,090

758 8 $1,353,384 $842,819

853 9 $1,522,556 $886,142

948 10 $1,691,729 $920,189

1042 11 $1,860,902 $945,988

1137 12 $2,030,075 $964,474

1232 13 $2,199,248 $976,493

1327 14 $2,368,421 $982,810

1422 15 $2,537,594 $984,123

1516 16 $2,706,767 $981,057

1611 17 $2,875,940 $974,180

1706 18 $3,045,113 $964,005

1801 19 $3,214,286 $950,991

1895 20 $3,383,459 $935,555

Total $15,947,982

Cost per tank $8,413.90

Annualized cost 

per tank $794.21

Require Replacement of Piping if Repairs Exceed Certain Threshold

We model this cost only for facilities in Indian country. The cost associated with this requirement would 

be the incremental cost difference between the repair of single-walled piping and the installation of new 

secondarily-contained piping. This cost occurs only if, during the course of repairing a piping run, an 

owner or operator is required to repair more than a certain proportion of the entire piping run (as 

determined in the proposed rule). Further, the cost depends on the particular threshold: the lower the 

threshold, the greater the incremental cost of replacement (compared with repair) and the larger the 

proportion of facilities affected.

EPA estimated incremental costs for three thresholds: 10 percent (Choice 1), 25 percent (Choice 2), and 

50 percent (Choice 3). We calculate the costs associated with each threshold requirement to be $15,356, 

$10,557, and $2,559, respectively (2012$) (the installation of new piping less the cost of repairing singlewalled piping, from Secondary Containment for Piping Calculator). We assume, however, that no owners 

or operators would incur incremental costs under a 50 percent replacement threshold, as they would 

otherwise replace their piping in the baseline if repairs exceed that proportion (see Appendix C).

In Indian country, 60.3 percent of pipes are single-walled. For modeling purposes, we assume that 20

percent are affected per year. We also assume that 45 percent of pipes are affected per year under Choice 

1, 20 percent are affected per year under Choice 2, and zero percent are affected per year under Choice 3. 

This implies that 2,842, 1,263, and zero pipes are affected after 20 years, respectively, and that the 
D-23

number of pipes affected grows uniformly over time. We assume that pipes have lifetimes of 10 years, but 

amortize their costs over 20 years. 

This cost phases in over time and is adjusted as shown in subsequent exhibits. Because costs depend on 

the particular replacement threshold, we calculate costs for all three different scenarios.

Exhibit D-17

Secondary containment: Replace all piping if 10 percent requires repairs

Number of tanks 

affected Year

Nominal PV at 

year PV at year 1

142 1 $205,941 $205,941

284 2 $411,881 $384,936

426 3 $617,822 $539,629

568 4 $823,762 $672,435

710 5 $1,029,703 $785,555

852 6 $1,235,643 $880,997

995 7 $1,441,584 $960,588

1137 8 $1,647,524 $1,025,995

1279 9 $1,853,465 $1,078,733

1421 10 $2,059,405 $1,120,180

1563 11 $2,265,346 $1,151,587

1705 12 $2,471,287 $1,174,090

1847 13 $2,677,227 $1,188,721

1989 14 $2,883,168 $1,196,412

2131 15 $3,089,108 $1,198,009

2273 16 $3,295,049 $1,194,277

2415 17 $3,500,989 $1,185,906

2557 18 $3,706,930 $1,173,519

2699 19 $3,912,870 $1,157,677

2842 20 $4,118,811 $1,138,886

Total $19,414,074.69

Cost per tank $6,832.15

Annualized cost 

per tank $644.91
D-24

Exhibit D-18

Secondary containment: Replace all piping if 25 percent requires repairs

Number of tanks 

affected Year

Nominal PV at 

year PV at year 1

63 1 $62,926 $62,926

126 2 $125,853 $117,619

189 3 $188,779 $164,887

253 4 $251,705 $205,466

316 5 $314,631 $240,031

379 6 $377,558 $269,193

442 7 $440,484 $293,513

505 8 $503,410 $313,499

568 9 $566,336 $329,613

631 10 $629,263 $342,277

695 11 $692,189 $351,874

758 12 $755,115 $358,750

821 13 $818,042 $363,220

884 14 $880,968 $365,570

947 15 $943,894 $366,058

1010 16 $1,006,820 $364,918

1073 17 $1,069,747 $362,360

1137 18 $1,132,673 $358,575

1200 19 $1,195,599 $353,735

1263 20 $1,258,526 $347,993

Total $5,932,078.38

Cost per tank $4,697.10

Annualized cost 

per tank $443.37

Require Under-Dispenser Containment 

We model this only for facilities in Indian country. We calculate the cost associated with this requirement 

as $4,302 (2012$) (=$1,500 of installation costs + $517 for equipment in 2008$ per dispenser, of which 

there are two per system, inflated to 2012$). We assume that over 20 years, 96.98 percent of tanks will 

require under-dispenser containment. This implies 127 tanks will require under-dispenser containment 

each year. Because the universe affected by this facility grows over time due to equipment turnover, we 

amortize this cost over 20 years at a seven percent discount rate and incorporate the growing universe to 

obtain a more accurate estimate of costs. This cost phases in over time and is adjusted as shown in 

Exhibit D-19.
D-25

Exhibit D-19

Secondary containment: Require under-dispenser containment for all new dispensers

Number of tanks 

affected Year

Nominal PV at 

year PV at year 1

127 1 $51,556.02 $51,556.02 

254 2 $103,112.04 $96,366.39 

381 3 $154,668.06 $135,093.07 

508 4 $206,224.08 $168,340.28 

635 5 $257,780.10 $196,659.21 

762 6 $309,336.12 $220,552.38 

889 7 $360,892.14 $240,477.67 

1,027 8 $412,448.16 $256,851.99 

1,143 9 $464,004.18 $270,054.66 

1,269 10 $515,560.20 $280,430.59 

1,396 11 $567,116.22 $288,293.13 

1,523 12 $618,672.25 $293,926.73 

1,650 13 $670,228.27 $297,589.37 

1,777 14 $721,784.29 $299,514.82 

1,904 15 $773,340.31 $299,914.70 

2,031 16 $824,896.33 $298,980.39 

2,158 17 $876,452.35 $296,884.73 

2,285 18 $928,008.37 $293,783.68 

2,412 19 $979,564.39 $289,817.76 

2,539 20 $1,031,120.41 $285,113.39 

Total $4,960,200.96

Cost per tank $1,914.27

Annualized cost 

per tank $180.69

D.6 Results of Assessment of Compliance Costs

Exhibits D-20 through D-22 present a disaggregation of compliance costs under each regulatory option.

The exhibits also present the number of systems affected by each regulatory requirement.
D-26

Exhibit D-20

Total Annual Compliance Costs Due To The Final UST regulation For UST Systems Affected

Selected Option

All values in $ thousands a

Description Systems 

Affected

Capital Cost

(Annualized) O&M Total Cost

Release Prevention

Walkthrough inspections 555,003 $0 $23,000 $23,000

Periodic testing/inspections of:

- Overfill prevention equipment

- Spill prevention equipment 

- Containment sumps

190,623 $0 $64,000 $64,000

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment 40,011 $0 $12,000 $12,000

Elimination of flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replaced 63,818 $2,500 $0 $2,500

Subtotal – Release Prevention b

n/a $2,500 $99,000 $100,000

Release Detection

Operability tests for release detection methods (incl. groundwater and vapor 

monitoring) 165,492 $0 $21,000 $21,000

Groundwater and vapor monitoring for release detection c

25,475 $500 $0 $500

Add SIR/CITLD to regulation with performance criteria 2,756 $3 $0 $3

Remove release detection deferral for emergency generator tanks d

10,977 $250 $1,700 $2,000

Response to interstitial monitoring alarms e

10,634 $0 $0 $0

Subtotal – Release Detection b

n/a $750 $23,000 $24,000

Other

Remove deferral for airport hydrant fuel distribution systems f

81 See note b See note b $10,000

Remove deferral for UST systems with field-constructed tanks f

346 See note b See note b $11,000

Require notification of ownership change 8,726 $0 $46 $46

Closure of lined tanks that cannot be repaired according to a code of practice g

57 $0 $2,400 $2,400

Requirements for demonstrating compatibility with fuels > E10 and > B20 234 < $0.1 $0 < $0.1

Cost to owners/operators to read regulation 577,981 $5,500 $0 $5,500

Subtotal – Other b

n/a $5,500 $2,400 $29,000

EPAct-related Provisions

Operator training 2,618 $23 $110 $130

Secondary containment 2,217 $980 $0 $980

Subtotal – EPAct-related Provisions b

n/a $1,000 $110 $1,100

Subtotal b n/a $9,800 $120,000 $160,000

Additions for new units (beyond those included above) h n/a $5 $0 $5

Total b n/a $9,800 $120,000 $160,000
D-27

Exhibit D-20

Total Annual Compliance Costs Due To The Final UST regulation For UST Systems Affected

Selected Option

All values in $ thousands a

Description Systems 

Affected

Capital Cost

(Annualized) O&M Total Cost

a Cost estimates were derived using a seven percent discount rate. 

b Totals may not add due to rounding. Costs associated with the removal of deferrals for FCTs and AHFDSs or groundwater and vapor monitoring for 

release detection under Alternative 1 are included in the total columns only.

c Costs under the Selected Option include the cost of conducting a site assessment or well verification, weighted by the probability that one of these is 

necessary, as a one-time cost. For Alternative 1, costs include a five-year phase out of groundwater and vapor monitoring as release detection methods. 

Capital and O&M costs are aggregated in this line item for Alternative 1 because this requirement was modeled separately from the other requirements. 

See Appendix D for details. For Alternative 2, costs include only the cost of operability tests for these types of release detection. 

d Costs related to removal of deferrals for the regulation of emergency generator tanks include the cost of removal of deferrals, installation and 

maintenance of ATG on approximately seven percent of systems, installation and maintenance of SIR on 60 percent of systems, and performing 

operability tests on all EGT systems. See Appendix D for details. 

e The cost associated with this requirement would be the incremental cost difference between a tightness test (required in the baseline) and an 

interstitial integrity test (required by the final UST regulation). However, because the cost of an interstitial integrity test is less than the cost of a 

tightness test, we do not assign any cost to this requirement. See Appendix D for additional information.

f Airport hydrant fuel distribution systems include a capital cost because tanks associated with airport hydrant fuel distribution systems without existing 

ATGs are assumed to install ATGs to comply with the requirement. Similarly, the DoE UST systems with field-constructed tanks include a capital 

costs because these tanks are assumed to install ATGs to comply with the requirement. UST systems with field-constructed tanks without existing 

ATGs are assumed to conduct annual precision tightness tests to comply with the requirement. Capital and O&M costs are aggregated in these line 

items because various components of the compliance with release detection include both capital and O&M costs. See Appendix A for details.

g Although the closure of lined tanks represents a capital cost, we consider it an operation and maintenance cost as a modeling convenience. See 

Appendix D for details.

h As a simplifying assumption, EPA assumes that UST systems enter and exit the universe at a constant annual rate, such that the total number of UST 

systems in the universe does not change. We assume that operation and maintenance costs associated with these systems offset each other, as the 

number of entries equals the number of exits; however, new systems entering the universe will still incur incremental capital costs associated with 

certain requirements (e.g., a new emergency generator tank would need to install a release detection method). For modeling purposes, we account for 

these new units in the “Additions for new units.” The costs shown reflect the capital costs associated with new units for all but the following 

requirements: elimination of flow restrictors for new tanks, requirement of secondary containment for new tanks, and requirement of under-dispenser 

containment for new dispenser systems.
D-28

Exhibit D-21

Total Annual Compliance Costs Due To The Final UST regulation For UST Systems Affected

Alternative 1

All values in $ thousands a

Description Systems 

Affected

Capital Cost

(Annualized) O&M Total Cost

Release Prevention

Walkthrough inspections 555,003 $0 $53,000 $53,000

Periodic testing/inspections of:

- Overfill prevention equipment

- Spill prevention equipment 

- Containment sumps

210,266 $0 $180,000 $180,000

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment 40,011 $0 $12,000 $12,000

Elimination of flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replaced 63,818 $2,500 $0 $2,500

Subtotal – Release Prevention b

n/a $2,500 $250,000 $250,000

Release Detection

Operability tests for release detection methods (incl. groundwater and vapor 

monitoring) 165,492 $0 $24,000 $24,000

Groundwater and vapor monitoring for release detection c

25,968 See note b See note b $1,000

Add SIR/CITLD to regulation with performance criteria 2,756 $3 $0 $3

Remove release detection deferral for emergency generator tanks d

10,977 $290 $2,000 $2,300

Response to interstitial monitoring alarms e

10,634 $0 $0 $0

Subtotal – Release Detection b

n/a $290 $26,000 $27,000

Other

Remove deferral for airport hydrant fuel distribution systems f

81 See note b See note b $17

Remove deferral for UST systems with field-constructed tanks f

346 See note b See note b $66

Require notification of ownership change 8,726 $0 $46 $46

Closure of lined tanks that cannot be repaired according to a code of practice g

57 $0 $2,400 $2,400

Requirements for demonstrating compatibility with fuels > E10 and > B20 577,981 < $0.1 $1,100 $1,100

Cost to owners/operators to read regulation 577,981 $5,500 $0 $5,500

Subtotal – Other b

n/a $5,500 $3,500 $9,100

EPAct-related Provisions

Operator training 2,618 $23 $110 $130

Secondary containment 2,217 $980 $0 $980

Subtotal – EPAct-related Provisions b

n/a $1,000 $110 $1,100

Subtotal b n/a $9,300 $280,000 $290,000

Additions for new units (beyond those included above) h n/a $5 $0 $5

Total b n/a $9,300 $280,000 $290,000
D-29

Exhibit D-21

Total Annual Compliance Costs Due To The Final UST regulation For UST Systems Affected

Alternative 1

All values in $ thousands a

Description Systems 

Affected

Capital Cost

(Annualized) O&M Total Cost

a Cost estimates were derived using a seven percent discount rate. 

b Totals may not add due to rounding. Costs associated with the removal of deferrals for FCTs and AHFDSs or groundwater and vapor monitoring for 

release detection under Alternative 1 are included in the total columns only.

c Costs under the Selected Option include the cost of conducting a site assessment or well verification, weighted by the probability that one of these is 

necessary, as a one-time cost. For Alternative 1, costs include a five-year phase out of groundwater and vapor monitoring as release detection methods. 

Capital and O&M costs are aggregated in this line item for Alternative 1 because this requirement was modeled separately from the other requirements. 

See Appendix D for details. For Alternative 2, costs include only the cost of operability tests for these types of release detection. 

d Costs related to removal of deferrals for the regulation of emergency generator tanks include the cost of removal of deferrals, installation and 

maintenance of ATG on approximately seven percent of systems, installation and maintenance of SIR on 60 percent of systems, and performing 

operability tests on all EGT systems. See Appendix D for details. 

e The cost associated with this requirement would be the incremental cost difference between a tightness test (required in the baseline) and an 

interstitial integrity test (required by the final UST regulation). However, because the cost of an interstitial integrity test is less than the cost of a 

tightness test, we do not assign any cost to this requirement. See Appendix D for additional information.

f Airport hydrant fuel distribution systems include a capital cost because tanks associated with airport hydrant fuel distribution systems without existing 

ATGs are assumed to install ATGs to comply with the requirement. Similarly, the DoE UST systems with field-constructed tanks include a capital 

costs because these tanks are assumed to install ATGs to comply with the requirement. UST systems with field-constructed tanks without existing 

ATGs are assumed to conduct annual precision tightness tests to comply with the requirement. Capital and O&M costs are aggregated in these line 

items because various components of the compliance with release detection include both capital and O&M costs. See Appendix A for details.

g Although the closure of lined tanks represents a capital cost, we consider it an operation and maintenance cost as a modeling convenience. See 

Appendix D for details.

h As a simplifying assumption, EPA assumes that UST systems enter and exit the universe at a constant annual rate, such that the total number of UST 

systems in the universe does not change. We assume that operation and maintenance costs associated with these systems offset each other, as the 

number of entries equals the number of exits; however, new systems entering the universe will still incur incremental capital costs associated with 

certain requirements (e.g., a new emergency generator tank would need to install a release detection method). For modeling purposes, we account for 

these new units in the “Additions for new units.” The costs shown reflect the capital costs associated with new units for all but the following 

requirements: elimination of flow restrictors for new tanks, requirement of secondary containment for new tanks, and requirement of under-dispenser 

containment for new dispenser systems.
D-30

Exhibit D-22

Total Annual Compliance Costs Due To The Final UST regulation For UST Systems Affected

Alternative 2

All values in $ thousands a

Description Systems 

Affected

Capital Cost

(Annualized) O&M Total Cost

Release Prevention

Walkthrough inspections 349,551 $0 $7,000 $7,000

Periodic testing/inspections of:

- Overfill prevention equipment

- Spill prevention equipment 

- Containment sumps

388,641 $0 $19,000 $19,000

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment 40,011 $0 $12,000 $12,000

Elimination of flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replaced n/a n/a n/a n/a

Subtotal – Release Prevention b

n/a $0 $38,000 $38,000

Release Detection

Operability tests for release detection methods (incl. groundwater and vapor 

monitoring) 165,492 $0 $21,000 $21,000

Groundwater and vapor monitoring for release detection c

25,475 $0 $0 $0

Add SIR/CITLD to regulation with performance criteria 2,756 $3 $0 $3

Remove release detection deferral for emergency generator tanks d

10,977 $250 $1,700 $2,000

Response to interstitial monitoring alarms e

10,634 $0 $0 $0

Subtotal – Release Detection b

n/a $250 $23,000 $23,000

Other

Remove deferral for airport hydrant fuel distribution systems f

n/a n/a n/a n/a

Remove deferral for UST systems with field-constructed tanks f

n/a n/a n/a n/a

Require notification of ownership change 8,726 $0 $0 n/a

Closure of lined tanks that cannot be repaired according to a code of practice g

57 $0 $0 $0

Requirements for demonstrating compatibility with fuels > E10 and > B20 n/a n/a n/a n/a

Cost to owners/operators to read regulation 577,981 $5,500 $5,500 $5,500

Subtotal – Other b

n/a $5,500 $5,500 $5,500

EPAct-related Provisions

Operator training 2,618 $23 $110 $130

Secondary containment 2,217 $980 $0 $980

Subtotal – EPAct-related Provisions b

n/a $1,000 $110 $1,100

Subtotal b n/a $6,700 $63,000 $70,000

Additions for new units (beyond those included above) h n/a $5 $0 $5

Total b n/a $6,700 $63,000 $70,000
D-31

Exhibit D-22

Total Annual Compliance Costs Due To The Final UST regulation For UST Systems Affected

Alternative 2

All values in $ thousands a

Description Systems 

Affected

Capital Cost

(Annualized) O&M Total Cost

a Cost estimates were derived using a seven percent discount rate. 

b Totals may not add due to rounding. Costs associated with the removal of deferrals for FCTs and AHFDSs or groundwater and vapor monitoring for 

release detection under Alternative 1 are included in the total columns only.

c Costs under the Selected Option include the cost of conducting a site assessment or well verification, weighted by the probability that one of these is 

necessary, as a one-time cost. For Alternative 1, costs include a five-year phase out of groundwater and vapor monitoring as release detection methods. 

Capital and O&M costs are aggregated in this line item for Alternative 1 because this requirement was modeled separately from the other requirements. 

See Appendix D for details. For Alternative 2, costs include only the cost of operability tests for these types of release detection. 

d Costs related to removal of deferrals for the regulation of emergency generator tanks include the cost of removal of deferrals, installation and 

maintenance of ATG on approximately seven percent of systems, installation and maintenance of SIR on 60 percent of systems, and performing 

operability tests on all EGT systems. See Appendix D for details. 

e The cost associated with this requirement would be the incremental cost difference between a tightness test (required in the baseline) and an 

interstitial integrity test (required by the final UST regulation). However, because the cost of an interstitial integrity test is less than the cost of a 

tightness test, we do not assign any cost to this requirement. See Appendix D for additional information.

f Airport hydrant fuel distribution systems include a capital cost because tanks associated with airport hydrant fuel distribution systems without existing 

ATGs are assumed to install ATGs to comply with the requirement. Similarly, the DoE UST systems with field-constructed tanks include a capital 

costs because these tanks are assumed to install ATGs to comply with the requirement. UST systems with field-constructed tanks without existing 

ATGs are assumed to conduct annual precision tightness tests to comply with the requirement. Capital and O&M costs are aggregated in these line 

items because various components of the compliance with release detection include both capital and O&M costs. See Appendix A for details.

g Although the closure of lined tanks represents a capital cost, we consider it an operation and maintenance cost as a modeling convenience. See 

Appendix D for details.

h As a simplifying assumption, EPA assumes that UST systems enter and exit the universe at a constant annual rate, such that the total number of UST 

systems in the universe does not change. We assume that operation and maintenance costs associated with these systems offset each other, as the 

number of entries equals the number of exits; however, new systems entering the universe will still incur incremental capital costs associated with 

certain requirements (e.g., a new emergency generator tank would need to install a release detection method). For modeling purposes, we account for 

these new units in the “Additions for new units.” The costs shown reflect the capital costs associated with new units for all but the following 

requirements: elimination of flow restrictors for new tanks, requirement of secondary containment for new tanks, and requirement of under-dispenser 

containment for new dispenser systems.
Appendix E

Access Model Structure and Specifications
E-1

EPA relies on a cost model designed in Access to compute most of the costs of the regulation. The first 

section of this appendix explains the general process by which the model works. The subsequent section 

provides detailed explanations of the mechanics of the model, including the content and purpose of its 

underlying tables, queries, and macros. The final part of this appendix provides a brief user’s guide to 

the model.

E.1 Introduction

The purpose of this document is to briefly describe the contents and functionality of the underground 

storage tank (UST) regulatory cost model. This memorandum is organized in five parts. The first four 

parts explain the contents of the model: 1) tables; 2) queries; 3) forms; 4) reports. These categories are 

analogous to the categories of objects in Access 2003. The final part briefly outlines model use. 

The model operates by performing a series of queries on various tables to arrive at cost estimates for the 

regulations under consideration. The model requires four major steps to calculate the costs associated 

with each regulation. In order to arrive at its final output, the model:

1. Determines which states have regulations that are less stringent than those selected by the user.

2. Calculates the incremental frequency imposed by the more stringent requirement upon units in 

each state. The increment depends on the particular type of regulation considered, but in general 

refers to: A) the additional number of inspections required per year, B) a binary increment for 

whether a state requires a regulation, or C) a variable indicating whether the threshold set in a 

state is less stringent than that chosen by the user.

3. Calculates the incremental cost in terms of capital and O&M. The model considers these costs by 

unit type (facility, tank, or certain special tank types) and aggregates the costs at a state and 

national regulation. The costs included in the calculation are incremental to the regulations 

already in place. 

4. Presents a series of reports that display costs aggregated in several formats.

E.2 Identification Of Regulatory Changes

To track the costs associated with each regulation, we use a three-tiered identification system.

1. The regulation is the most aggregated level and is tracked by the RegulationID field. While the 

regulation level sometimes contains only one regulation, it often has a number of sub-regulations 

within it.

2. The sub-regulations, which we call sub-options, are tracked within RegulationID by the 

OptionID field. In most cases the RegulationID-OptionID pair tracks a single regulatory option

throughout the model. For example, the pair 5-1 refers to sub-option one of regulation five: spill 

prevention equipment test after repair. 

3. In some cases, the RegulationID-OptionID pair will not uniquely track a record. In these cases, 

the ChoiceID field is used to create a unique identifier for the calculation. For example, suboption 17-3 has a ChoiceID associated with each of its possible user selections. Even if a 

regulation does not need the ChoiceID field, we assign ChoiceID = 1 to it by default for 

completeness
E-2

The three fields described above create a basis for tracking calculations throughout the model and its 

tables. Thus, the example from point two above is tracked by the identifier RegulationID = 5, OptionID 

= 1, and ChoiceID = 1. We associate this unique identifier to each state to track the effect each 

regulation will have at the state level. To arrive at national figures, we sum the effects of regulations 

across individual states.

E.3 Tables

The following information is tabulated and used in the model. 

 Calculate number of EGTs: computes the number of emergency generator tanks for every model 

run. We assume that three percent of the UST universe is comprised of EGTs

 govt_costs_reg12_and_rewrite: costs of reading regulations and applying for SPA (field: 

general_costs), per tank cost of complying with regulation 12 (field: reg_12_costs), and cost of 

re-writing any regulations (field: cost_of_re-writing_regs), by state.

 LU_affected_portion: percentages of the universe affected by each regulation. These factors 

adjust for all possible effects, including personnel turnover, unit conversions, etc. for each 

regulation. For details on the specific aspects that are adjusted in each regulation, see the Excel 

input spreadsheet.

 LU_Cost_Types: cost type codes; used to track one-time and operations and maintenance costs.

 LU_Cost_Unit_Types: unit types; can be tank, facilities, or special tank types: emergency 

generator tanks (EGT), airport hydrant systems, field-constructed tanks, and wastewater 

treatment tanks.

 LU_new_and_closed_units: rates at which units are added or closed in the universe.

 LU_number_of_options_by_reg: number of sub-options by regulation.

 LU_Reg_Categories: regulation numbers and labels; used in reports.

 LU_reg_opts_costs: regulation costs categorized by cost type; reflects input data from Excel.

 LU_reg10_dropdown_list: user choices for regulation 10 (this is no longer relevant to the rule).

 LU_reg10_RD_probs: percentage of tanks affected at each probability option for regulation 10

(this is no longer relevant to the rule).

 LU_Reg11_special_tank_universe: universe of special tanks used only for regulation 11; 

reflects input data from Excel.

 LU_reg17_dropdown: user choices for regulation 17, option 3.

 LU_Reg17_opt2_dropdown: user choices for regulation 17, option 2.

 LU_reg17_opt2_piping: thresholds and universe affected at each threshold for piping repair 

versus replacement.
E-3

 LU_Reg17_opt3_dropdown: other regulation 17, option 3 dropdown.

 LU_regs_without_duped_options: options per regulation excluding redundant options.

 LU_Selections_Y_N: user choices for Yes/No regulations.

 LU_Selections_Y_N_Defer: Maintain deferral/Remove deferral user choice table.

 LU_States: list of states.

 LU_states_cost_types: list of states associated with cost types.

 LU_unit_affected_by_reg: regulations and which unit types they affect.

 LU_Y_N_Defer_singular: choices for regulation 11, option 1.

 Model_Assumptions: model assumptions; only life of tanks and discount rate are currently used.

 Reg 7 ID conversion for EGT calc: converted regulation identifiers used for the calculation of 

costs in regulation 11.1.

 Reg_Opts: regulatory options and their types. The preliminary model includes only frequency 

and record-keeping.

 reg11_EGT_costs: generated by the macro reg11_EGT_costs. This table is updated during every 

model run to capture the costs from regulations 7.1-7.6, 9, and 10.1-10.4 attributable to 

emergency generator tanks. The query set that compute costs for emergency generator tanks 

(regulation 11.1) draws on the values from this table as part of its calculation.

 Results_calc_national_unit_cost: used to calculate the cost of each regulation per tank.

 Results_cost_per_unit: table that underlies Costs_per_unit, the report of the cost of regulations 

per unit.

 Results_final_table: final output table from which all the reports are generated.

 Results_govt_costs: output that underlies Govt_costs, the report of government costs.

 Results_regulation_option_table_for_costs: output that underlies Regulation_option_costs, the 

report of national costs by sub-option.

 Results_regulation_option_table_for_units: output that underlies Regulation_option_units, the 

report of national numbers of units affected by each sub-option.

 Results_regulation_table: output that underlies Regulation_Costs, the report of national costs by 

major regulation.

 Results_state_reg_only_table: output that underlies State_regulation_costs, the report of state 

costs by major regulation.
E-4

 Results_state_reg_option_table_for_costs: output that underlies State_regulation_option_costs, 

the report of state costs by sub-option.

 Results_state_reg_option_table_for_units: output that underlies State_regulation_option_units, 

the report of state numbers of units affected by each sub-option.

 Results_user_inputs: output that underlies User_inputs, the report of the user’s choice of input.

 Selections_User_Defined user input accepted through the user interface.

 State_Baseline_Descriptives: numbers of each unit by state; includes tanks and facilities; reflects 

input data directly from Excel.

 state_costs_table: output that contains Boolean values to determine which regulations a state has; 

used as part of the calculation of government costs.

 State_Frequencies: records of whether a state has a regulation; if the regulation involves some 

measure of rate (i.e. months between inspections), that is recorded here. A frequency of zero is 

recorded if a state does not have a regulation in place; reflects input data from Excel.

 Temp_All_Costs: interim model cost output.

E.4 Queries

The model contains 31 sets of core queries, each of which performs the calculations for a regulatory 

option. Each query set is named according to the template myReg_[regulation number]_Opt_[option 

number]_Choice_[choice number]_step_[step number]; regulation, option, and choice numbers, 

along with regulations’ descriptions, can be found in the Reg_Opts table, and step refers to the element 

of the calculation performed by the query. As outlined above in the “Summary and Purpose” section of 

this memorandum, these queries:

1. Find the states that have regulations that are less stringent than those entered by the user.

2. Calculate the incremental frequency imposed upon each state by the more stringent requirement. 

The increment depends on the particular type of regulation considered, but in general refers to 1) 

the additional number of inspections required per year, 2) a binary increment for whether a state 

requires a regulation, or 3) in the case of regulations like regulation 17, option 2, an increment 

calculated from tables within the model.

3. Solve for the incremental cost in terms of capital and O&M. The model considers these costs by 

unit type (facility or tank; in the case of regulation 11, the model considers only populations of 

emergency generator tanks, airport hydrant systems, field-constructed tanks, and wastewater 

treatment tanks). 

Results_final_qry generates Results_final_table, the table of final output, the remaining queries that 

begin with Results_[...] are used to generate the reports of model results. Model results used for reports 

are stored in tables that begin with Results_[...]. Throughout the model, additional queries refine or 

adjust results to report them in the manner most useful for EPA.
E-5

We amended the queries as the model evolved to match EPA’s regulatory development process, but the 

procedures performed by the queries can be categorized as follows:

 Regulations 1, 7.1-7.6: calculates the number of incremental inspections or tests in states that do 

not have inspection frequency that at least equals the user’s selection. The model multiplies by 

the cost per inspection or test and the number of facilities or tanks in the state. Regulation 7.6 

also includes the cost of additional equipment related to piping, which requires several extra 

queries.

 Regulations 2-6, 9, 11.2, 11.3, 12-14, 16, and 17.1: multiplies the cost of compliance per unit by 

the number of units in each state that does not already have the regulation in place. Regulation 

17.1 applies only to tribal lands.

 Regulations 10.1-10.4: multiplies the per-unit cost of compliance with the Pd/Pfa chosen by the 

user by the number of tanks in states that do not already have Pd/Pfa at the user’s chosen level

(this is no longer relevant to the rule). [Note this was only used for the proposed rule.]

 Regulation 11.1: The model uses the queries in the macro reg11_EGT_costs to calculate the 

cost of compliance for the population of emergency generator tanks by applying the cost of 

compliance with certain regulations only to the EGT population (see Appendix D for a detailed 

explanation of this calculation).

 Regulation 17.2: relates the user’s chosen threshold to a factor that determines the proportion of 

units in each state that are affected. The calculation multiplies this factor by the cost of 

compliance per unit and the number of units in states that do not already have the regulation in 

place. This regulation only applies to Tribal lands. 

 Regulation 17.3: multiplies the cost of compliance per unit by the number of units in each state 

that does not already have the regulation in place. The user’s choice of “all dispensers” or “motor 

fuel dispensers only” changes the proportion of units affected. This regulation only applies to 

Tribal lands.

The queries for each of the above regulations are grouped in Access and labeled with the associated 

macros that link them together with similar names. In addition to sets of queries that compute costs as 

described above, other sets of queries were grouped into macros. The procedures they comprise are 

described below by the name of the macro that contains them; refer to the model for the specific queries 

included in each macro.

 Max: maximizes model window when the model is launched.

 reg11_EGT_costs: calculate the non-deferral costs associated with regulation 11.1.

 Results_cost_per_unit_macro: calculates the cost per unit associated with the scenario 

parameterized by the user. This is done using tanks as the unit and converting all other units to 

tanks.1

 

1

For example, suppose the universe has 100 tanks and consider two regulations: regulation A, which applies to 50% 

of the universe at a total cost of $500; and regulation B, which applies to 25% of the universe at a cost of $250. Each 

regulation has a cost of $10 if applied only to the units it affects; if we apply them to the entire universe, regulation A costs 

$5, while regulation B costs only $2.50. Thus, using the described methodologies, the cost per unit would be: 1) lower bound 
E-6

o The lower bound assumes the total costs for a regulation are divided across the entire 

universe of tanks. This approach does not adjust costs to reflect the fact that each 

regulation applies only to a subset of tanks, but provides a national estimate of average 

costs.

o The hybrid costs evaluates whether a particular regulation applies to over 50 percent of 

tanks. If this is the case, it divides the total cost of the regulation by the number of units it

actually affects and applies that cost to all of the units in the universe. Otherwise, it 

divides the cost of the regulation across the entire universe and considers that to be the 

per-unit cost attributable to the regulation.

o The upper bound assumes that all tanks incur the per-unit cost found by dividing a 

regulation’s cost by the number of tanks it affects (not the entire universe).

 Results_final_table_macro: generates table of final output.

 Results_regulation_only_costs_macro: calculates costs by regulation.

 Results_states_reg_only_macro: calculates costs by state and regulation.

 Results_regulation_option_table_for_costs_macro: calculates costs by regulatory sub-option.

 Results_states_reg_option_for_costs_macro: calculates costs by state and regulatory suboption.

 Results_regulation_option_table_for_units_macro: calculates units affected by regulatory 

sub-option.

 Results_states_reg_option_for_units_macro: calculates units affected by state and regulatory 

sub-option.

 Costs_per_unit_macro: calculates cost of compliance per unit.

 Results_govt_costs_macro: calculates costs accrued to state governments.

 Results_user_inputs_macro: tabulates parameters chosen by the user.

 state_costs_table_macro: generates table used to determine which states have which regulations 

in place.

 Warnings: turns off warnings and other messages that would have occurred during the normal 

course of using Access.

E.5 Forms

The Main_page form contains the user interface of the model and is launched by default. The remaining 

forms either connect to Main_page through the user interface or were previously used to generate 

queries. 

 

cost = $5 (A) + $2.50 (B) = $7.50; hybrid cost = $10 (A) + $2.50 = $12.50 (B); and upper bound cost = $10 (A) + $10 (B) = 

$20.
E-7

E.6 Reports

Reports display the final cost output in a user-friendly format. The following reports are available:

1. Regulation_Costs: costs by regulation.

2. State_regulation_costs: costs by state and regulation.

3. Regulation_option_costs: costs by regulatory sub-option.

4. State_regulation_option_costs: costs by state and regulatory sub-option.

5. Regulation_option_units: units affected by regulatory sub-option.

6. State_regulation_option_units: units affected by state and regulatory sub-option.

7. Costs_per_unit: cost of compliance per unit.

8. Govt_costs: costs accrued to state governments.

9. User_inputs: parameters chosen by the user.

Note that the report of units affected by regulatory sub-option cannot be aggregated to a total number of 

units at the regulatory or state level: regulatory sub-options affect different universes in many cases. In 

addition, in order to avoid possible confusion over the reported output, reports should not be run 

separately from the model. 

E.7 Using This Model

To use this model, do as follows:

1. Open the Access database project file. If presented with a security warning, click Open.

2. If not immediately presented with the main page, navigate to the Forms heading under Objects.

Double-click the Main_page form to open the model.

3. Read the information in the yellow box at the top of the model window to identify key caveats 

and current status updates.

4. Select the regulatory options you wish to run using the input buttons. 

5. Click the Run Model button to calculate the costs. This may take a moment; you will be notified

by a message when the model is done.

6. Click any report button to display the results in that format. One should print the user input

report as a cover sheet to any cost results that so that they may be later cross-referenced with 

costs.

7. A report that contains a summary of the costs will appear. Click the Close button near the upper 

left area of the screen to return to the previous window.
E-8

8. If you would like to run the model with different parameters, click the Return to Scenario 

Selection Screen button to return to the main model input screen.

9. When you are finished with the model, simply close Access.

E.8 Parameters Used for Calculating Cost to Final Rule in Access Model

Exhibit E-1 presents a summary of the parameters used as input to the Access model designed to obtain 

the costs presented in the body of this report.
E-9

Exhibit E-1: Input Used in Access Model for Selected Option

DESCRIPTION

Selected

Option Alternative 1 Alternative 2 Input Type

Release Prevention

Walkthrough inspections 1 1 3 Months Between Inspections

Overfill prevention equipment inspections 36 12 N/A Months Between Tests

Spill prevention equipment tests 36 12 36 Months Between Tests

Containment sump tests 36 12 N/A Months Between Tests

Spill prevention equipment inspection after 

repair 1 1 1 1 For Yes; 0 For No

Overfill prevention equipment test after 

repair 1 1 1 1 For Yes; 0 For No

Secondary containment test after repair 1 1 1 1 For Yes; 0 For No

Eliminate flow restrictors for all new tanks

and when overfill prevention equipment is 

replaced 1 1 0 1 For Yes; 0 For No

Release Detection

Operability test – ATG 12 12 12 Months Between Tests

Operability test - interstitial monitoring 12 12 12 Months Between Tests

Operability test - line leak detection 12 12 12 Months Between Tests

Operability test – groundwater monitoring 12 12 12 Months Between Tests

Operability test – vapor monitoring 12 12 12 Months Between Tests

Eliminate vapor and groundwater monitoring

as release detection methods (Alternative 1 

only)

Add SIR/CITLD to regulations with 

performance criteria 1 1 1 1 For Yes; 0 For No

Release detection deferral removed for 

emergency generator tanks 1 1 1 1 For Yes; 0 For No

Other

Requirements for demonstrating 

compatibility with fuels > E10 and > B20

Deferral removed for airport hydrant fuel 

distribution systems

Deferral removed for UST systems with 

field-constructed tanks

Notification of ownership change 1 1 1 1 For Yes; 0 For No

Closure of irreparable lined tanks that cannot 

be repaired according to a code of practice 1 1 1 1 For Yes; 0 For No

Response to interstitial monitoring alarms 1 1 1 1 For Yes; 0 For No

Energy Policy Act-related Provisions

Operator training 1 1 1 1 For Yes; 0 For No

Secondary containment - new & replaced 

tanks 1 1 1 1 For Yes; 0 For No

Threshold for pipe replacement rather than 

repair 0.5 0.5 0.5 Piping Replacement Threshold

Under-dispenser containment (UDC) for all 

new dispensers 1 1 1

1 If Applies To All UDCs; 0 

Otherwise

Notes:

1. Entries shown in gray denote items not calculated in the Access model.

2. Entries marked "N/A" denote an item not included in this alternative.
Appendix F

Analysis of Statistical Relationship between 

State Regulatory Programs and Confirmed Release Data
F-1

Confidential / Not for Release | July 16, 2010

MEMORANDUM | July 16, 2010

TO Cho-Yi Kwan, U.S. EPA

FROM Nadav Tanners, Cynthia Manson, and Robert Paterson, IEc

SUBJECT

Documentation of Empirical Investigations of UST Data to Support Regulatory Analysis

EMRAD Work Assignment 3-25, Task 5

In 2009, Industrial Economics (IEc) examined available data from EPA’s Office of 

Underground Storage tanks to determine whether it would support an empirical analysis 

of the impact of selected UST regulations on the rate of UST releases using multivariate 

regression analysis. As part of this effort, IEc used a set of state-level data that included 

the number of USTs in each state in a given year, the number of releases from USTs in 

each year, the number of UST inspections conducted in each year, and the presence or 

absence of regulations designed to prevent leaks. The results of this analysis were 

presented in an August 2009 memorandum (hereafter “2009 Memo”). This memorandum 

updates the 2009 analysis and discusses the implications of its findings. 

Before conducting regression analysis on the data set of state USTs and releases, IEC first 

adjusted the data to account for a number of data quality concerns. A key data concern 

was the relationship between states with low frequency inspections and states reporting 

small numbers of confirmed releases. To ensure that the reported UST releases 

accurately reflected most or all releases taking place, EPA developed an index that scored 

each state based on the frequency of inspections. A detailed description of the inspection 

frequency index used to remove states suspected of having unreliable release data is 

provided in the 2009 Memo, attached to this Appendix.

1

States that reported inspection rates less frequent than every five years, and/or 

inconsistent inspection frequencies over time, were removed from the sample, based on 

the assumption that release data from those states may be less reliable due to less frequent 

third party verification (i.e., state inspection) of system operations. In other words, we 

assume that owners/operators may be less inclined to report releases or be fully compliant 

if they are in a state where inspections occur infrequently or inconsistently.

 

1

“Work Assignment 2-25, Task 5. Summary of Regression Analysis of UST Regulations 

by State.” August 3, 2009.

INTRODUCTION

UPDATE OF 

PREVIOUS 

ANALYSIS
F-2

Confidential / Not for Release | July 16, 2010

Using the inspection frequency index, IEc ran regressions on the 29 states with the 

highest inspection frequency scores (index value = 5) and on the 38 states with the two 

highest scores (index value > 3). IEc ran three cross-sectional regressions on each group: 

one on releases in 2008 (the most recent year for which release data were available), one 

on releases in 2005 (the year in which the Energy Policy Act was passed), and one on the 

average number of releases from 2002 to 2006 (meant to represent the number of releases 

before and shortly after passage of the 2005 Energy Policy Act). 

The results of the 2009 regressions were limited. Some regulatory variables (periodic 

interstitial integrity testing and periodic tightness testing of spill buckets) had a 

statistically significant, negative relationship with the number of releases, some variables 

(secondary containment and periodic tightness testing of dispenser pans) demonstrated a 

positive relationship with the number of releases, and other variables (STP sumps, 

continuous interstitial monitoring, and periodic tightness testing of sumps) did not 

demonstrate a consistent relationship with the number of releases.2

To update the analysis described in the 2009 Memo, IEc obtained more complete data on 

the presence of UST regulations by state, including whether or not states conducted walkthrough inspections at least once per year, as well as data on the number of tanks and 

releases in each state in 2009. In addition, IEc made the following changes:

1. Regulatory variables that only applied to a single state – namely periodic 

interstitial integrity testing (only applied to California) and periodic tightness 

testing of dispenser pans (only applied to Delaware) were dropped.

2. In their place, dummy variables for California and Florida were added. 

These changes were implemented in order to facilitate interpretation of the results of the 

regression analysis. If a regulatory variable only applies to a single state, then for 

purposes of regression it essentially serves as a dummy variable that measures the unique 

impact of that state on the number of releases – all other variables held constant. Dummy 

variables for California and Florida were added in order to explicitly measure the 

difference in the number of releases in each state from the number that would be expected 

based on average release rates at other states. Note that the variable representing the 

requirement of STP sumps was dropped in regressions 1-3 due to insufficient variability 

but included in regressions 4-6. 

Exhibits 1-5 reproduce the information presented in the 2009 Memo, updated to reflect 

the latest analysis. Exhibit 1 lists and defines each of the variables used in the 

regressions, while Exhibit 2 summarizes the six regressions run. Exhibits 3 and 4 present 

summary statistics for each of the variables used in the regressions and note which states 

 

2

IEc also considered examining the rate of releases by state (i.e., the number of releases 

divided by the number of USTs in each state). However, screening analyses showed that 

specifying the regressions in this way did not account for the fact that the number of USTs varies 

widely by state. States with mature UST regulatory programs – specifically California and Florida 

– have far more USTs than the average across states with frequent inspections. Accordingly IEc

included the number of USTs as an explanatory variable in the regression analysis.
F-3

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have each of the UST regulations represented by regulatory dummy variables. Exhibit 5 

presents the results of the regression analysis, noting which regression coefficients are 

statistically significant at the 0.1, 0.05, and 0.01 levels. As the exhibit shows, even in the 

updated regression analysis, there is not a consistent, statistically significant relationship 

between the regulatory variables and the number of releases by state. For example, 

secondary containment requirements are consistently associated with an above-average 

number of releases (though this relationship is not always statistically significant). In 

addition, STP sump requirements – when included in the analysis – are consistently 

associated with a below-average number of releases. Continuous interstitial monitoring 

and periodic tightness testing of sumps do not appear to have either a positive or a 

negative correlation with the number of releases by state. Periodic spill bucket testing 

and walkthrough inspections are consistently associated with below-average and aboveaverage numbers of releases, respectively, though in neither case is this correlation 

significant. The only variables to show statistically significant, large and negative 

correlations with the number of releases are the dummy variables for California and 

Florida, but even then those relationships were not consistently statistically significant 

across all of the years examined. 

Exhibit 6 shows the degree to which the actual number of releases in Florida and 

California in 2009, 2005, and from 2002 to 2006 is less than the number of releases that 

would be expected based on the release rates observed at other states. In 2005 and 2009, 

the years in which the dummy variable for California was statistically significant from 

zero, California had between 56 and 63 percent fewer releases than would be expected 

based on the regression analysis. In 2002-2006, when the period in which the dummy 

variable for Florida was statistically significant from zero, Florida had between 60 and 65 

percent fewer releases than would be expected. As will be discussed below, IEc strongly 

cautions against generalizing these results beyond the states included in the analysis. 

However, these numbers do suggest an upper bound of potential avoided leaks associated 

with the operation of the mature, relatively stringent programs in both California and 

Florida.
F-4

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EXHIBIT 1. VARIABLES USED IN REGRESSION ANALYSIS

VARIABLE NAME SOURCE DESCRIPTION

t2009, t2005 RawData Number of USTs in each state in year 2009 and 2005, respectively

r2009, r2005 RawData Number of releases from USTs in each state in year 2009 and 2005, respectively

tavg0206 RawData Average number of USTs in each state from 2002 to 2006

ravg0206 Rawdata Average number of releases from USTs in each state from 2002 to 2006

mapseccon Map Dummy variable: 1 if a state has secondary containment regulation in place by

November 2005

e2stpsump1E

2 Dummy variable: 1 if a state has a requirement for STP sumps

e2contmonit1E

2 Dummy variable: 1 if a state has continuous interstitial monitoring

e2persump3E

2 Dummy variable: 1 if a state has a requirement for periodic tightness testing of sumps

e2persbtest E

2 Dummy variable: 1 if a state has a requirement for periodic tightness testing of spill 

buckets 

walkthrough E

2 Dummy variable: 1 if a state has a requirement for periodic (i.e., more than annual) 

walkthrough checks

dum_ca n/a Dummy variable: 1 if the state is California

dum_fl n/a Dummy variable: 1 if the state is Florida

e2perinteg1,3 E

2 Dummy variable: 1 if a state has a requirement for periodic interstitial integrity testing

IEcperdptest3 DPRA Dummy variable: 1 if a state has a requirement for periodic tightness testing of 

dispenser pans

insfreqind Insp, 

RawData

Index variable: 0-5 scale that grades each state based on the following scale:

1. If the state’s 2008 UST inspection frequency is once every five years or more often: 

two points.

2. If the state’s 2008 UST inspection frequency is between once every five years and 

once every ten years: one point.

3. If the state’s average UST inspection frequency from 2003 to 2005 is once every five 

years or more often: two points.

4. If the state’s average UST inspection frequency from 2003 to 2005 is between once 

every five years and once every ten years: two points.

5. If the standard deviation of the state’s UST inspection frequencies in 2003, 2004, 

2005, and 2008 is three or less: one point.

Notes:

1. We assume that a state without secondary containment regulation in November 2005 would also not have 

regulations for stp sumps, continuous interstitial monitoring, or periodic interstitial integrity testing at that 

time. Thus, values for e2stpsump, e2contmonit, and e2perinteg are all set to zero for states where the value of 

mapseccon is zero. 

2. On the suggestion of Tim Roberts, we also adjusted the index scores of Minnesota and Washington upward by 

one point.

3. Due to a lack of variability in these variables, they were not included in the regression analysis. e2stpsump was 

included in regressions 4-6 but not in regressions 1-3.
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EXHIBIT 2. SUMMARY OF REGRESSIONS RUN

REGRESSION 

#

DEPENDENT 

VARIABLE INDEPENDENT VARIABLES RESTRICTIONS

(1) r2009 t2009, mapseccon, e2contmonit, e2persump, 

IEcpersbtest, walkthrough, dum_ca, dum_fl

insfreqind = 5

(2) r2005 t2005, mapseccon, e2contmonit, e2persump, 

IEcpersbtest, walkthrough, dum_ca, dum_fl

insfreqind = 5

(3) ravg0206 tavg0206, mapseccon, e2contmonit, e2persump, 

IEcpersbtest, walkthrough, dum_ca, dum_fl

insfreqind = 5

(4) r2009 t2009, mapseccon, e2stpsump, e2contmonit, e2persump, 

IEcpersbtest, walkthrough, dum_ca, dum_fl

insfreqind > 3

(5) r2005 t2005, mapseccon, e2stpsump, e2contmonit, e2persump, 

IEcpersbtest, walkthrough, dum_ca, dum_fl

insfreqind > 3

(6) ravg0206 tavg0206, mapseccon, e2stpsump, e2contmonit, 

e2persump, IEcpersbtest, walkthrough, dum_ca, dum_fl

insfreqind > 3

EXHIBIT 3. SUMMARY STATISTICS OF VARIABLES USED IN REGRESSIONS 1-3

VARIABLE OBS MEAN STD. DEV. MIN MAX STATES (DUMMIES ONLY)

t2009 29 9,757 8,738 1,191 36,899

t2005 29 10,219 9,406 1,065 38,753

tavg0206 29 10,429 9,652 1,111 40,142

r2009 29 95 84 6 330

r2005 29 121 123 1 536

ravg0206 29 146 169 1 617

mapseccon 29 0.172 0.384 0 1 CA, FL, HI, ME, NH

e2stpsump129 0.0690 0.258 0 1 FL, NH

e2contmonit 29 0.103 0.310 0 1 CA, ME, NH

e2persump 29 0.276 0.455 0 1

AL, DE, IA, MS, ND, TN, 

UT, WY

IEcpersbtest 29 0.172 0.384 0 1 AL, CA, DE, FL, MS

walkthrough 29 0.276 0.455 0 1

CA, CO, NH, NM, SC, TN, 

UT, WI

dum_ca 29 0.0345 0.186 0 1 CA

dum_fl 29 0.0345 0.186 0 1 FL

Note:

1

e2stpsump was excluded from regressions 1-3 because in the presence of dum_fl it only applies to NH.
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EXHIBIT 4. SUMMARY STATISTICS OF VARIABLES USED IN REGRESSIONS 4-6

VARIABLE OBS MEAN STD. DEV. MIN MAX STATES (DUMMIES ONLY)

t2009 38 10,389 8,514 1,191 36,899

t2005 38 10,916 9,179 1,065 38,753

tavg0206 38 11,108 9,404 1,111 40,142

r2009 38 106 89 5 330

r2005 38 125 120 1 536

ravg0206 38 151 165 1 617

mapseccon 38 0.158 0.370 0 1 CA, FL, HI, ME, NH, RI

e2stpsump 38 0.0789 0.273 0 1 FL, NH, RI

e2contmonit 38 0.0789 0.273 0 1 CA, ME, NH

e2persump 38 0.289 0.460 0 1

AL, DE, IA, MN, MS, NC, 

ND, TN, UT, WV, WY

IEcpersbtest 38 0.158 0.370 0 1 AL, CA, DE, FL, MS, NC

walkthrough 38 0.237 0.431 0 1

CA, CO, MN, NH, NM, SC, 

TN, UT, WI

dum_ca 0.0263 0.162 0 1 CA

dum_fl 38 0.0263 0.162 0 1 FL
F-7

EXHIBIT 5. REGRESSION RESULTS

REGRESSION 

#

DEPENDENT 

VARIABLE N

REGRESSION COEFFICIENTS

CONST

ANT T2009 T2005 TAVG0206 MAPSECCON

E2STPS

UMP

E2CONTM

ONIT

E2PERSU

MP

IECPERS

BTEST

WALKTH

ROUGH DUM_CA DUM_FL

(1) r2009 29 6.74 0.0104*** 9.82 ^ -6.3 -11.9 -9.83 8.98 -245*** -105

(2) r2005 29 -30.7 0.0157*** 39.6* ^ -8.18 7.45 -46.8 32.4 -341** -198

(3) ravg0206 29 -45.5 0.0200*** 51.7** ^ -6.72 1.49 -48.6 -0.743 -137 -375**

(4) r2008 38 8.64 0.0104*** 9.6 -31.1** 5.97 -3.73 -29.5 13.3 -244*** -55.1

(5) r2005 38 -20.7 0.0141*** 43* -36.4* 1.11 -1.25 -53.3 34.1 -293*** -116

(6) ravg0206 38 -46.6** 0.0187*** 58.7** -26.3* 1.95 -2.67 -39.4 4.9 -114 -323***

Notes: Regressions used hederoskedasticity-robust standard errors.

^ Variable was not included in the regression because it only applies to one state.

* Coefficient is significantly different from zero at the 0.1 level.

** Coefficient is significantly different from zero at the .05 level.

*** Coefficient is significantly different from zero at the .01 level.

EXHIBIT 6. COMPARISON BETWEEN ACTUAL AND EXPECTED RELEASES IN CALIFORNIA AND FLORIDA, BASED ON REGRESSION ANALYSIS

YEAR

REGRESSION 

NUMBER

CALIFORNIA FLORIDA

ACTUAL NUMBER 

OF RELEASES

EXPECTED # OF RELEASES 

(DUM_CA = 0)

PERCENT 

DIFFERENCE

ACTUAL NUMBER OF 

RELEASES

EXPECTED # OF RELEASES 

(DUM_FL = 0)

PERCENT 

DIFFERENCE

2009

(1)

148

390** -63%

169

273 -38%

(4) 392** -62% 275 -20%

2005

(2)

256

597* -57%

254

459 -43%

(5) 524** -56% 417 -28%

2002-2006

(3)

617

758 -18%

206

578** -65%

(6) 705 -16% 536** -60%

Notes: * Coefficient for the dummy variable is significantly different from zero at the .05 level.

 ** Coefficient for the dummy variable is significantly different from zero at the .01 level.
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STATISTICAL CHALLENGES

A number of fundamental problems limit the value of the regression analysis conducted 

in 2009, and these problems persist with the updated analysis described above. In 

particular, data availability and reliability seriously limit, if not preclude, measurement of 

the effectiveness of UST leak prevention regulations in reducing releases in this context. 

Estimation and Aggregation Problems

As described above, consistent, accurate release data are not available. It is likely that 

measurement error exists in the recording of confirmed releases across states (the 

dependent variable) and that it is related in some systematic way to the regulatory 

structure of the state or other explanatory variables (as opposed to random reporting 

error) in the analysis.3 In addition, state inspections vary in timing and focus across 

states; this, in turn, affects the consistency of third-party verified compliance and release 

information. IEc attempted to account for this by selecting only states with a high 

frequency of inspections for inclusion in the analysis. Unfortunately, interaction between 

inspection frequency and degree and effectiveness of regulation creates sample selection 

problems ((i.e., states with higher release rates due to limited regulation may also be 

states that do not conduct frequent inspections and therefore have less reliable data).

4

 

Therefore, normal regression properties do not hold, and regression analysis may provide 

unreliable results. As an example, Exhibit 5 shows that regressions 2, 3, 5, and 6 found a 

positive, statistically significant relationship between secondary containment 

requirements and the number of releases per year, in contrast to empirical data from 

Florida which suggest that secondary containment may reduce releases by roughly 50 

percent.5

Another obstacle to measuring the efficacy of UST regulations, as shown in Exhibit 4, is 

that many regulations are present only in a small number of states. In the cross-sectional 

analysis described above, IEc dealt with limited variation in the presence of regulations 

by dropping several regulatory variables from the analysis. Given this lack of variation, 

and the small number of potential observations, it is likely that regulatory indicators will 

proxy for other relevant characteristics of that state. 

This lack of variation can shed some light on the negative, statistically significant 

relationship between the number of releases per year and STP sumps requirements found 

in regressions 4-6. Since only three states included in the analysis require STP sumps

(Florida, New Hampshire, and Rhode Island), it is likely that the regression analysis 

actually measured the effect of other characteristics of one or more of those states, rather 

 

3 As shown in Exhibit 9, release rates in Alabama and Florida spiked in 1993 after release 

detection requirements were implemented, indicating that the reported number of releases in a 

particular year might include releases that occurred in prior years. 

4 The only reliable approach to identify the relationship between inspection frequency, 

compliance, and number of releases would require a large-scale data collection effort. In absence 

of this, we use inspection frequency as an indicator of reliable data

5 U.S. EPA, Petroleum Releases at Underground Storage Tanks in Florida (Draft). 2005.

DISCUSSION
F-9

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than the regulation itself. Indeed, when regressions 4 and 5 are run without the variable 

e2stpsump, the coefficient for the dummy variable for Florida becomes significant at the 

0.1 level, suggesting that some unmeasured characteristic of Florida was responsible for 

the apparent relationship between STP sump requirements and the number of releases 

observed in Florida, New Hampshire, and Rhode Island.

Taken together, these issues create serious estimation and inference problems, and 

prohibit generalizing any results beyond the sample states. In short, the data do not 

support a national analysis of the effectiveness of state regulation.

Appropriate Study Design

Ideally, given accurate release data, an analysis of the effectiveness of UST leak 

prevention regulations would employ observations from a large number of states over a 

time period the includes years before and after regulations were in place. Such “panel” 

data would allow for identification of impacts temporally and spatially. Panel data would 

also allow for fixed effects estimation, which controls for any unobserved characteristics 

of states that might affect release rates (such as soil pH or climate), independent of any 

effect of regulation. The data used in this analysis superficially appear to be panel data, 

since they provide information on the number or rate of releases from different states in 

multiple time periods, along with information on the presence or absence of UST 

regulations by state. However, accuracy issues aside, for most UST regulations, it is 

unclear both when the regulation was first promulgated and when the effects of the 

regulation would be expected to be fully realized. As noted in Exhibit 2 (and explained 

in more detail in the 2009 Memorandum), the cross-sectional analysis dealt with this 

uncertainty by assuming that states without secondary containment in November 2005 

would also lack requirements for STP sumps, continuous interstitial monitoring, or 

periodic interstitial integrity testing. Aggregation of regulatory measures in this fashion 

further exacerbates identification problems across states in the cross-sectional analysis 

described above.

Exhibit 7 summarizes some of the statistical challenges described above, explaining why 

the data used in this analysis limit its ability to measure the effectiveness of UST leak 

prevention regulations. Because of these limitations, IEc cautions against drawing strong 

conclusions from the results of the regression analysis described in this appendix.

EXHIBIT 7. STATISTICAL CHALLENGES TO ANALYZING THE EFFECTIVENESS OF RELEASE-PREVENTION UST 

REGULATIONS

STATISTICAL 

CONSIDERATION WHY IMPORTANT? REQUIREMENT ACTUAL DATA

Panel Data Panel Data allows for 

fixed effects estimation, 

which controls for 

unobserved variation 

between states.

1. Data must distinguish 

between periods before 

regulation and periods 

after regulation.

2. Sufficient variation in 

1. Difficult to determine 

before and after periods 

for most regulations

2. Too few states have many 

regulations. Because of 
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EXHIBIT 7. STATISTICAL CHALLENGES TO ANALYZING THE EFFECTIVENESS OF RELEASE-PREVENTION UST 

REGULATIONS

STATISTICAL 

CONSIDERATION WHY IMPORTANT? REQUIREMENT ACTUAL DATA

regulatory status must 

be present, both 

between states and 

between time periods

limited variation in 

regulatory status among 

states, some regulatory

variables may serve as a 

proxy for other state 

characteristics that 

affect release rates.

Random 

Sampling

In the absence of panel 

data, random sampling 

ensures that the sample 

is not a biased selection 

of the general population

The sampling process must 

not create bias

By selecting states based on 

the frequency of inspections, 

the analysis conducted a 

convenience sample, which 

likely excludes the worstperforming states.

Exogeneity Exogeneity ensures that 

any correlation between 

release rates and UST 

regulations actually 

reflects a causal 

relationship. In the 

absence of exogeneity, 

traditional regression 

analysis produces invalid 

results.

The presence or absence 

of UST regulations must 

not be related to preexisting release rates.

Some states likely implement 

regulations in response to 

pre-existing release rates.

Measurement 

Error

If there is measurement 

error in the dependent 

variable being analyzed, 

then the results of 

regression analysis will 

not reflect the actual 

relationship between the 

dependent variable and 

the explanatory variable.

Variables must accurately 

measure the information 

they are meant to 

represent.

Reported releases in a given 

year may not represent 

releases that occurred in 

that year. Trends in release 

data suggest that 

implementing release 

detection requirements leads 

to detection of releases from 

previous years.

ADDITIONAL ANALYSIS

Recognizing the limitations to the regression analysis described above, IEc employed a 

different approach to estimating the potential impact of proposed UST leak prevention 

regulations. Having identified California and Florida as two states with more mature 

regulatory systems in place, IEc compared the release rates in these two states from 2005 

to 2009 to release rates in states without any of the proposed UST regulations during that 

time period. IEc first identified 12 states with no UST regulations and with inspection 

frequency index scores of 4 or 5, and then used t-tests to compare release rates between 

the two groups of states. 

The results of this comparison are presented in Exhibit 8. The analysis found that release 

rates in California and Florida were significantly lower than release rates at states with no 

regulations in 2005 (p = 0.051) and in 2009 (p = 0.041), but not in 2006, 2007, or 2008. 
F-11

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In 2006 and 2007, reported releases in California and Florida actually occurred at higher 

rates than in states without UST regulations. Across all five years, California and Florida 

had an average release rate lower than the other group of states, but this difference was 

not statistically significant (p = 0.171). The results in Exhibit 8 suggest that there is no 

consistent, statistically significant difference between release rates in California and 

Florida and release rates in the twelve states with a high frequency of inspections and no 

other UST regulations.

EXHIBIT 8. COMPARISON OF RELEASE RATES AT CALIFORNIA AND FLORIDA TO RELEASE RATES AT 

STATES WITH NO UST REGULATIONS

2005 2006 2007 2008 2009 AVERAGE

Mean Release Rates

California and 

Florida 0.74% 1.22% 0.81% 0.73% 0.53% 0.81%

States with no UST 

Regulations 1.05% 0.98% 0.81% 0.97% 1.17% 1.00%

T-test p value 0.051 n/a n/a 0.156 0.041 0.171

Notes: 

One-tailed t-tests were performed on release rates in 2005, 2006, 2009, and the average rate 

across all five years. T-tests were not performed on release rates in 2006 and 2007 because 

mean release rates in California and Florida were equal to or higher than release rates in states 

with no UST regulations.

IMPLICATIONS

As discussed in this appendix, quantitative analysis of annual UST releases by state was 

unable to find a consistent measure of the potential impact of leak prevention regulations. 

Due to a number of data limitations, including limited variation in the presence of 

regulations across states and time periods, IEC was not able to use the preferred method 

of fixed effects estimation using panel data. In the absence of fixed effects estimation, 

the analysis cannot reliably draw conclusions about the impacts of regulations on 

releases, independent of any unmeasured characteristics of states that could be affecting 

the number of releases in each state. In other words, in addition to data quality issues 

discussed above, the small number of states with specific UST release prevention 

regulations prevents identification of robust, relationships between individual regulations 

and the number of releases per year.

However, through cross-sectional analysis, IEC was able to estimate that release rates in 

California and Florida – two states with mature UST regulation regimes – were about 55-

65 percent less than one would expect based on release rates at other states during the 
F-12

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time period examined.

6

 This difference could serve as an upper bound for the potential of 

leak prevention regulations to reduce the rate of UST releases.

Comparing release rates from 2005 to 2009 in California and Florida to release rates in 

states without any UST regulations, IEC did not find a consistent, statistically significant 

difference. However, by looking only at states with a high frequency of inspections, this 

comparison likely did not capture the full range of release rates at states without effective 

UST regulatory systems. The fact that release rates at states with frequent inspections 

and no other UST regulations was not significantly greater than release rates at California 

and Florida could even suggest that the inspections themselves are effective at limiting 

releases (frequent inspections are, in fact, a key component of the new regulations under 

consideration). 

This conclusion is supported by the trend shown in Exhibit 8, where after an initial spike 

in detected releases upon implementing inspection requirements, release rates in 

California, Florida, and Alabama show gradual, steady declines. Additionally, as noted 

by the coefficients for t2009, t2005, and tavg0206 in Exhibit 5, the average release rate 

for the states examined in the cross-sectional regression analysis – all of which have 

frequent inspections – appears to be decreasing over time, from between 1.87 and 2.0 

percent in 2002-2006 to 1.04 percent in 2009.

 

6

IEC further tested these results with a supplementary analysis using binary variables 

for states that share regulations with California and Florida. That analysis also found that 

California and Florida had fewer releases than other states, even those that also had significantly 

fewer releases than the average state. 
F-13

EXHIBIT 9. RELEASE RATES IN CALIFORNIA, ALABAMA, AND FLORIDA OVER TIM E

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

CA

AL

FL

1993: Release 

detection required 

in Alabama

2001: Testing of secondary 

containment components 

required in California
Appendix G

Expert Consultation: Selection and Data Collection Methodology
G-1

Industrial Economics, Inc. (IEc) undertook an expert consultation process to obtain estimates of the likely 

change in confirmed releases as a result of elements of the final regulation. This effort was designed to 

obtain data not available in literature or broad empirical studies, and relied on four independent estimates 

based on expert judgment. 

While this effort is not intended to be a formal expert elicitation, IEc and EPA sought to ensure that the 

process of identifying and consulting experts was transparent and consistent in order to obtain results that 

would be as robust as possible.

This appendix documents the expert consultation process, including the identification of appropriate 

experts, the materials distributed to the participating experts, and documentation of the decision to 

exclude the findings from one of the five experts because his findings could not be internally validated or 

reconciled with EPA’s regulatory baseline.

G.1 Identification and Selection of Experts

The four experts relied upon in this analysis of benefits for the final regulation also provided responses 

for the analysis of benefits of the proposed rule. This section, therefore, describes the initial process of 

identifying and selecting the experts for the analysis of the proposed rule. 

To ensure that experts identified were independent of EPA and represented a range of experiences and 

geographic regions, IEc followed a protocol similar to that used for identifying peer reviewers. 

Specifically, the process involved:

 Development of a master list of potential experts. IEc developed a list of potential experts

based on research of literature, review of published conference proceedings, consultation with 

engineering experts at other firms, and professional experience and contacts. In addition, EPA 

identified experts for consideration; these were included in the list for review but not prioritized. 

In total, IEc compiled a list of thirteen experts.

 Screening review of specific experts. IEc reviewed publicly available information to prioritize 

experts that had multi-state regulatory experience, state-level knowledge of regulation 

implementation, and engineering and inspection expertise. This initial review also flagged 

potential conflicts of interest (e.g., significant work for regulated industry groups) and 

geographic location to ensure distribution. 

 Phone interview and conflict of interest (COI) checks. Based on the screening review, IEc 

contacted seven experts to identify whether they were available, interested in consulting on the 

project, and operating without any specific conflicts of interest (COI). Ultimately five experts 

were available and provided input. Of the remaining two experts, one was unavailable and one 

had near-term work with a company that, while not a specific conflict of interest, would violate a 

contract provision under which IEc operates. Following consultation with the five selected 

experts associated with the proposed rule, IEc excluded the responses from one of the five 

experts because his responses and universe assumptions could not be internally validated or 

reconciled with EPA’s regulatory baseline (see section G.3). As a result, the remaining four 

experts provided responses for the analysis of benefits for this final regulation.

Exhibit G-1 provides a summary of the four experts selected as a result of the process described above. 
G-2

Exhibit G-1: Summary of Experts Selected

Name Affiliation

Potential Conflict of 

Interests Rationale for Selecting Expert

John Kneece Former UST 

Branch Chief with 

South Carolina’s 

Department of 

Health and 

Environmental 

Control

Operator training Worked extensively on UST prevention issues 

while in SC. Was member of the National Work 

Group on Leak Detection Evaluations. Strong 

state regulatory experience in South Carolina; 

Familiarity with specific rule provisions. 

Available. 

Marcel 

Moreau

Marcel Moreau 

Associates

Operator training Conducts training and research and has been an 

expert witness. Strong state regulatory experience 

in Vermont. Familiarity with specific rule 

provisions. Experience with EPA/state regulatory 

requirements, interface. Available.

Marshall 

Mott-Smith

Mott-Smith 

Consulting Group

Represents Steel Tank 

Institute, as well as 

other equipment 

manufacturers

Head of the UST program in Florida for 20 years; 

also active in the national tanks program. Also 

worked with the National Institute for Storage 

Tank Management. Involved in development of 

Florida autopsy data. Noted experience with 

industry, but no current conflict or work relevant 

to specific requirements under proposed 

regulations. Other experience exceptional. 

Currently independent consultant on UST issues. 

Steve Purpora Purpora 

Engineering LLC

Operator training and 

possibly O&M 

requirements

Conducts training and is a consultant. Insurance 

experience helpful; Midwestern location provides 

geographic variation. Multi-state experience in 

leak autopsy.
G-3

G.2 Charge and Follow-Up Questions

To ensure consistent input from each of the experts, IEc provided written charge questions, and a blank, 

formatted spreadsheet to complete as a final product. Exhibits G-2 and G-3 provide the initial materials

given to each expert between December 2012 and March 2013. During the summer of 2013, at the 

request of EPA, IEc provided additional charge questions and blank response sheets. These materials are 

included in Exhibits G-4 and G-5. Responses from the experts are provided in Appendix H.

Note that in addition to the standard charge questions, IEc had at least one follow-up call with each expert 

to consider any areas of significant internal discrepancy and any areas where initial responses were not 

clear. In particular, IEc asked each expert to restate clearly the universe of facilities and releases they 

considered when estimating benefits under each regulatory requirement, to be sure that their responses 

could be accurately applied to only the 5,674 releases confirmed by OUST in its FY 2012 annual report. 

The unique clarifications from each of these calls are incorporated into the exhibits in Appendix H.

Exhibit G-2: Charge for Experts, Submitted December 2012 and March 2013

CHARGE FOR EXPERTS FOR OUST RULEMAKING

INTRODUCTION

Industrial Economics, Inc. (IEc) is assisting EPA’s Office of Underground Storage Tanks’ (OUST) effort to 

evaluate the benefits of several regulatory revisions that are currently under consideration. The revisions are being 

undertaken in two parallel efforts: 

1) EPA is considering implementing certain UST provisions outlined under Subtitle B of Title XV of the 

Energy Policy Act of 2005 – specifically related to operator training requirements and additional 

secondary containment requirements – in Indian Country and in states that do not have State Program 

Approval (SPA); and

2) EPA is also considering targeted changes to the existing UST regulations at 40 CFR 280 to address 

release prevention, release detection, deferrals, and other items.

EPA is evaluating the benefits and costs associated with each proposed regulatory requirement and with the full set 

of proposed changes. EPA first examined options for implementing these changes in 2009; the Agency is now 

considering revisions to the scenarios identified at that time.

The purpose of this charge is to update and revise the 2009 and 2010 independent professional assessments of the 

potential impact of proposed changes on the incidence and severity of UST releases. 
G-4

PROFILE OF CURRENT UST RELEASES

According to the Office of Underground Storage Tanks (OUST)’s 2008 End of Year Activity Report, 7,364 

confirmed releases were identified in 2008 in the U.S. and U.S. territories [5,998 releases in FY2011]. Data from 

23 states indicate that releases from UST systems range in number and potential severity depending on what part 

of the system they come from. Releases from piping and dispenser pans appear to be the most frequent. The table 

below summarizes the distribution of releases by source, extent, and soil/water impact, according to the data 

(which are based on releases discovered between September 1999 and February 2003).

DISTRIBUTION OF UST RELEASES

LOCAL EXTENT LARGE EXTENT

SOURCE SOIL WATER SOIL WATER TOTAL

Piping 12.6% 6.8% 1.4% 10.2% 31.0%

Dispenser 22.9% 3.1% 1.7% 4.3% 32.0%

Tank 4.9% 2.8% 2.8% 5.5% 16.0%

STP Area 2.0% 1.2% 0.0% 0.8% 4.0%

Delivery Problems 9.5% 2.7% 0.3% 3.6% 16.0%

Total 51.9% 16.7% 6.2% 24.3% 99.0%1

Note: 

1. One percent of releases came from other sources, for which data on extent and soil/water 

impact were not available.

INFORMATION REQUEST

Because the proposed regulatory changes address both release prevention and release detection, we are seeking 

your estimates of the national-level impacts of the proposed regulatory requirements on both the incidence and 

severity of confirmed UST releases. In addition, we are interested in how sensitive the expected impacts of each 

requirement are to the regulatory specifications and if any interaction effects might exist between any of the 

proposed requirements. Specifically, we would like you to:

1. Review and, if necessary, update your analysis of the 2010 proposed regulatory requirements. 

Specifically, this is an opportunity to revise assumptions or incorporate new information you have 

received since 2010 that would lead you to revise your original answers. The charge is that you review 

and, if necessary, revise your prior estimates to provide:

 An updated estimate of the number (or percentage) of annual confirmed releases that would be avoided by 

each of the regulatory changes identified; 

 An updated estimate of the change in the severity of an average release that would result from each 

regulatory change (this could be expressed as a change in the average release size, a change in the average 

spill duration, or a change in the percentage of releases that reach groundwater);

 Updates, as necessary, to:

o Document the sensitivity of your estimates to the specific components of each regulatory change 

(i.e., how much impacts would change if the frequency of inspection requirements changes); 

o Document interactions between proposed requirements, such as whether any requirements are 

redundant with each other or whether the efficacy of a requirement depends on the presence of 

another requirement; and 
G-5

o Identify the change in the incidence and severity of releases resulting from the full set of 

proposed requirements when considered together. This ―total‖ estimate would account for any 

interactions and redundancies noted for individual regulatory changes. 

o Finally, for Operator Training and Secondary Containment (under the Energy Policy Act-Related 

Requirements section), we would also like your estimate of the impact of the regulations 

specifically on the approximately 2,500 tanks on Tribal Lands. 

To complete this effort, we will provide you with your original responses in Excel format. We ask that you focus 

your thinking on the specific regulatory changes identified. If you do not have any changes to your previous 

estimate, then you may just notify us that your answers remain unchanged. If you have changes, we anticipate that 

the majority of the new information you provide will be included in this spreadsheet in new columns, but we invite 

you also to provide observations in other formats (e.g., Word). 

Note, consistent with the original task, we seek your estimate of the national-level impact of these regulatory 

changes. This should reflect your institutional knowledge of current practice by industry, and, if relevant, current 

state regulations. For example, if you know that half of all tanks in the U.S. already comply with a requirement, 

then your estimate of the national impact of that regulatory change should reflect the assumption that minimal 

change would occur at these facilities. However, if you do NOT have information about baseline practices or state 

regulations, you may still provide answers, by describing clearly impacts on whatever portion of the population 

you know (e.g., certain types of systems that do not comply with a requirement in the baseline). Please be clear 

about any responses that apply only to certain system or regulatory settings, and we will verify with you our 

interpretation and application of your values as appropriate to the universe of facilities and technologies that we 

have.

Note also that we expect your estimates to reflect your existing institutional knowledge and information that is 

readily available to you; we do not anticipate that your response to this charge will require significant field or 

primary research. Also, while you may contact sources to collect or confirm new data, please do not discuss the 

project or methodology. We have framed this charge as an independent expert opinion and not a collaborative 

effort. 

* Note that Task 1 was completed as of February 2013. *

2. Develop estimates of the impacts of new or revised regulatory requirements developed by EPA in 

2012/2013, and document key assumptions. 

EPA is in the process of revising the standards that were proposed after your prior effort. We seek input on the 

impact of these new revisions.

Consistent with the methods and information outlined in Item 1, we expect to provide you with specific new 

regulatory options, and ask that you provide:

 For each regulatory requirement (or bundle of requirements): 

o An estimate of the percentage of annual confirmed releases, or the number of annual confirmed 

releases, that would be avoided by each of the regulatory changes identified (column [3] of 

response spreadsheet); 
G-6

o An estimate of the change in the severity of an average release that would result from each 

regulatory change (this could be expressed as a change in the average release size, or a change in 

the percentage of releases that reach groundwater) (columns [4] and [5] of response 

spreadsheet);

o Documentation of the sensitivity of your estimates to the specific components of each regulatory 

change (i.e., how much impacts would change if the frequency of inspection requirements 

changes) (column [7] of response spreadsheet); 

o Documentation of interactions between proposed requirements, such as whether any 

requirements are redundant with each other or whether the efficacy of a requirement depends on 

the presence of another requirement (column [8] of response spreadsheet); and 

 Estimates of the change in the incidence and severity of releases resulting from the full set of proposed 

requirements when considered together. This ―total‖ estimate would account for any interactions and 

redundancies noted for individual regulatory requirements. (Row 28 of response spreadsheet.)

 For Operator Training and Secondary Containment (under the Energy Policy Act-Related Requirements 

section), we would also like your estimate of the impact of the regulations specifically on the 

approximately 2,500 tanks on Tribal Lands. (Where noted in column [6] of response spreadsheet.)

 Finally, please describe key assumptions you are making that drive your answer (e.g., assumptions about 

facility size or personnel) or any key uncertainties that would affect your answer. In addition, note any 

other regulatory requirements under consideration (not as part of this proposed rule) that might interact 

with these changes. (column [9] of response spreadsheet)

Note that, consistent with the original task, we seek your estimate of either:

 Option 1 (preferred): The national-level impact of these regulatory changes. This should reflect 

your institutional knowledge of current practice by industry, and, if relevant, current state 

regulations. For example, if you know that half of all tanks in the U.S. already comply with a 

requirement, then your estimate of the national impact of that regulatory change should reflect 

the assumption that minimal change would occur at these facilities. 

OR

 Option 2: The impact on a particular universe that you specify. This option may be relevant if 

you do NOT have information about baseline practices or state regulations. Under this option, 

you should provide answers by describing clearly the impacts on whatever portion of the 

population you know (e.g., certain types of systems that do not comply with a requirement in the 

baseline). Please be clear about any responses that apply only to certain system or regulatory 

settings, and we will verify with you our interpretation and application of your values as 

appropriate to the universe of facilities and technologies that we have.

For budgeting purposes, we expect that EPA will have three requests about specific regulatory requirements 

following your general updates. 

Note also that we expect your estimates to reflect your existing institutional knowledge and information that is 

readily available to you; we do not anticipate that your response to this charge will require significant field or 

primary research. Also, while you may contact sources to collect or confirm new data, please do not discuss the 

project or methodology. We have framed this charge as an independent expert opinion and not a collaborative 

effort.
G-7

Exhibit G-3: Table for Expert Responses Proposed Regulatory Requirement Description of Proposed Regulatory Requirement

Incidence 

Measure

Severity Measures 

(choose at least one)

Sensitivity Question: 

Would results differ if the 

following change were 

made?

Sensitivity Answer

Interaction - is this 

requirement dependent 

on or redundant to other 

requirements?

Comments

Percent 

Reduction in 

Annual Releases 

(or number of 

releases 

avoided)

Reduction In 

The Percentage 

Of Releases 

That Reach 

Groundwater

Percent 

Reduction In 

The Average 

Quantity 

Released

Column [1] [2] [3] [4] [5] [6] [7] [8] [9] Release Prevention

Walkthrough 

inspections

30-day inspections with the following minimum 

components: 

• Spill buckets – open and visually check for any 

damage; remove any liquid or debris; and check 

each fill cap to make sure it is securely on the fill 

pipe (or check before each delivery if deliveries 

less frequent than 30 days)

• Release Detection Systems – make sure system is 

on and operating with no alarm conditions or other 

unusual operating conditions present; ensure 

records of release detection testing are reviewed 

monthly and current

(1) Quarterly 

inspections

(2) Annual inspections

Overfill 

prevention 

equipment 

inspection

Once every three years:

Require inspection to ensure overfill equipment is 

set to activate at the appropriate level in the tank 

and the equipment will activate when the regulated 

substance reaches that height. The inspection must 

be conducted according to a code of practice, 

manufacturer’s instructions or according to the 

implementing agency.

Annual overfill 

prevention equipment 

inspection
G-8

Proposed Regulatory 

Requirement

Description of Proposed 

Regulatory Requirement

Incidence 

Measure

Severity Measures 

(choose at least one)

Sensitivity Question: 

Would results differ if the 

following change were 

made?

Sensitivity Answer

Interaction - is this 

requirement dependent 

on or redundant to other 

requirements?

Comments

Percent 

Reduction in 

Annual Releases 

(or number of 

releases 

avoided)

Reduction In 

The Percentage 

Of Releases 

That Reach 

Groundwater

Percent 

Reduction In 

The Average 

Quantity 

Released

Column [1] [2] [3] [4] [5] [6] [7] [8] [9]

Spill prevention 

equipment testing

Once every three years:

Require testing to ensure spill prevention 

equipment is liquid tight by performing a vacuum, 

pressure or liquid test according to manufacturer's 

requirement or code of practice (does not apply to 

double-walled spill buckets with interstitial 

monitoring)

(1) Annual spill 

prevention equipment 

testing 

(2) Testing of new spill 

prevention equipment 

within 3 years of 

installation and then 

annually afterwards

Containment 

sump testing

Once every three years:

For containment sumps used for piping interstitial 

monitoring, require testing using vacuum, pressure 

or liquid methods (except for double-walled 

containment sumps with interstitial monitoring)

Annual containment 

sump testing

Repairs

Within 30 days of a repair:

• Require spill prevention equipment testing 

after repair to spill prevention equipment

• Require overfill prevention equipment 

inspection after repair to overfill prevention 

equipment

• Require secondary containment testing after 

repair to the secondary containment area for tanks, 

sumps, or piping

Overfill 

prevention 

equipment

• Eliminate flow restrictors as an overfill 

prevention option for new tanks (and when overfill 

prevention equipment is replaced)
G

-9

Proposed Regulatory 

Requirement

Description of Proposed 

Regulatory Requirement

Incidence 

Measure

Severity Measures 

(choose at least one)

Sensitivity Question: 

Would results differ if the 

following change were 

made?

Sensitivity Answer

Interaction - is this 

requirement dependent 

on or redundant to other 

requirements?

Comments

Percent 

Reduction in 

Annual Releases 

(or number of 

releases 

avoided)

Reduction In 

The Percentage 

Of Releases 

That Reach 

Groundwater

Percent 

Reduction In 

The Average 

Quantity 

Released

Column [1] [2] [3] [4] [5] [6] [7] [8] [9]

Replacement of 

lined tanks that 

cannot be 

repaired 

according to a 

code of practice

Require replacement of lined tanks that cannot be 

repaired according to a code of practice

Release Detection

O&M for release 

detection 

equipment

Require annual operation and maintenance tests 

for release detection equipment and containment 

sumps:

• ATG - test alarm; verify system configuration; 

and test battery back-up

• Vacuum pumps and pressure gauges - ensure 

communication with sensors and controller

• Probes and sensors - inspect for residual buildup, 

ensure floats move freely; ensure shaft is not 

damaged; ensure cables are free of kinks, bends, 

and breaks; test communication with controller

• Line leak detector - simulate leak to determine 

capability to detect a leak

• Vapor monitoring - calibrate handheld electronic 

devices; test operability of sensors

• Groundwater monitoring - check handheld bailers 

for functionality; test operability of sensors

• Check tank gauge sticks

• Containment sumps (tank, dispenser, etc.) –

check for any damage, leaks to the containment 

area, or releases to the environment; and remove 

any liquid or debris

Add SIR and 

CITLDS usage

Require SIR and CITLDS users to submit 

quantitative results only (with leak rate)
G-10

Proposed Regulatory 

Requirement

Description of Proposed 

Regulatory Requirement

Incidence 

Measure

Severity Measures 

(choose at least one)

Sensitivity Question: 

Would results differ if the 

following change were 

made?

Sensitivity Answer

Interaction - is this 

requirement dependent 

on or redundant to other 

requirements?

Comments

Percent 

Reduction in 

Annual Releases 

(or number of 

releases 

avoided)

Reduction In 

The Percentage 

Of Releases 

That Reach 

Groundwater

Percent 

Reduction In 

The Average 

Quantity 

Released

Column [1] [2] [3] [4] [5] [6] [7] [8] [9]

Response to 

interstitial 

monitoring 

alarms

Require secondary containment testing in response 

to an interstitial monitoring alarm (if warranted 

after initial investigation)

Groundwater 

monitoring/vapor 

monitoring

Require owners/operators that use this method to 

have a site assessment in accordance with 

280.43(e) or 280.43(f) and maintain the assessment 

as long as they use GW or VP, respectively, as 

their release detection method

Other

Deferrals

Remove release detection deferral for emergency 

generator USTs, assuming they would now be 

required to meet existing regulations(note: 

estimate of roughly 20,000 tanks nationally)

Notification

Require notification to implementing agency by 

owner/operator of ownership change

Require one-time notification for existing FCT and 

AHS systems

Compatibility

O/os storing regulated substances >10% ethanol or 

>20% biodiesel or another substance identified by 

the implementing agency must:

i. demonstrate compatibility through one of the 

following methods: (1) UL listing; (2) 

Manufacturer certification; (3) Another method 

determined by the implementing agency; or

ii. use an UST system that has secondary 

containment with interstitial monitoring
G-11

Proposed Regulatory 

Requirement

Description of Proposed 

Regulatory Requirement

Incidence 

Measure

Severity Measures 

(choose at least one)

Sensitivity Question: 

Would results differ if the 

following change were 

made?

Sensitivity Answer

Interaction - is this 

requirement dependent 

on or redundant to other 

requirements?

Comments

Percent 

Reduction in 

Annual Releases 

(or number of 

releases 

avoided)

Reduction In 

The Percentage 

Of Releases 

That Reach 

Groundwater

Percent 

Reduction In 

The Average 

Quantity 

Released

Column [1] [2] [3] [4] [5] [6] [7] [8] [9] Energy Policy Act-Related Requirements

Operator 

Training

Institute Operator Training as Follows:

• One-time training for Class A operator (technical 

and regulatory) or opt-out test within 30 days of 

assuming duties

• One-time training for Class B operator 

(technical) or opt-out test within 30 days of 

assuming duties.

• One-time training for Class C operator (limited 

technical) prior to assuming duties.

• Re-training for Class A and B operators if the 

facility is determined to be out of compliance. 

Retraining within 30 days of documented noncompliance.

Effects specific to 

Indian country?

Secondary 

Containment

Install secondary containment on piping upon 

replacement. Replacement defined as:

Removal of 50 percent or more of piping, 

excluding connectors, connected to a single 

underground tank. For underground storage tanks 

with multiple piping runs, the replace definition 

applies independently to each piping run.

Effects specific to 

Indian country?

Require secondary containment and interstitial 

monitoring on all tanks and piping installed or 

replaced after effective date of rule

Effects specific to 

Indian country?

Require under-dispenser containment on all new 

dispenser systems

Effects specific to 

Indian country?

TOTAL IMPACTS OF ALL REQUIREMENTS TOGETHER (considering 

any overlaps/interactions you have identified in column [I]):
G-12

Exhibit G-4: Continuation of Charge for Experts

CONTINUATION OF CHARGE FOR EXPERTS FOR OUST RULEMAKING

Industrial Economics, Inc. (IEc) is assisting EPA’s Office of Underground Storage Tanks’ (OUST’s) effort to 

evaluate the benefits of several regulatory revisions that are currently under consideration. This work assignment 

follows up on previous effort to evaluate the benefits of potential regulatory revisions. 

ALTERNATIVE REGULATORY REQUIREMENTS 

In addition to the regulatory requirements considered in the previous tasks, EPA is now considering two alternative 

requirements. As previously, for each of these alternatives, we ask that you provide: 

o An estimate of the percentage of annual confirmed releases that would be avoided by each of the 

regulatory changes identified; 

o An estimate of the change in the severity of an average release that would result from each 

regulatory change (this could be expressed as a change in the average release size, or a change in 

the percentage of releases that reach groundwater);

o Documentation of interactions between proposed requirements (considering the full set of 

requirements provided for the previous task), such as whether any requirements are redundant 

with each other or whether the efficacy of a requirement depends on the presence of another 

requirement; and

o Any other notes to help clarify your assumptions about the requirements and associated 

reductions in releases or groundwater contamination.

The following page includes a table, similar to the Excel version used for earlier tasks, where you may enter your 

responses.

The first of these alternative requirements considers the elimination of groundwater and vapor monitoring as 

release detection methods for UST systems. These methods will be phased out over five years and are assumed to 

be replaced with SIR. 

The second alternative requirement considers documentation of compatibility with fuels >E10 and >B20. Under 

this alternative, documentation requirements remain unchanged from the option presented previously. However, 

owners/operators are also required to maintain equipment records for all new or replaced equipment, for the life of 

that equipment.

Following receipt of your responses, we will ask you to review our calculations using your numbers. As was done 

previously, we will send a summary table of your responses, any adjustments we made, a description of the subset 

of tanks to which we applied your estimates, and the resulting reductions in release frequency and severity. In 

addition, we may follow up on previously submitted responses for clarification purposes.
G-13

Exhibit G-5: Table for Expert Responses – Charge Continuation

Proposed 

Regulatory 

Requirement

Description of Proposed 

Regulatory Requirement

Incidence Measure Severity Measures 

(choose at least one)

Interaction - is 

this requirement 

dependent on or 

redundant to 

other 

requirements?

Comments

Percent Reduction 

in Annual Releases 

(or number of 

releases avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent 

Reduction In The 

Average Quantity 

Released

Groundwater 

monitoring/vapor 

monitoring

Require owners/operators that use 

groundwater and vapor monitoring

for release detection to phase-out use 

of these methods over five years. 

These methods are assumed to be 

replaced with SIR.

Compatibility

O/os storing regulated substances 

>10% ethanol or >20% biodiesel or 

another substance identified by the 

implementing agency must:

i. demonstrate compatibility through 

one of the following methods: (1) UL 

listing; (2) Manufacturer certification; 

(3) Another method determined by 

the implementing agency; or

ii. use an UST system that has 

secondary containment with 

interstitial monitoring. In addition, 

o/os must maintain equipment records 

for the life of all new and replaced 

equipment.
G-14

G.3 Exclusion of Responses from One Expert

While EPA obtained input from five experts in assessing the impacts of the proposed rule, we chose to 

exclude the responses of one expert, for the following reasons:

 Inconsistent internal logic: IEc requested from each respondent an estimate of the total effects of 

the proposed rule in addition to estimates of the effects of individual parts to the proposed rule. 

The analysis then compared the effects of simultaneously applying all individual regulations with 

the separate estimate of the overall effect of the potential rule. This was performed to verify the 

experts’ logic and identify areas of overlap or synergy among the regulatory requirements. The 

results provided by this expert, when applying his unit changes to the universe of confirmed 

releases (see bullet below on universe inconsistencies) indicated an avoided cost of roughly $132 

million when considering rule elements separately. However, his cumulative estimate of impacts 

led to an estimate of over $517 million; representing a difference of over $350 million, and a 

factor of three. Moreover, subsequent discussions with the expert about the source of this 

discrepancy did not resolve it (the expert felt that cumulative impacts should reflect significant 

overlap in individual estimates, suggesting that he believed that they should be lower). However, 

he agreed with IEc’s method and example calculations for interpreting his results.

1

 We have

identified some of the factors that may contribute to this discrepancy. For example, the expert

believes that high-quality operator training is a necessary condition for effective regulations, and it 

is possible that this effect is captured in his statement of total effect, but is not one of the 

regulatory requirements measured, except in Indian country. However, it is not clear how to 

correct for this.

 Alternate universe of releases: The expert estimates that over half of all releases are not 

included in the confirmed releases reported by states, and was unwilling to state that his estimated 

reductions in releases could be scaled to the universe of confirmed releases specified in the charge, 

due to the complexity of the relationship between release and reporting. Specifically, he believes 

confirmed release figures reported by EPA fail to reflect releases that are detected, but are too 

small to report; and releases that go undetected. Further, he believes that some releases that are 

counted as single releases are, in fact, the product of multiple smaller releases. Because of this 

structure of release universe, a relatively small proportional reduction in total releases can lead to a 

relatively large number of avoided releases relative to the universe of confirmed releases. The 

expert was not able to estimate the total number of undetected releases or translate the avoidance 

of undetected or unconfirmed releases into avoidance of confirmed releases. Different options for 

scaling the results were proposed, but he was clear that linear scaling would not be accurate, and 

could not propose an alternative scaling method. As a result, IEc was unable to adjust the 

percentage reductions reported by the expert to apply them to a smaller universe. Without any 

 

1 Note that while his individual estimate of impacts is lower than others provided by other experts, his 

cumulative estimate, which he felt was stronger, is mid-range when applied to the current universe of confirmed 

releases. Overall, if his results were incorporated as proportionate to confirmed releases, the impact on the 

estimated cost savings of the rule would still exceed the estimated costs. However, he felt strongly that it is not 

valid to apply his results to the universe of confirmed releases, and this effort would require making a number of 

other adjustments that would limit which specific regulations could be compared.
G-15

adjustment, his estimates are likely to significantly understate and misrepresent the effect of the 

proposed rule. 

 Specificity of regulatory requirements: The expert specified a number of conditions under 

which his answers would be difficult to apply, and expressed clear recommendations about 

specific requirements that should be included in the regulations. The current regulatory language 

lacks the specificity he recommended on several issues, and he noted that his answers were 

therefore uncertain, though he also noted that in some cases he incorporated conditions into his 

responses. One example is his emphasis on the differential benefits between facultative versus 

finite tests or checks. Facultative tests and checks determine whether equipment operates within 

manufacturer specifications, while finite tests and checks determine whether equipment will 

operate under any circumstances. The proposed rule does not always require facultative tests or 

checks; for example, owners and operators need only ensure that systems are on and operating as 

part of their walkthrough inspections. The expert stated that a system can be operational but not 

effective at alerting owners and about releases, and noted that whole-system testing—in which all 

components of a system are tested at once—is required to ascertain that an UST system’s release 

detection systems are fully operational; that is, testing individual components is not sufficient. His 

argument further extends to operator training, where he argued that training must be recurring, 

hands-on, and performed in a classroom setting to be truly effective. His estimates included 

assumptions incorporating these conditions, which differ from the specific regulatory wording. He 

was not able to give an alternative estimate eliminating these conditions.

 Alternate estimates of repair rates for spill buckets: The expert believes that baseline repair 

rates to spill buckets are extremely low—close to zero—while EPA and the other experts agree

that approximately 75 percent of repairs result in replacement while the remaining 25 percent 

require only repairs. This affects the potential costs and cost savings that could accrue as a result 

of the rule change: replacements are more costly, but they may also result in higher avoided 

releases. The analysis cannot adjust costs to correspond with the estimates given by this expert

without affecting outcomes for the other experts. While a sensitivity analysis could address this 

particular discrepancy, the other integration issues identified above add to the limited use of the 

results.

Finally, the expert expressed input on specific regulatory changes that would be effective, and suggested 

specific changes that would have a material impact on his estimates. While this type of input is extremely 

valuable in a stakeholder process and will be provided to EPA in that context, it complicated IEc’s ability 

to ensure that his results were best estimates. Ultimately, because it was not possible to reconcile these 

inconsistencies without making unfounded assumptions about the universe of releases and the definitions 

provided by the expert, IEc recommended that EPA exclude these responses from the quantitative 

assessment of avoided costs. This expert was not used in the analysis of benefits of the final regulation

for the above reasons.
Appendix H

Expert Consultation: Responses and Interpretation
H-1 

This appendix summarizes the responses EPA received to the questions outlined in 

Appendix G. The questions and responses for each expert are presented in Exhibit H-1. In 

addition to the experts’ responses, the exhibit includes annotations by IEc for the purpose of 

clarifying or interpreting responses. The experts’ responses to both sets of charge questions are 

integrated into the exhibit. 

This appendix also includes a summary of the adjustments made to the experts’ 

responses. These adjustments include the application of reductions to the relevant portions of the 

UST universe, as well as other adjustments made to ensure consistency with cost modeling and 

the intent of proposed requirements. We summarize these adjustments for each expert and each 

regulatory alternative. 

Finally, this appendix includes discussion of the experts’ assumptions about regulatory 

compliance. In order to provide a conservative estimate of net benefits of the final regulation, 

EPA relies on different compliance assumptions for the analyses of costs and benefits. This 

appendix provides additional detail on the potential magnitude of uncertainty introduced by these 

assumptions and the implications for EPA’s policy decision. 
H-2 

Exhibit H-1. Expert Responses 
EXPERT 1 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent 

Reduction In The

Average Quantity

Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - is this r

dependent on or redu

requiremen

Column [1] [2] [3] [4] [5] [6] [7] [8] 

Walkthrough inspections

30-day inspections with the following minimum components: • Spill buckets – open and visually check for any damage; remove any liquid or debris; and check each fill cap to make sure it is securely on the fill pipe (or check before each delivery if deliveries less frequent than 30 days)• Release Detection Systems – make sure system is on and operating with no alarm conditions or other unusual operating conditions present; ensure records of release detection testing are reviewed monthly and current

10% 30% (1) Quarterly inspections

(2) Annual inspections

(1)Quarterly inspections would yield some improvement...I estimate 3% reduction in annual releases and 15% reduction

in releases that reach groundwater (2)Annual inspections would be too little, too late. I expect no significant impact from this option. (For Alt 1, IEc uses previous response for proposed requirement: 15% (releases), 50% (GW))

Dependent on the knowledge and owner/operator and emphasis froagency. For this requirement to bquality of the inspections must be well trained operators and implememphasis on conduct and accuracemphasis, education, and inspect

Overfill prevention equipment inspection

Once every three years:Require inspection to ensure overfill equipment is set to activate at the appropriate level in the tank and the

equipment will activate when the regulated substance reaches that height. The inspection must be conducted according to a code of practice, manufacturer’s instructions or according to the implementing agency.

20% of releases due to deliveries 30% Annual overfill prevention 

equipment inspection

Annual inspections in this area would potentially reduce number of releases during delivery by 30% and reduce impacts to groundwater by 50%

Dependent on the overfill preventinplace and verified by implemencompatible with other UST system suction system piping; single poinand the delivery system being usepumped).

Spill prevention equipment testing

Once every three years:Require testing to ensure spill prevention equipment is liquid tight by performing a vacuum, pressure or liquid test according to manufacturer's requirement or code of practice (does not apply to double-walled spill buckets with interstitial monitoring)

15% small percent of overall 

number that go to GW... don't know specific number (revised on 5-14-13: 15% reduction in releases from spill containment impacting groundwater)

(1) Annual spill prevention equipment testing (2) Testing of new spill prevention equipment within 3 years of installation and then annually afterwards

(1) 40% reduction in releases from this equipment. (2) 30% reduction in releases from this equipment

Containment sump testing

Once every three years:For containment sumps used for piping interstitial monitoring, require testing using vacuum, pressure or liquid methods (except for double-walled containment sumps with interstitial monitoring)

20% reduction in that portion of the population that is tested.

30% reduction in that portion of the population that is tested

Annual containment sump testing

50% and 50% respectively

Within 30 days of a repair:

• Require spill prevention equipment testing after repair to spill prevention equipment

10% from repaired equipment 10% from repaired 

equipment

• Require overfill prevention equipment inspection after repair to overfill prevention equipment no opinion... no opinion • Require secondary containment testing after repair to the secondary containment area for tanks, sumps,

or piping

10% reduction where repairs are done

10% reduction where repairs are done

Replacement of lined tanks that cannot be repaired according to a code of practice

Require replacement of lined tanks that cannot be repaired according to a code of practice

<5% <5% 

O&M for release detection equipment

Require annual operation and maintenance tests for release detection equipment and containment sumps:• ATG - test alarm; verify system configuration; and test battery back-up• Vacuum pumps and pressure gauges - ensure communication with sensors and controller• Probes and sensors - inspect for residual buildup, ensure floats move freely; ensure shaft is not damaged; ensure cables are free of kinks, bends, and breaks; test communication with controller• Line leak detector - simulate leak to determine capability to detect a leak• Vapor monitoring - calibrate handheld electronic devices; test operability of sensors• Groundwater monitoring - check handheld bailers for functionality; test operability of sensors• Check tank gauge sticks• Containment sumps (tank, dispenser, etc.) – check for any damage, leaks to the containment area, or releases to the environment; and remove any liquid or debris

ATG - none Vacuum pumps and pressure gauges, probes and sensors - 5%. 

Line leak detector - none Vapor monitoring - none Groundwater monitoring - none Check tank gauge sticks - none Containment sumps - as much as 50% from secondarily contained systems

50% - Releases that do occur will be much more likely to be discovered before they reach groundwater

Dependent on trained and complioperators and implementing ageneducation, and training.

Add SIR and CITLDS usage Require SIR and CITLDS users to submit quantitative results only (with leak rate) <5% <5%Response to interstitial monitoring alarms Require secondary containment testing in response to an interstitial monitoring alarm (if warranted after initial investigation) 5% <5%

Groundwater monitoring/vapor monitoring

Require owners/operators that use this method to have a site assessment in accordance with 280.43(e) or 280.43(f) and maintain the assessment as long as they use GW or VP, respectively, as their release detection method

<5% <5% 

Groundwater monitoring/vapor monitoring (EPA added line item in July 2013) Require owners/operators that use groundwater and vapor monitoring for release detection to phase-out use 

of these methods over five years. These methods are assumed to be replaced with SIR.

No reduction in number of releases

50% reduction in releases that reach groundwater from systems that currently are monitored using groundwater or vapor monitoring

No 

Deferrals

Remove release detection deferral for emergency generator USTs, assuming they would now be required to meet existing regulations(note: estimate of roughly 20,000 tanks nationally)

5% 5%

Require notification to implementing agency by owner/operator of ownership change none none

Release Detection

Severity Measures 

(choose at least one)

Release Prevention

RepairsOverfill prevention equipment • Eliminate flow restrictors as an overfill prevention option for new tanks (and when overfill prevention equipment is replaced) 10% for new systems and systems with replacement devices 50% in releases due to deliveries

H-3
EXPERT 1 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent 

Reduction In The

Average Quantity

Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - is this r

dependent on or redu

requiremen

Column [1] [2] [3] [4] [5] [6] [7] [8] 

Severity Measures 

(choose at least one)

Require one-time notification for existing FCT and AHS systems

none none 

Compatibility

O/os storing regulated substances >10% ethanol or >20% biodiesel or another substance identified by the implementing agency must:i. demonstrate compatibility through one of the following methods: (1) UL listing; (2) Manufacturer certification; (3) Another method determined by the implementing agency; orii. use an UST system that has secondary containment with interstitial monitoring

15% from this population 50% from this population 

Compatibility (EPA added line item in July 2013)

O/os storing regulated substances >10% ethanol or >20% biodiesel or another substance identified by the implementing agency must:i. demonstrate compatibility through one of the following methods: (1) UL listing; (2) Manufacturer certification; (3) Another method determined by the implementing agency; orii. use an UST system that has secondary containment with interstitial monitoring. In addition, o/os mustmaintain equipment records for the life of all new and replaced equipment.

As much as 50% reduction in releases from systems storing ethanol or biodiesel blends in the proposed ratios...especially in the jurisdictions where the current implementing agencies do not require compatibility documentation.

80% in that population where implementing agencies do not currently require compatibility documentation for the levels of ethanol or biodiesel blends covered under this proposal.

Operator Training

Institute Operator Training as Follows:• One-time training for Class A operator (technical and regulatory) or opt-out test within 30 days of assuming duties• One-time training for Class B operator (technical) or opt-out test within 30 days of assuming duties.

• One-time training for Class C operator (limited technical) prior to assuming duties.

• Re-training for Class A and B operators if the facility is determined to be out of compliance. Retraining 

within 30 days of documented non-compliance.

Many states already require some sort of operator training; in the remaining states, 20%

same Effects specific to Indian 

country?

Initial results in Indian country will be a spike in reported releases and in reported releases to groundwater due to operator knowledge and improved operating and maintenance activities.

Install secondary containment on piping upon replacement. Replacement defined as:Removal of 50 percent or more of piping, excluding connectors, connected to a single underground tank. For underground storage tanks with multiple piping runs, the replace definition applies independently to each piping run.

15% from this population 50% from this population Effects specific to Indian 

country?

Require secondary containment and interstitial monitoring on all tanks and piping installed or replaced after effective date of rule

50% in those states where requirement does not already exist (this is compared to release rate from existing systems in those states. 

50% in those states where requirement does not already exist

Effects specific to Indian country?

Same as expectations from

rest of population. The net result will be systems that contain "leaks" and donot result in releases.

Require under-dispenser containment on all new dispenser systems

80% in those states where requirement does not already exist

80% in those states where requirement does not already exist

Effects specific to Indian country?

Same as expectations fromrest of population. The net result will be systems that contain "leaks" and donot result in releases.

optimiistic 30% close to same... 35% (also 

optimistic) TOTAL IMPACTS OF ALL REQUIREMENTS TOGETHER (considering any overlaps/interactions you have identified in column [I]):

Energy Policy Act-Related Requirements Secondary ContainmentOther

Notification

H-4
EXPERT 2 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent Reduction

In The Average 

Quantity Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - 

dependent 

other 

Column [1] [2] [3] [4] [5] [6] [7] 

Walkthrough inspections

30-day inspections with the following minimum components: • Spill buckets – open and visually check for any damage; remove any liquid or debris; and check each fill cap to make sure it is securely on the fill pipe (or check before each delivery if deliveries less frequent than 30 days)• Release Detection Systems – make sure system is on and operating with no alarm conditions or other unusual operating conditions present; ensure records of release detection testing are reviewed monthly and current

This might reduce the severity of releases, but I don't see it having much effect in terms of reducing the number of releases. Maybe 2 or

3 percent in terms of releases avoided. This would be limited to incidents where the damage to a spill bucket was noted (and repair conducted) before the next deliverythat included some amount of spillage into the spill bucket. Also, omitting dispenser inspections reduces effectiveness of inspectionsconsiderably. Monthly checking of release detection is the current requirement (unless I'm missing something here), so I don't see this improving anything over the status quo.

There is tremendous geographic variability in the depth to groundwater (Florida versus Kansas, for

example), so I won't venture any estimates in this column.

Lots of variables to consider here. How often deliveries occur, how soon

after a defective spill bucket is noticed before itgets replaced, and how effective is a visual inspection in detecting spill bucket problems. Overall I'd say 25 % reduction in spill bucket releases as compared to the status quo where inspections are infrequent to nonexistent. I don't see any reduction stemming from the monthly inspection of leakdetection equipment because this is supposed to be occurring already. And this measure does nothing to address dispenser and related piping releases.

(1) Quarterly inspections(2) Annual inspections

Reducing spill bucket inspection frequency to quarterly or annually would reduce effectiveness to something approaching zero. With regard to leak detection inspection, this would be less than the current requirement. (For Alt 1, IEc uses previous response for proposed requirement: 1% (releases), 70-80% (GW))

II don't see much 

Overfill prevention equipment inspection

Once every three years:Require inspection to ensure overfill equipment is set to activate at the appropriate level in the tank and the equipment will activate when the regulated substance reaches that height. The inspection must be conducted according to a code of practice, manufacturer’s instructions or according to the implementing agency.

Minimal. Maybe 1%. Minimal. Maybe 1%. Annual overfill prevention 

equipment inspection

Annual inspections would help improve effectiveness somewhat, perhaps to 5% reduction in releases. (in both number and quantity of releases, update 5-17-13)

I don't see much 

Spill prevention equipment testing

Once every three years:Require testing to ensure spill prevention equipment is liquid tight by performing a vacuum, pressure or liquid test according to manufacturer's requirement or code of practice (does not apply to double-walled spill buckets with interstitial monitoring)

Life expectancy of spill buckets is short (say 5 years) and deliveries are frequent (every few days). Testing every three years is not enough to detect problems before they occur. Reduction might be 5 to 10 %.

Reduction in quantitiy released would be 5 to 10 %. This would be due to detection of defects that are not readily observable during the visual inspection.

(1) Annual spill prevention equipment testing (2) Testing of new spill prevention equipment within 3 years of installation and then annually afterwards

Annual inspections would improve effectiveness significantly. Testing within 3 years of installation and annually thereafter would be a good compromise position, but then you have to track the installation date of the spill bucket. Annual testing might reduce the number of incidents by 25% and the quantity released by 30 to 40 % because of earlier detection. (Added 5-17-13: Not beginning the testing until 3 years after install would decrease effectiveness only a bit because I assume most spill buckets will last three years before they leak, so the number of

incidents might be reduced by 20% and the quantity by 25%. But I would emphasize that tracking the age of spill buckets is not currently done and will pose substantial headaches for both regulators and tank owners.)

No significant int

Containment sump testing

Once every three years:For containment sumps used for piping interstitial monitoring, require testing using vacuum, pressure or liquid methods (except for double-walled containment sumps with interstitial monitoring)

30% of piping related releases. I include STPs as part of the piping for purposes of this estimate but not dispensers. If dispenser sumps are not to be tested, this is a big hole in the program and many dispenser leaks will not be detected

because the dispenser sumps are not liquid tight. (50-60% if dispenser sumps are tested; follow up phone call 4/4/13)

30% of all piping and STP related releases. Many dispenser releases will go undetected. (50-60% if dispenser sumps are tested; follow up phone call 4/4/13)

Annual containment sump testing

Annual testing would improve performance as testing data show 10% failure rate per year. Annual testing would improve performance in terms of detecting releases and reducing the volume released to 60%.

Within 30 days of a repair:

• Require spill prevention equipment testing after repair to spill prevention equipment

This is good protocol to follow, but I don't think many releases will be avoided. Repair could be anything from replacing a leaky drain valve in a spill bucket (which would have no effect on environmental releases

because the leaky valve drains into the tank) to inserting new, smaller spill bucket inside the old one (which definitely should be tested but is not likely to stay liquid tight for very long). I don't have any information on which to base an opinion here. 

Testing after a repair is good protocol to follow, but I don't have any basis for an opinion here.

Severity Measures 

(choose at least one)

Release Prevention

H-5
EXPERT 2 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent Reduction

In The Average 

Quantity Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - 

dependent 

other 

Column [1] [2] [3] [4] [5] [6] [7] 

Severity Measures 

(choose at least one)

• Require overfill prevention equipment inspection after repair to overfill prevention equipment

Overfill prevention equipment is replaced rather than repaired. When replaced, it should be inspected as part of the installation procedure. I don't see this as having any measurable effect on the number of releases avoided.

I don't see this as having any measurable effect on the quantity of product released.

• Require secondary containment testing after repair to the secondary containment area for tanks, sumps, or piping

Tightness testing after repairs to any secondary containment component is a critical part of any repair. In the currently proposed scenario, only piping sumps would get tested, so they are likely the only secondary containment component that will ever see any repair activity. This will limit the number of releases avoided to perhaps 30% of all piping related releases. (50% if dispenser sumps are tested; follow up phone call 4/4/13)

Because this is only likely to affect piping sumps, the effect will be limited. 

Quantity released might be reduced by 20%. (50% if dispenser sumps are tested; follow up phone call 4/4/13)

The effectiveness be limited by the for dispenser sumcontained piping. not tested, they (because defects so the issue of poever come up. Mcomponents, coutesting, would bo

type of requiremor 90% reduction releases from sec

Replacement of lined tanks that cannot be repaired according to a code of practice

Require replacement of lined tanks that cannot be repaired according to a code of practice

5% among the lined tank population. 

5% among releases from lined tanks

O&M for release detection equipment

Require annual operation and maintenance tests for release detection equipment and containment sumps:• ATG - test alarm; verify system configuration; and test battery back-up• Vacuum pumps and pressure gauges - ensure communication with sensors and controller• Probes and sensors - inspect for residual buildup, ensure floats move freely; ensure shaft is not damaged; ensure cables are free of kinks, bends, and breaks; test communication with controller• Line leak detector - simulate leak to determine capability to detect a leak• Vapor monitoring - calibrate handheld electronic devices; test operability of sensors• Groundwater monitoring - check handheld bailers for functionality; test operability of sensors• Check tank gauge sticks• Containment sumps (tank, dispenser, etc.) – check for any damage, leaks to the containment area, or releases to the environment; and remove any liquid or debris

This is an attempt to improve leak detection rather than leak prevention, so the number of releases should not be affected. The quantity of releases should be reduced.

25%. No solid basis for this number. Just a sense that the duration of releases should be reduced if leak detection equipment is functional.

Add SIR and CITLDS usage Require SIR and CITLDS users to submit quantitative results only (with leak rate)

Negligible effect. Less than 1%. Negligible effect, Less 

than 1%

RepairsOverfill prevention equipment • Eliminate flow restrictors as an overfill prevention option for new tanks (and when overfill prevention equipment is replaced)

5%. 5% This requirement 

overfill preventiorequirement. If tinspected, no one 

float is working onever be replace

H-6
EXPERT 2 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent Reduction

In The Average 

Quantity Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - 

dependent 

other 

Column [1] [2] [3] [4] [5] [6] [7] 

Severity Measures 

(choose at least one)

Response to interstitial monitoring alarms

Require secondary containment testing in response to an interstitial monitoring alarm (if warranted after initial investigation)

I'm assuming that "if warranted" means any type of liquid (fuel or water) is found in the sump as opposed to an alarm due to some sensor malfunction. This would point to a lack of integrity that would need to be investigated by testing and then presumably repaired. I think this could be very

effective in reducing releases because it would gradually improve the quality of existing containment and reduce the water intrusion problems that cause "false" alarms and that result in operators ignoringalarms. I'd say a 60% reduction in releases from systems with secondary containment. I think the reduction could be even higher except that a number of owners arelikely to switch to another method of leak detection (line leak detector + testing) rather than go to the expense of testing and repairing their secondary containment.

The quantity released from UST systems with secondary containment could be reduced by 75%

This requirement containment sumonly tested every then this is a goosumps that are shissues.

Groundwater monitoring/vapor monitoring

Require owners/operators that use this method to have a site assessment in accordance with 280.43(e) or 280.43(f) and maintain the assessment as long as they use GW or VP, respectively, as their release detection method

There are very few UST systems using these methods of leak detection, so effects will be minimal on the national scale, but might be effective in getting those who are using this method to use something else. I'd say 50% reduction in releases among users of groundwater or soil vapor monitoring.

50% reduction in quantity released from those systems using these methods of leak detection.

This requirement the rule, except the assessment mthe proposed rev

Groundwater monitoring/vapor monitoring (EPA added line item in July 2013)

Require owners/operators that use groundwater and vapor monitoring for release detection to phase-out 

use of these methods over five years. These methods are assumed to be replaced with SIR.

This is replacing one leak detection method by another leak detection method. This will not reduce the number of releases, just hopefully have the releases detected sooner.

Because groundwater monitoring only applies when the depth to groundwater is 20 feet or less, I don't believe the percentage of releases reaching groundwater will change for this method because you aren't going to detect the release soon

enough to keep the contaminant out of the groundwater. At places where soil vapor monitoring is in use, groundwater will likely be deeper, but I really don't have enough information to say whether a switch toSIR will better protect groundwater at these locations.

Groundwater monitoring as defined in the federal rule is pretty worthless. Soil vapor monitoring had potential to be an excellent leak detection method, but as defined in the federal rule, it is pretty useless as well. SIR also has great potential as a leak detection method, but it is cursed with an inadequate evaluation protocol. In the end, I might expect for SIR to yield a slight improvement over groundwater or soil vapor monitoring, reducing the quantity released by 10 percent. 

Ideally this requi

substantial improevaluated so inefbe weeded out, bof the regulatory the SIR reporting under consideratimprovement ovenearly enough to a leak detection 

Deferrals

Remove release detection deferral for emergency generator USTs, assuming they would now be required to meet existing regulations(note: estimate of roughly 20,000 tanks nationally)

This would not reduce the number of releases, only detect them sooner and presumably reduce the quantity released. 

Amount released from emergency generator systems that do not currently have leak detection could be reduced by 75% or more. My sense is a great many generator systems already have release detection, so

the overall effect might be 20% reduction in terms of ALL generator systems.

How does this req2005 Energy Act? secondary contaiEnergy Act, does tanks would need contained? 

Require notification to implementing agency by owner/operator of ownership change

0% 0% 

Release Detection

H-7
EXPERT 2 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent Reduction

In The Average 

Quantity Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - 

dependent 

other 

Column [1] [2] [3] [4] [5] [6] [7] 

Severity Measures 

(choose at least one)

Require one-time notification for existing FCT and AHS systems

0% 0% 

Compatibility

O/os storing regulated substances >10% ethanol or >20% biodiesel or another substance identified by the implementing agency must:i. demonstrate compatibility through one of the following methods: (1) UL listing; (2) Manufacturer certification; (3) Another method determined by the implementing agency; orii. use an UST system that has secondary containment with interstitial monitoring

The number of existing tanks that fit into this category is pretty small and I have no direct experience with them, so I really can't put a percentage on this. Plus it will depend on how many USTs end up containing these higher levels of ethanol or biodiesel as time goes on. Ethanol continues to be a controversial additive so my crystal ball is very fuzzy as to how much ethanol is in our fuel future. (Email 8/30: use numerical responses given for new compatibility line item for this item as well)

The number of existing tanks that fit into this category is pretty small and I have no direct experience with them, so I really can't put a percentage on this. Plus it will depend on how many USTs end up containing these higher levels of ethanol or biodiesel as time goes on. (Email 8/30: use numerical responses given for new compatibility line item for this item as well)

Compatibility is aThis just spells ocompatibility, so 

Compatibility (EPA added line item in July 2013)

O/os storing regulated substances >10% ethanol or >20% biodiesel or another substance identified by the implementing agency must:i. demonstrate compatibility through one of the following methods: (1) UL listing; (2) Manufacturer certification; (3) Another method determined by the implementing agency; orii. use an UST system that has secondary containment with interstitial monitoring. In addition, o/os mustmaintain equipment records for the life of all new and replaced equipment.

Limiting the UST population affected by this requirement to those USTs that might contain these

fuels, and assuming that the EPA policy of June 2011 has had some effect in getting UST onwers to think about compatibility issues, I think the percentage reduction of releases would be fairly modest, say around 20 percent for those USTs storing these fuels.

Because there are a lot of variables that determine whether a release will reach groundwater, I think I'll steer clear of this

question.

Limiting this question to those releases that are due exclusively to some type of incompatibility, then the reduction theoretically should be close to 100 percent. However, given that there

are likley to be some compatibility surprises (things that were thought to be compatible but were not) and the difficulty of identifying every component of an existing UST system that might have compatibility issues, the percentage reduction will be somewhat less, say in the realm of 80 percent.

This proposal treconfusing the comdetection issues better method of compensate for iyou really want ta steel tank, regahas?? At the very ethanol or biodieUSTs is going to rsensors installed compatible with alarms will never piping leak can oLine leak detectocompatible with my vote is againscontainment with decision is made proposal, then thmust have a UL licertification for t

Operator Training

Institute Operator Training as Follows:• One-time training for Class A operator (technical and regulatory) or opt-out test within 30 days of assuming duties• One-time training for Class B operator (technical) or opt-out test within 30 days of assuming duties.• One-time training for Class C operator (limited technical) prior to assuming duties.• Re-training for Class A and B operators if the facility is determined to be out of compliance. Retraining within 30 days of documented non-compliance.

This will not reduce the number of releases. Hopefully, the quantity released will be reduced because of

improved operator behavior when the alarm sounds.

I'm pretty pessimistic that training is going to change

operator behavior by much. I'd say release quantity would only be reduced 5 to 10%.

Effects specific to Indian country?

I don’t know that operators in Indian Country are any better or worse than operators elsewhere. I don’t expect that the effects of the training would be significantly different.

Training could be operators of the this document, ewho are already this training afteof compliance anretrained. Doesnme.

Install secondary containment on piping upon replacement. Replacement defined as:

Removal of 50 percent or more of piping, excluding connectors, connected to a single underground tank. For underground storage tanks with multiple piping runs, the replace definition applies independently to each piping run.

Getting to secondary containment would be helpful in avoiding releases, but we'll be a long time getting there with this definition. I'll replace 49% of my piping this year and 49% next year and still have single-wall piping. Not many people currently replace half a piping run, but this rule will encourage this approach to avoiding

secondary containment. In the short term I see perhaps a 5% reduction in piping releases. Over the long term (20+ years) this would gradually increase to a 50 to 60% reduction in piping releases.

In the short term, a 10 to 20% reduction in volume released from piping. In the long term (20+ years) perhaps 75% reduction in piping releases.

Effects specific to Indian country?

I don't have any basis for expecting things to be any different in Indian Country than elsewhere.

Related Requirements Other

Notification

H-8
EXPERT 2 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent Reduction

In The Average 

Quantity Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - 

dependent 

other 

Column [1] [2] [3] [4] [5] [6] [7] 

Severity Measures 

(choose at least one)

Require secondary containment and interstitial monitoring on all tanks and piping installed or replaced aftereffective date of rule

Small effect initially because transition to secondary containment

will be slow - say a couple percent. Over several decades should be able to reduce number of releases by 80 to 90 percent - if containment is properly installed and operated.

Small effect initially because transition to secondary containment will be slow - say a couple

percent. Over several decades should be able to reduce the volume of releases by 80 to 90 percent - if containment is properly installed and operated.

Effects specific to Indian country?

Should be the same in Indian Country as elsewhere. 

Success of this mdependent on oththat all componecontainment are and throughout tUST system, 2) aoperational, and do when the alarmeasures is addrethese proposed ccompletely as I w

Require under-dispenser containment on all new dispenser systems

Small effect initially because transition to secondary containment

will be slow - say a couple percent. Over several decades should be able to reduce number of dispenser releases by 80 to 90 percent - if containment is properly installed and operated.

Small effect initially because transition to secondary containment will be slow - say a couple

percent. Over several decades should be able to reduce the volume of dispenser releases by 80 to 90 percent - if containment is properly installed and operated.

Effects specific to Indian country?

Should be the same in Indian Country as elsewhere. 

Success of this mdependent on oththat dispenser suinstallation and tlife of the UST sydetecton sensors sumps (not just ioperational, and do when the alarmeasures is addrethese proposed ccompletely as I w

I don't see any silver bullets here that are going to solve the release problem overnight. I see a continuing decrease in releases, primarily due to gradual transition to secondary containment. I would estimate reduction in releases of a few percent per year to a point where we have 80 to 90 percent fewer releases than we now have at

some point 20 to 30 years down the road. This assumes all the measures described here achieve an80 to 90% compliance rate.

As for the number of releases, I see a continuing decrease in the

volume of releases, primarily due to gradual transition to secondary containment. I would estimate reduction in releases of a few percent per year to a point where we have 80 to 90 percent reduction in the volume ofreleases than we now have at some point 20 to 30 years down the road. This assumes the all the measures described here achieve an 80 to 90% compliance rate.

All measures that containment of abuckets, dispenseperiodically testisecondary contaiverifying the opesensors, and 4) gin a timely and a

will eventually brreduction in the releases.

TOTAL IMPACTS OF ALL REQUIREMENTS TOGETHER (considering any overlaps/interactions you have identified in column [I]):

Energy Policy Act-

Secondary Containment

H-9
EXPERT 3 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent 

Reduction In 

The Average 

Quantity 

Released

Sensitivity 

Question: Would 

results differ if the 

following change 

were made?

Sensitivity Answer

Interaction - is this 

requirement 

dependent on or 

redundant to other 

requirements?

Column [1] [2] [3] [4] [5] [6] [7] [8] 

Walkthrough inspections

30-day inspections with the following minimum components: • Spill buckets – open and visually check for any damage; remove any liquid or debris; and check each fill cap to make sure it is securely on the fill pipe (or check before each delivery if deliveries less frequent than 30 days)• Release Detection Systems – make sure system is on and operating with no alarm conditions or other unusual operating conditions present; ensure records of release detection testing are reviewed monthly and current

1. 50% for spill bucket checks; 2. 40% for release detection 

1. 35% for SB checks; 2.

25% for RD reviews

1. 45% for SB checks; 2. 35% for RD reviews

(1) Quarterly inspections(2) Annual inspections

1. 10% increase in discharges from monthly;

2. 30% increase in discharges from monthly (For Alt 1, IEc uses previous response for proposed requirement: 60%, 30%, 20%, 1%, 2%, 40% (releases, associated with spill buckets, sumps, dispensers, monitoring/observation wells, impressed current rectifiers, and RD systems, respectively); 40%, 15%, 10%, 1%, 1%, 25% (GW, associated with same components))

Neither dependent or redundant

to other requirements. This requirement alone will have a significant reduction on the number and severity of releases.

This requiremento include at leashort amount of prevent small prcorrosion exacer

least quarterly v

Overfill prevention equipment inspection

Once every three years:Require inspection to ensure overfill equipment is set to activate at the appropriate level in the tank and the equipment will activate when the regulated substance reaches that height. The inspection must be conducted according to a code of practice, manufacturer’s instructions or according to the implementing agency.

15% 10% 15% Annual overfill prevention 

equipment inspection

20% (phone call 5/15/13: sensitivity responses are given for annual releases,

but relationship to GW avoidance will stay the same as in original answers--i.e., GW reductions are usually 5% less than release reductions)

Neither dependent or redundant

to other requirements.

This requiremendetection deviceto prevent overfflapper valves.

Spill prevention equipment testing

Once every three years:Require testing to ensure spill prevention equipment is liquid tight by performing a vacuum, pressure or liquid test according to manufacturer's requirement or code of practice (does not apply to doublewalled spill buckets with interstitial monitoring)

30% 25% 30% (1) Annual spill prevention 

equipment testing (2) Testing of new spill prevention equipment within 3 years of installation and then annually afterwards

1. 50% for annual 2. 45% (phone call 5/15/13: sensitivity responses are given for annual releases, but relationship to GW avoidance will stay the same as in original answers--i.e., GW reductions are usually 5% less than release reductions)

Neither dependent or redundant

to other requirements.

Item (2) in the Shave "infant mothree years. Otperformed with 

Containment sump testing

Once every three years:For containment sumps used for piping interstitial monitoring, require testing using vacuum, pressure or

liquid methods (except for double-walled containment sumps with interstitial monitoring)

2% 2% 2% Annual containment sump 

testing

3% Neither dependent or redundant

to other requirements.

Leaking sumps acomponents, bu

Within 30 days of a repair:

• Require spill prevention equipment testing after repair to spill prevention equipment

25% 10% 20% Neither dependent or redundant

to other requirements.

Common sense. 

• Require overfill prevention equipment inspection after repair to overfill prevention equipment 10% 5% 10% Neither dependent or redundant

to other requirements

It should be test

• Require secondary containment testing after repair to the secondary containment area for tanks, sumps, or piping

3% 1% 2% Neither dependent or redundant

to other requirements.

It should be test

Replacement of lined tanks that cannot be repaired according to a code of practice

Require replacement of lined tanks that cannot be repaired according to a code of practice

50% 40% 50% Neither dependent or redundant

to other requirements.

These reduction

O&M for release detection equipment

Require annual operation and maintenance tests for release detection equipment and containment sumps:• ATG - test alarm; verify system configuration; and test battery back-up• Vacuum pumps and pressure gauges - ensure communication with sensors and controller• Probes and sensors - inspect for residual buildup, ensure floats move freely; ensure shaft is not damaged; ensure cables are free of kinks, bends, and breaks; test communication with controller• Line leak detector - simulate leak to determine capability to detect a leak• Vapor monitoring - calibrate handheld electronic devices; test operability of sensors• Groundwater monitoring - check handheld bailers for functionality; test operability of sensors• Check tank gauge sticks• Containment sumps (tank, dispenser, etc.) – check for any damage, leaks to the containment area, or

releases to the environment; and remove any liquid or debris

1. 15% 2. 2% 3. 5% 4. 15% 

5. 1% 6. 1% 7. 1% 8. 10% 

1. 10% 2. 1% 3. 4% 4. 12% 5. <1% 6. <1% 7. <1% 8. 8% 

1. 12% 2. 1% 3. 4% 4. 15% 5. <1% 6. <1% 7. <1% 8. 10% 

Neither dependent or redundantto other requirements.

These are all gothe most benefithey are hard to 5/16/13: Reducsystems, functiomaintenance fin

Add SIR and CITLDS usage Require SIR and CITLDS users to submit quantitative results only (with leak rate)

25% 20% 25% Neither dependent or redundant

to other requirements.

SIR continues to Better requiremimportant.

Severity Measures 

(choose at least one)

Overfill prevention equipment

5%

Repairs

• Eliminate flow restrictors as an overfill prevention option for new tanks (and when overfill 

prevention equipment is replaced)

10% Neither dependent or redundant

to other requirements.

Release Prevention

5%

H-10
EXPERT 3 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent 

Reduction In 

The Average 

Quantity 

Released

Sensitivity 

Question: Would 

results differ if the 

following change 

were made?

Sensitivity Answer

Interaction - is this 

requirement 

dependent on or 

redundant to other 

requirements?

Column [1] [2] [3] [4] [5] [6] [7] [8] 

Severity Measures 

(choose at least one)

Response to interstitial monitoring alarms

Require secondary containment testing in response to an interstitial monitoring alarm (if warranted after initial investigation)

1% <1% <1% Dependent on interstitial 

monitoring

Routine testing a problem than failing. If there problem with an the problem is cbecause if there 

what kind of liqafter the repairs

Groundwater monitoring/vapor monitoring

Require owners/operators that use this method to have a site assessment in accordance with 280.43(e) or 280.43(f) and maintain the assessment as long as they use GW or VP, respectively, as their release detection method

5% 5% 5% Neither dependent or redundant

to other requirements.

Not a bad idea. 

wells to detect a soils that is certestimates; i.e., 

Groundwater monitoring/vapor monitoring (EPA added line item in July 2013)

Require owners/operators that use groundwater and vapor monitoring for release detection to phaseout use of these methods over five years. These methods are assumed to be replaced with SIR.

Less than one percent Less than one percent. 

No significant reduction in severity.

One percent Not dependent on or redundant 

to other requirements. People will choose other method of monitoring their single-wall tanks

This requiremengroundwater. Lemethod to begin Notes: Eliminatia great idea. Hobecause less thamethod of releaand a new releaseasonally and phave been subjeAdditionally, it ileak, the “horse caused damage improperly instaFor example, threlease to the mline...most peopmakes good sensreduce the numb

Deferrals

Remove release detection deferral for emergency generator USTs, assuming they would now be required to meet existing regulations(note: estimate of roughly 20,000 tanks nationally)

40% 30% 35% Neither dependent or redundant

to other requirements.

This will close a 

Require notification to implementing agency by owner/operator of ownership change

1% 1% 1% Neither dependent or redundant

to other requirements.

No significant po

Require one-time notification for existing FCT and AHS systems

3% 3% 3% Neither dependent or redundant

to other requirements.

Not many of themake more infor

Compatibility

O/o's storing regulated substances >10% ethanol or >20% biodiesel or another substance identified by the implementing agency must:i. demonstrate compatibility through one of the following methods: (1) UL listing; (2) Manufacturer certification; (3) Another method determined by the implementing agency; orii. use an UST system that has secondary containment with interstitial monitoring

20% 15% 20% Neither dependent or redundant

to other requirements.

I strongly concur great cost to owsystems, and thaGASOLINE. (Bene

Compatibility (EPA added line item in July 2013)

O/os storing regulated substances >10% ethanol or >20% biodiesel or another substance identified by the implementing agency must:i. demonstrate compatibility through one of the following methods: (1) UL listing; (2) Manufacturer certification; (3) Another method determined by the implementing agency; orii. use an UST system that has secondary containment with interstitial monitoring. In addition, o/os mustmaintain equipment records for the life of all new and replaced equipment.

Less than one percent (for all scenarios)

Less than one percent (for all scenarios)

One percent (for all scenarios)

Not dependent on or redundant to other requirements (for all scenarios)

Another good idseverity of releaThis is another gto the environmalternative fuel prove a direct cthousands of rus

that appear to bobservations of been retained w10! Systems witapplies to biodieManufacturer ceor ii. use an UST have little effecUL-listed equipmand product liabbeen field fabricreleases, but moif they probably gasoline or diesedouble-wall systbiodiesel were ntank systems insHowever, the repaperwork for thbenefit for this arequirement, bu

Operator Training

Institute Operator Training as Follows:• One-time training for Class A operator (technical and regulatory) or opt-out test within 30 days of 

assuming duties• One-time training for Class B operator (technical) or opt-out test within 30 days of assuming duties.

• One-time training for Class C operator (limited technical) prior to assuming duties.

• Re-training for Class A and B operators if the facility is determined to be out of compliance. Retraining within 30 days of documented non-compliance.

1. 20% 2. 20% 

3. 15% 4. 5%

1. 15% 

2. 15% 3. 10% 4. 5%

1. 20% 

2. 20% 3. 15% 4. 5%

Effects specific to Indian country?

Why should they be treated differently? I do not believe the effects will be any different than

they are for facilities that are not in Indian Country

Neither dependent or redundant

to other requirements.

Operator Traininhave trained ovelasts at least a hspecific, and theability to retest Operator C onlinof the rule. I dohave changed si

s Other

Notification

Release Detection

H-11
EXPERT 3 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent 

Reduction In 

The Average 

Quantity 

Released

Sensitivity 

Question: Would 

results differ if the 

following change 

were made?

Sensitivity Answer

Interaction - is this 

requirement 

dependent on or 

redundant to other 

requirements?

Column [1] [2] [3] [4] [5] [6] [7] [8] 

Severity Measures 

(choose at least one)

Install secondary containment on piping upon replacement. Replacement defined as:

Removal of 50 percent or more of piping, excluding connectors, connected to a single underground tank. For underground storage tanks with multiple piping runs, the replace definition applies independently to each piping run.

50% 40% 50% Effects specific to Indian 

country?

Why should they be treated differently? I do not believe the effects will be any different than

they are for facilities that are not in Indian Country

Neither dependent or redundant

to other requirements.

Many states havminimizing the r

Require secondary containment and interstitial monitoring on all tanks and piping installed or replaced after effective date of rule

50% 40% 50% Effects specific to Indian 

country?

Why should they be treated differently? I do not believe the effects will be any different than

they are for facilities that are not in Indian Country

Neither dependent or redundant

to other requirements.

Florida now has is less and dischto minimize leak

Require under-dispenser containment on all new dispenser systems

15% 10% 15% Effects specific to Indian 

country?

Why should they be treated differently? I do not believe the effects will be any different than

they are for facilities that are not in Indian Country

Neither dependent or redundant

to other requirements.

I've increased m

70% 65% 70% All of my respon

these changes wpercentages will overfill a doublealternative fuels Nevertheless, thgroundwater and 

TOTAL IMPACTS OF ALL REQUIREMENTS TOGETHER (considering any overlaps/interactions you have identified in column [I]):

Energy Policy Act-Related Requirements

Secondary Containment

H-12
EXPERT 4 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent 

Reduction In The

Average Quantity

Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - is this r

dependent on or redu

requiremen

Column [1] [2] [3] [4] [5] [6] [7] [8] 

Walkthrough inspections

30-day inspections with the following minimum components: • Spill buckets – open and visually check for any damage; remove any liquid or debris; and check each fill cap to make sure it is securely on the fill pipe (or check before each delivery if deliveries less frequent than 30 days)• Release Detection Systems – make sure system is on and operating with no alarm conditions or other unusual operating conditions present; ensure records of release detection testing are reviewed monthly and current

50% (revised to 40% in states not already implementing, phone call 4.29.13)

40% 40% (1) Quarterly inspections

(2) Annual inspections

1) Yes to 30% 2) 20% (Email 5/23/13: same for GW as for releases) (For Alt 1, IEc uses response for

proposed requirement: 50% (releases), 40% (GW), email 8/20/13)

YES with the Annual testing Requisystems A Montlhly Walk Thru wouclose to the 65% range of stopping needs these parts tested. The parDetection THIS NEEDS A CORRECIVyou have in Sumps, If Alarm exists all Alarms" It says check but not wBuckets it says "Remove any Liqui

Overfill prevention equipment inspection

Once every three years:Require inspection to ensure overfill equipment is set to activate at the appropriate level in the tank and the

equipment will activate when the regulated substance reaches that height. The inspection must be conducted according to a code of practice, manufacturer’s instructions or according to the implementing agency.

30% (specific to states not already implementing, phone call 4.29.13)

30% 30% Annual overfill prevention 

equipment inspection

65% (Email 5/23/13: this number applies only to releases; use 45% for GW reduction) (email 8/20/13: revised to 35% (frequency) and 25% (GW) to make reductions more realistic when combined with other requirements)

Yes with Inpsections they go hand 

Spill prevention equipment testing

Once every three years:Require testing to ensure spill prevention equipment is liquid tight by performing a vacuum, pressure or liquid test according to manufacturer's requirement or code of practice (does not apply to double-walled spill buckets with interstitial monitoring)

30% (revised to 25% in states not already implementing, phone call 4.29.13)

20% 20% (1) Annual spill prevention 

equipment testing (2) Testing of new spill prevention equipment within 3 years of installation and then annually afterwards

1) 65% 2)60% (Email 5/23/13: this number applies only to releases; use 45% and 40% for GW reductions in 1 and

2) (Email 8/20/13: revised annual reductions to 30% (frequency) and 25% (GW) to make reductions more realistic when combined with other requirements. IEc did not ask for reconsideration of sensitivity question 2.)

Goes well with Montlh Inspections 

Containment sump testing

Once every three years:For containment sumps used for piping interstitial monitoring, require testing using vacuum, pressure or liquid methods (except for double-walled containment sumps with interstitial monitoring)

15-18% 30% Annual containment sump 

testing

60% (Email 5/23/13: this number applies only to releases; use 40% for GW reduction)

Within 30 days of a repair:

20% (but use specific #s below, phone call 4/9/13)

30% (but use specific #s below, phone call 4/9/13)

• Require spill prevention equipment testing after repair to spill prevention equipment 23-28% 0%• Require overfill prevention equipment inspection after repair to overfill prevention equipment 29% 65%• Require secondary containment testing after repair to the secondary containment area for tanks, sumps,

or piping

33% 0%

Replacement of lined tanks that cannot be repaired according to a code of practice

Require replacement of lined tanks that cannot be repaired according to a code of practice

15% 0%

O&M for release detection equipment

Require annual operation and maintenance tests for release detection equipment and containment sumps:• ATG - test alarm; verify system configuration; and test battery back-up• Vacuum pumps and pressure gauges - ensure communication with sensors and controller• Probes and sensors - inspect for residual buildup, ensure floats move freely; ensure shaft is not damaged; ensure cables are free of kinks, bends, and breaks; test communication with controller• Line leak detector - simulate leak to determine capability to detect a leak• Vapor monitoring - calibrate handheld electronic devices; test operability of sensors• Groundwater monitoring - check handheld bailers for functionality; test operability of sensors• Check tank gauge sticks• Containment sumps (tank, dispenser, etc.) – check for any damage, leaks to the containment area, or releases to the environment; and remove any liquid or debris

60% (reduced to 50% for universe of reported releases only, phone call 4/9/13)

65% (reduced to 55% for universe of reported releases only, phone call 4/9/13)

65% BE NICE TO HAVE " Must be a cert

perform this" 

Add SIR and CITLDS usage Require SIR and CITLDS users to submit quantitative results only (with leak rate)

22% 0% YES its part of Leak Detection and 

if NOT an ANNUAL Line Test shoul

Response to interstitial monitoring alarms Require secondary containment testing in response to an interstitial monitoring alarm (if warranted after initial investigation) 5-7% 10%

Severity Measures 

(choose at least one)

15% 20% 30%

Release Detection Release Prevention Repairs Overfill prevention equipment • Eliminate flow restrictors as an overfill prevention option for new tanks (and when overfill prevention equipment is replaced)

H-13
EXPERT 4 RESPONSES Incidence Measure

Proposed Regulatory 

Requirement Description of Proposed Regulatory Requirement

Percent Reduction in 

Annual Releases (or 

number of releases 

avoided)

Reduction In The 

Percentage Of 

Releases That 

Reach 

Groundwater

Percent 

Reduction In The

Average Quantity

Released

Sensitivity Question:

Would results differ 

if the following 

change were made?

Sensitivity Answer

Interaction - is this r

dependent on or redu

requiremen

Column [1] [2] [3] [4] [5] [6] [7] [8] 

Severity Measures 

(choose at least one)

Groundwater monitoring/vapor monitoring

Require owners/operators that use this method to have a site assessment in accordance with 280.43(e) or 280.43(f) and maintain the assessment as long as they use GW or VP, respectively, as their release detection method

0% 0%

Groundwater monitoring/vapor monitoring (EPA added line item in July 2013)

Require owners/operators that use groundwater and vapor monitoring for release detection to phase-out use of these methods over five years. These methods are assumed to be replaced with SIR.

30% 40% 

Deferrals

Remove release detection deferral for emergency generator USTs, assuming they would now be required to meet existing regulations(note: estimate of roughly 20,000 tanks nationally)

30% 45%

Require notification to implementing agency by owner/operator of ownership change little impact little impactRequire one-time notification for existing FCT and AHS systems little impact little impact

Compatibility

O/os storing regulated substances >10% ethanol or >20% biodiesel or another substance identified by the implementing agency must:i. demonstrate compatibility through one of the following methods: (1) UL listing; (2) Manufacturer certification; (3) Another method determined by the implementing agency; orii. use an UST system that has secondary containment with interstitial monitoring

20% 40% 30% 

Compatibility (EPA added line item in July 2013)

O/os storing regulated substances >10% ethanol or >20% biodiesel or another substance identified by the implementing agency must:i. demonstrate compatibility through one of the following methods: (1) UL listing; (2) Manufacturer certification; (3) Another method determined by the implementing agency; orii. use an UST system that has secondary containment with interstitial monitoring. In addition, o/os mustmaintain equipment records for the life of all new and replaced equipment.

10% (phone call 8/28/13: use previous compatibility response of 20%)

(phone call 8/28/13: use previous compatibility response of 40%)

30% 

Operator Training

Institute Operator Training as Follows:• One-time training for Class A operator (technical and regulatory) or opt-out test within 30 days of 

assuming duties• One-time training for Class B operator (technical) or opt-out test within 30 days of assuming duties.• One-time training for Class C operator (limited technical) prior to assuming duties.• Re-training for Class A and B operators if the facility is determined to be out of compliance. Retraining within 30 days of documented non-compliance.

20% 25% Effects specific to Indian 

country?

35% 

Install secondary containment on piping upon replacement. Replacement defined as:Removal of 50 percent or more of piping, excluding connectors, connected to a single underground tank. For

underground storage tanks with multiple piping runs, the replace definition applies independently to each piping run.

25% 30% Effects specific to Indian 

country?

30%

Require secondary containment and interstitial monitoring on all tanks and piping installed or replaced after effective date of rule

15% 20% Effects specific to Indian 

country?

Require under-dispenser containment on all new dispenser systems

40% 30% 30% Effects specific to Indian 

country?

45% (email follow up, 4/15/2013) 50% (email follow up, 

4/15/2013)

50% (email follow up, 4/15/2013) TOTAL IMPACTS OF ALL REQUIREMENTS TOGETHER (considering any overlaps/interactions you have identified in column [I]):

Other

Notification

Energy Policy Act-Related Requirements Secondary Containment

H-14
H-15 

Summary of Adjustments to Expert Responses 

This section describes the adjustments made to the experts’ responses to ensure that the 

responses were correctly applied to relevant universes of facilities and releases. We first describe 

general adjustments and considerations relevant to each expert. We then provide detail on 

specific adjustments made to individual experts’ responses. 

General Adjustments and Methodological Considerations 

 Where experts provided a range of values for a single requirement, we use the midpoint 

of the given range. We confirmed this approach with the experts, and they agreed that 

this was appropriate. 

 For requirements for which experts were unable to provide a numerical response, we 

conservatively assume that the regulatory requirement has no (zero) effect on release 

frequency and severity. 

 Where experts provided a combined numerical response for operability testing of all 

types of release detection systems, we apply that estimate only to certain types of systems 

to avoid double-counting benefits. Specifically, we do not apply reductions to testing 

pumps and gauges or probes and sensors unless the expert provided estimates specific to 

those types of equipment. The subset of tanks using these types of equipment represents a 

portion of the universe of tanks covered by other release detection systems. 

 For the Selected Option, we do not include reductions associated with the groundwater 

and vapor monitoring site assessment requirements if experts assumed that reductions 

resulted from users switching to other methods. Such an assumption is not consistent with 

the approach used to model costs. Because we cannot isolate and remove the portion of 

the reduction that is due to switching release detection methods, we conservatively 

assume that the switch has no (zero) effect. 

 For Alternative 1, we do not attribute reductions to release detection system operability 

testing of pumps and gauges or probes and sensors because these types of equipment are 

not included in the proposed requirement for that alternative. We also do not include 

reductions for operability testing of groundwater and vapor monitoring release detection 

systems because those reductions are assumed to be captured by the phase-out of 

groundwater and vapor monitoring systems. 

Expert-Specific Adjustments 

Expert 1: 

 Expert 1 provided responses only for the universe of tanks in states without existing 

regulation. 

 Expert 1 clarified that his reductions in release severity should not apply to operability 

testing of vapor monitoring or groundwater monitoring release detection systems. These 
H-16 

methods are assumed to identify releases only after groundwater contamination has 

already occurred. Estimated reductions do apply to other release detection methods. 

 Expert 1 attributed reductions associated with the documentation of compatibility to 

tanks storing E10, as well as those storing >E10 and >B20. Because the expert believed 

that the largest share of the estimated reduction would result from compatibility 

improvements in tanks storing E10, and because the regulatory requirement focuses only 

on tanks storing >E10 and >B20, we conservatively assumed that the expert estimated no 

(zero) effect for this requirement. 

Expert 2: 

 Expert 2 provided responses for the entire national universe of tanks, including tanks in 

states with existing regulation. 

 Based on conversations with EPA and other experts, we conclude that reductions in 

release severity should not apply to operability testing of vapor monitoring or 

groundwater monitoring release detection systems. These methods are assumed to 

identify releases only after groundwater contamination has already occurred. Estimated 

reductions do apply to other release detection methods. 

Expert 3: 

 Expert 3 provided responses for the entire national universe of tanks, including tanks in 

states with existing regulation. 

 Expert 3 provided responses for walkthrough inspections by component inspected. We 

calculate the overall reduction as the weighted average of each component, according to a 

standard UST system configuration (that is, one spill bucket, one sump, two dispenser 

pans, one monitoring/observation well, one impressed current rectifier, and one release 

detection system). Where components are not included in the proposed walkthrough 

inspection requirement, we assume that the inspection has no (zero) effect for that 

component. 

 Expert 3 provided responses for operator training by type of training. To be consistent 

with the cost analysis, we calculate the overall reduction according to the percentage of 

costs associated with each type of training (that is, 33.3 percent are associated with retraining, and of the remaining 66.7 percent, 20 percent are associated with Class A 

training, 20 percent with Class B training, and 60 percent with Class C training). 

 Expert 3 attributed reductions associated with the documentation of compatibility to 

tanks storing E10, as well as those storing >E10 and >B20. The expert clarified that 

reductions would drop to zero if E10 users were excluded from the requirement. We 

therefore assume that this requirement has no (zero) effect. 
H-17 

Expert 4: 

 Expert 4 generally provided responses for the entire national universe of tanks, not 

limited to those in states without existing regulation. For walkthrough inspections, 

overfill functionality testing, and spill bucket tightness testing, the expert provided 

responses for only the universe of tanks in states without existing regulation. 

 Based on conversations with EPA and other experts, we assume that reductions in release 

severity should not apply to operability testing of vapor monitoring or groundwater 

monitoring release detection systems. These methods are assumed to identify releases 

only after groundwater contamination has already occurred. Estimated reductions do 

apply to other release detection methods. 

 For operator training and secondary containment requirements, Expert 4 provided 

different estimates of reductions for UST systems on tribal lands. We use these 

responses. 

Consideration of Regulatory Compliance Assumptions 

Although the approach adopted for the cost analysis assumes that owners/operators 

would comply fully with all new regulations under the final regulation, EPA did not provide the 

experts with instruction regarding compliance assumptions. By not specifying that experts should 

assume full compliance, EPA allowed experts to incorporate their judgment about the frequency 

and effect of unintentional error as well as deliberate noncompliance. EPA believes that this 

approach provides more realistic estimates of the reductions that can be expected from the 

requirements of the final regulation. However, this approach differs from that used in the cost 

analysis and may therefore affect the interpretation of net benefits of the final regulation. 

To the extent that noncompliance occurs, costs estimated in this RIA may be overstated. 

It is also possible that some expert opinions on specific regulatory impacts may not completely 

capture full compliance (and may therefore understate the beneficial impacts of the final 

regulation), because the experience of most experts is related to implementing state regulatory 

programs and one issue encountered has been noncompliance. Therefore, because compliance 

assumptions mean that costs may be overstated compared to the positive impacts of the 

regulation, this RIA presents a conservative estimate of net benefits. Because three of the four 

experts provided responses that result in net cost savings to society under the Selected Option, 

even under these conservative assumptions, we do not attempt to adjust their estimates for 

noncompliance. 

Expert 2, however, provides responses that lead to a net cost to society under the Selected 

Option. In his responses, Expert 2 also explicitly raised the issue of compliance, noting that the 

cumulative estimate of all requirements together assumes at least 80 percent compliance with the 

regulations (other respondents did not make specific notes about noncompliance). Additionally, 

this expert’s cumulative benefits were substantially higher than the sum of avoided costs of each 

individual requirement. In subsequent conversation, this expert explained that, on average, he 
H-18 

believes compliance rates will be at most 75 percent nationally for requirements that depend on 

behavioral change, rather than technological change, and the long-term and cumulative benefits 

would result from a combination of behavioral and technological change encouraged by the 

regulation. Expert 2 noted that his assumed level of 75 percent compliance did not include 

intentional noncompliance, but did attempt to account for a lack of awareness or human error by 

owners/operators. 

To evaluate the sensitivity of avoided cost estimates to compliance assumptions, we scale 

Expert 2’s avoided remediation costs from 75 percent compliance to 100 percent compliance, to 

be consistent with the assumptions in the cost analysis. This adjustment results in avoided 

remediation costs greater than $150 million annually under the Selected Option, assuming a 

seven percent discount rate. In comparison, the value presented in this RIA, which does not 

adjust for Expert 2’s noncompliance assumptions, is approximately $110 million. Using the 

higher value scaled to assume full compliance, as would be consistent with the cost analysis, 

results in avoided costs greater than compliance costs for conventional UST systems and EGTs 

(for which costs are estimated to be approximately $130 million), or net cost savings to society. 

Similarly, scaling costs to assume at most 75 percent compliance, to be consistent with Expert 

2’s assumptions, results in net cost savings. 

As noted above, we did not follow up with the remaining three experts to clarify assumed 

compliance rates because their estimates generated net cost savings even under conservative 

compliance assumptions. That is, if the experts assumed full compliance, their assumptions 

would be consistent with EPA’s assumptions in the cost analysis, and would generate net cost 

savings to society. If the experts assumed any level of noncompliance, we would expect 

estimated avoided costs to be higher under full compliance assumptions, and the net benefits of 

the regulation would be greater. As a result of the different compliance assumptions used in the 

cost and avoided cost analyses, the central analysis in this RIA likely understates net benefits of 

the regulation. 
Appendix I

Methodology for Calculating Avoided Cleanup Costs and Summary Tables
I-1

This appendix presents EPA’s detailed methodology for the calculation of avoided costs

and summary tables of the overall avoided costs by regulatory requirement. The steps that EPA

took to calculate avoided costs are as follows:

 Tabulation of release reductions per requirement as provided within expert 

responses

 Weighting of reductions according to the universe affected by each regulation

 Calculation of avoided releases

 Economic valuation of avoided releases to yield avoided costs

The sections below describe each of these steps in detail.

I.1 Tabulation of Release Reductions per Requirement

EPA sent each expert a set of questions, as described in Appendices G and H. The 

purpose of these questions was to obtain measures of two aspects of the regulatory requirements:

1. Reductions in release frequency, i.e., what portion of releases might be avoided 

due to the final regulation.

2. Reduction in release severity, i.e., how might releases become less harmful as a 

consequence of the final regulation. 

Each expert responded to a number of questions that focused on the effects of each 

regulatory requirement on both the incidence of releases and the severity of releases. For the 

incidence of releases, each expert was asked to provide a percent reduction in the number of 

annual releases. For the severity of releases, each expert was asked to provide either the percent 

reduction in the number of releases that reach groundwater, or the percent reduction in the 

average quantity released.

All experts directly estimated the anticipated changes in the incidence of releases. To 

estimate reductions in release severity, three of the four experts directly estimated the percent 

reduction in the number of releases that reach groundwater. EPA translated the reductions in 

volume estimated by the remaining expert (Expert 2) into reductions in groundwater 

contamination; the methods for that calculation are explained later in this Appendix. In the 

sections below, the calculations of avoided groundwater incidents for Expert 2 correspondingly 

use a different methodology than those for other experts.

In responding to the questions about release severity, other experts also provided 

estimates of reductions in release volume in addition to explicit reductions in groundwater 

contamination, though we do not incorporate these into our measures of reduced severity. Where 

experts provided explicit reductions in groundwater contamination incidents, we used those 
I-2

estimates rather than estimates of volume reductions to avoid introducing uncertainty associated 

with those calculations.1

In a few cases, experts provided responses that had to be averaged in order to yield a 

usable value. For example, one expert did not provide an aggregate figure for the effects of the 

walkthrough inspection requirements on release incidence and release severity, instead providing 

disaggregated reduction values for each UST system component that would be addressed by a 

walkthrough inspection. In such case, we calculated a weighted average of the reductions 

provided based on the number of units of each component in an average UST system as 

described in Exhibit 2-1.

I.2 Adjustment of Reductions According to the Universe Affected by Requirement

As each distinct requirement of the final regulation affects only a certain percentage of 

the universe of UST systems, we weighted the reductions provided by the experts based on two 

elements:

1. The percentage of UST systems affected by a given requirement; and 

2. The area of an UST system that the requirement would affect.

For example, walkthrough inspections will affect 69.3 percent of the universe of UST 

systems and are expected to affect all areas of a typical UST system (see Exhibit I-1).

2

According to Expert 1’s responses, walkthrough inspections will reduce the frequency of 

releases by 10 percent, and the percentage of releases reaching groundwater by 30 percent, for 

systems that are not currently subject to state-level monthly walkthrough inspection 

requirements. We weight these figures by 69.3 percent and calculate that according to Expert 1, 

total release frequency will reduce by 6.93 percent and the percentage of releases reaching 

groundwater will reduce by 20.8 percent as a result of the walkthrough inspection requirement. 

The full list of the UST universe affected by each requirement of the final regulation is available 

in Exhibit 2-4.

Experts considered different universes when developing estimates of impacts. Expert 1 

estimated changes in release rates likely at facilities that are not currently subject to the 

requirements (i.e., the percentage reductions could only be applied to the subset of facilities 

whose practices would be affected). Experts 2 and 3, however, provided overall “national” 

reductions that apply to the entire universe of UST systems; these estimates incorporate baseline 

 

1

Some experts did not provide percent reductions in the number of releases reaching groundwater for 

certain requirements. In these cases, we treated their responses as indicating that there would be no reduction in the 

number of releases reaching groundwater.

2

The universe affected by walkthrough inspections used in benefits calculations differs slightly from the 

universe used in cost calculations (see Chapter 2). For modeling costs, EPA considers that states currently 

conducting monthly inspections will be required to switch to 30-day inspections. For modeling benefits, we assume 

that those states will not incur additional benefits because of the switch from monthly to 30-day inspections. 

Therefore, the universe affected does not include tanks in states conducting monthly inspections in the baseline.
I-3

variation in practice and apply to all systems. For example, for walkthrough inspections, we 

would apply estimated reductions given by Experts 2 and 3 to 100 percent of UST systems, 

rather than the 69.3 percent that are not currently subject to monthly inspection requirements.

Expert 4 considered a national universe for a subset of the requirements, and for other 

requirements considered only the universe of systems that would see changes in practice. We 

present the universe values in both scenarios and the area of the UST system affected by each 

requirement in Exhibit I-1.
I-4

Exhibit I-1

UST System Area and Proportion of Universe Affected by Regulatory Requirement

Description Area of UST Affected

Proportion of Universe Affected

Experts 1, 4a Experts 2, 3, 4a

Release Prevention

Walkthrough inspectionsball sources 69.3%

a

100%

Overfill prevention equipment inspectionscdelivery problems 61.4%

a

100%

Spill prevention equipment testsddelivery problems 67.2%

a

90.0%

Containment sump testingedispensers, STP 13.9% 18.3%a

Spill prevention equipment tightness test after repair delivery problems 2.48% 2.50%a

Overfill prevention equipment test after repair delivery problems 1.95% 2.00%a

Secondary containment test after repair tank, piping 2.50% 3.34%a

Eliminate flow restrictors in vent lines for all new tanks and when 

overfill prevention equipment is replaced delivery problems 11.0% 13.5%a

Release Detection

Operability test – ATG tank 33.0% 33.7%a

Operability test – vacuum pumps and pressure gauges tank, piping 18.4% 18.8%a

Operability test – probes and sensors tank, piping 55.9% 56.9%

a

Operability test - line leak detection piping 27.5% 27.5%a

Operability test – vapor monitoring tank 2.31% 2.31%

a

Operability test – groundwater monitoring tank 2.19% 2.19%

a

Operability test – tank gauge sticks tank 22.3% 22.7%a

Operability test – containment sumps tank, piping 18.4% 18.8%a

Add SIR/CITLDS to regulations with performance criteria tank, piping 0.477% 0.477%a

Response to interstitial monitoring alarms tank, piping 1.84% 2.42%a

Groundwater monitoring for release detection tank 0.286% 0.286%

a

Vapor monitoring for release detection tank 0.276% 0.276%a

Remove release detection deferral for emergency generator tanks tank, piping 1.90% 3.00%a

Other

Require notification of ownership change none 1.51% 10.1%a

Closure of lined tanks that cannot be repaired according to a code 

of practice tank <0.001% <0.001%a

Requirements for demonstrating compatibility with fuels > E10 and 

> B20 all sources 0.041% 0.041%a

Deferrals removed for airport hydrant fuel distribution systems not estimated not estimated not estimated

Deferrals removed for UST systems with field-constructed tanks not estimated not estimated not estimated

EPAct-related Provisions

Operator training all sources 0.453% 0.453%

a

Secondary containment - new and replaced tanks

tank, piping, 

dispensers, STP 0.016% 0.164%

a

Secondary containment - threshold for pipe replacement rather than 

repair piping <0.001% <0.001%a

Under-dispenser containment for all new dispensers dispenser 0.220% 0.220%

a

Notes:

a Expert 4 provided responses for different universes affected for different requirements. The specific universe considered by Expert 

4 for each requirement is denoted by this footnote.

b The proportion applied to responses from Expert 1 and Expert 4 decreases to 60.5 percent under Alternative 2. The universe 

affected by walkthrough inspections used in benefits calculations differs slightly from the universe used in cost calculations (see 

Chapter 2). For modeling costs, EPA considers that states currently conducting monthly inspections will be required to switch to 30-

day inspections. For modeling benefits, we assume that those states will not incur additional benefits because of the switch from 

monthly to 30-day inspections. Therefore, the universe affected does not include tanks in states conducting monthly inspections in 

the baseline.

c The proportion applied to responses from Expert 1 and Expert 4 increases to 66.1 percent under Alternative 1. Under Alternative 2, 

the proportion applied to all experts’ responses decreases to zero.

d The proportion applied to responses from Expert 1 and Expert 4 increases to 70.5 percent under Alternative 1.

e The proportion applied to responses from Expert 1 and Expert 4 increases to 15.6 percent under Alternative 1. Under Alternative 2, 

the proportion applied to all experts’ responses decreases to zero.
I-5

I.3 Calculation of Avoided Releases

The methodology calculates releases in two parts:

 Total releases avoided due to a reduction in release frequency; and

 Groundwater releases averted due to a reduction in the percentage of releases 

reaching groundwater.

I.3.1 Total releases avoided due to a reduction in release frequency

To assess how the requirements of the final regulation affect the number of releases, we 

rely on an evaluation of releases performed by EPA.

3

This study considered over 500 releases in 

23 states and classified them by whether they reached groundwater, as well as which part of the 

UST system (i.e., piping, dispenser, tank, etc.) was responsible for the release. Exhibit I-2

summarizes the data we use in our calculations.

Exhibit I-2

Release Incidence, Extent, and Media Contamination Type by Source

Source of 

Release

% of All 

Releases

Local 

Extent

Large 

Extent

Soil 

Affected

Water 

Affected

Soil Only Water Only

Local 

Extent

Large 

Extent

Local 

Extent

Large 

Extent

Piping 31% 65% 35% 45% 55% 90% 10% 40% 60%

Dispenser 32% 83% 18% 77% 23% 93% 7% 42% 58%

Tank 16% 54% 46% 48% 52% 64% 36% 34% 66%

STP Area 4% 83% 17% 50% 50% 100% 0% 62% 38%

Delivery 

Problems 16% 72% 28% 61% 39% 97% 3% 43% 57%

Others 1%

No 

data

No 

data No data No data

No 

data

No 

data

No 

data

No 

data

Source: Office of Underground Storage Tanks, “Evaluation of Releases from New and Upgraded Underground 

Storage Tank Systems – Peer Review Draft,” U.S. EPA, August 2004.

We apply the reductions estimated by the experts to these sources as mapped by Exhibit 

I-1; for example, walkthrough inspections would affect releases from all sources, whereas 

overfill prevention equipment inspections would affect only those releases arising from delivery 

problems. We similarly consider how each requirement of the final regulation affects releases 

reaching groundwater from each source.

To calculate the proportion of releases avoided:

 We consider the percentage of all releases coming from each source in an UST 

system, as well as the percentage of all releases reaching groundwater coming 

from each source as described in the autopsy study data.

 

3

Office of Underground Storage Tanks, “Evaluation of Releases from New and Upgraded Underground 

Storage Tank Systems – Peer Review Draft,” U.S. EPA, August 2004.
I-6

 We sum the reductions, weighted by the universe affected by each requirement, 

across each source for reductions in overall release frequency and reductions in 

the percentage of groundwater releases.

 We reduce the proportion of releases from each source by the total estimated 

reductions.

4

To determine the number of actual releases avoided: 

 We obtain the difference between the percentage of releases from each source

prior to the implementation of the final regulation and the percentage of releases 

from each source after the implementation of the final regulation.

 We then multiply this difference by the total number of confirmed releases 

according to the OUST 2013 End-of-Year Annual Report to obtain a numerical 

value for releases avoided.

 We sum these figures across all release sources to obtain a figure for total releases 

avoided.

I.3.2 Groundwater releases averted due to a reduction in the percentage of releases reaching 

groundwater

To assess the reduction in severity of releases, we obtain the difference between the 

proportion of releases affecting groundwater for each area of an UST system prior to and 

following the implementation of the final regulation. To obtain a distribution of releases before 

the regulatory changes, we allocate confirmed releases from the EPA’s FY2013 End-of-Year 

Report according to the distribution in the Florida study. We obtain the total reduction in 

groundwater incidents due to the final regulation and reduce the proportion of groundwater 

releases and redistribute these releases to increase the proportion of soil releases (recognizing 

that all of these releases would still happen under the regulation, but a smaller percentage will 

reach groundwater due to the regulation). To calculate the number of groundwater releases 

averted, we compare the number of groundwater releases before and after the regulatory 

requirements. 

Due to a lack of data from experts on changes in severity and cost of releases, EPA

calculates only the difference between average remediation costs of a soil-only release and 

average remediation costs of a groundwater release.

The Agency does not estimate cost savings for reducing the severity of releases that 

involve the same medium in both scenarios. That is, we do not measure the cost savings 

associated with small groundwater contamination releases that would have been larger and more 

 

4

These new percentages do not sum to 100 percent across sources; rather, these percentages present the 

ratio of remaining releases after the reductions stemming from the requirements of the final regulation go into effect 

from a given source to the overall ratio of releases prior to the implementation of the final regulation.
I-7

expensive in the baseline, or with small soil contamination events that would have been larger in 

the baseline, but would still not have reached groundwater. The analysis therefore provides only 

a partial estimate of the avoided cleanup costs associated with reduced release severity. If release 

extent is associated with volume – as the 23-state autopsy report data suggest – then reductions 

in release volume should result in both smaller extent releases regardless of media contaminated 

and fewer incidents of groundwater involvement, not just the latter. Our partial analysis thus 

likely underestimates the positive impacts and cost savings associated with reduced release

severity under the regulation.

I.3.3 Calculations for groundwater releases averted for Expert 2

Because Expert 2’s responses address changes in volume rather than the number of 

releases reaching groundwater resources, we use a groundwater contamination index from the 

risk assessment developed for EPA to translate reductions in average release volume to 

reductions in the proportion of releases reaching groundwater.5In particular:

 We use average release volume per release source from the autopsy study data to 

estimate the baseline proportion of releases that reach groundwater, based on the 

groundwater contamination model.

 We reduce baseline volumes by the weighted volume reductions in the same way 

as reductions in percentage of releases reaching groundwater to obtain postregulation average release volumes and rates of groundwater contamination for 

each release source.

6

 We calculate the difference between the rates of groundwater contamination 

between the baseline and post-regulation scenarios.

Exhibit I-3 reports the volumes used to calculate avoided groundwater releases for 

Expert 2.

 

5 RTI International, “Risk Analysis to Support Revisions to Underground Storage Tank (UST) 

Regulations,” December 22, 2009.

6 This method may underestimate avoided groundwater releases for release sources for which the average 

release is relatively small in volume (e.g., the STP area, delivery problems). This occurs because the process for 

translating volume reductions into reductions in groundwater contamination probabilities applies a linear scaling 

factor (in addition to a constant). Correspondingly, relatively fewer gallons will be reduced for a release source for 

which the average release is relatively small (i.e., a 10% reduction of a 1,000-gallon release is much larger than a 

10% reduction of a 10-gallon release). With a small difference between pre-reduction and post-reduction average 

release sizes, the effect on groundwater contamination probabilities for these release sources is also small.
I-8

Exhibit I-3

Average Volume by Release Source

Source of Release Average release (gal)

Piping 1,152

Tank 696

Other 408

Dispenser 260

Fuel Delivery 126

Pump (Turbine) 33

Fill Pipe 93

Office of Underground Storage Tanks, U.S. EPA, “Petroleum Releases at 

Underground Storage Tank Facilities in Florida,” U.S. EPA, March 2005.

Once these values are derived, our methodology for calculating avoided costs using Expert 2’s 

responses proceeds similarly to our methodology for calculating avoided costs via the responses 

of all other experts.

The risk assessment simulation of groundwater involvement may also overstate the 

probability of groundwater contamination, especially at relatively low release volumes 

(approximately 50 gallons or less). The simulation assumes that modeled volumes are released at 

a single time, which increases the probability of rapid soil transport and groundwater 

contamination. Experts with whom we spoke indicated that some releases involve low 

throughput over an extended period of time; these releases are more likely to be affected by 

attenuation and less likely to reach groundwater rapidly. The impact of this assumption means 

that the reduction in groundwater events is likely understated (e.g., because small releases still 

reach groundwater in large numbers). This produces a relatively conservative (i.e., low) estimate 

of the number of groundwater releases avoided.

I.4 Economic Valuation of Avoided Releases to Obtain Avoided Costs

Our valuation of avoided releases assigns values to two kinds of avoided costs:

 Costs avoided due to avoided releases; and

 Costs avoided due to the avoidance of a groundwater contamination incident, 

which effectively replaces a groundwater release with a less costly soil release.

I.4.1 Economic valuation of costs avoided due to avoided releases

To assign an economic value to avoided releases, we consider the autopsy study data, 

which breaks down releases by release source, extent (local or large), and whether or not the 

release reached groundwater (media affected).
I-9

We use average release remediation costs that consist of a weighted average of cost data 

across release types from both New Hampshire and Utah.7These costs vary by extent of the 

release (local or large), as well as by the media affected by that release (soil or groundwater). We 

calculate an average cost per release from each source by calculating a weighted average cost 

based on the type of release (large or small extent, soil or groundwater contamination) generated 

by that source. We multiply the number of avoided releases from each release source by the 

average cost of releases from that source to obtain avoided costs by release source. We sum these 

to obtain total avoided costs across all avoided releases. 

I.4.2 Economic valuation of costs avoided due to avoided groundwater releases

Because groundwater releases tend to be more costly to remediate than releases that 

affect only soil, the conversion of groundwater releases into soil releases represents a cost 

savings. The magnitude of cost avoidance depends on the number of groundwater releases 

averted: every groundwater release averted means lower groundwater remediation costs and 

additional soil remediation costs. To calculate the costs avoided due to the aversion of 

groundwater releases, we calculate the difference in the total cost of remediation prior to and 

after the implementation of the final regulation.

Under both scenarios, we use the same number of releases; that is, we alter only the 

distribution of releases, not their total number. In both cases, we use the total number of releases 

remaining after we exclude those releases that are completely avoided. We distribute releases 

according to the release source, media affected, and extent shown in Exhibit I-2 and calculate 

the total cost to remediate those releases. After accounting for changes in rates of groundwater 

contamination, we repeat the process and calculate the cost to remediate all releases after the 

final regulation. While the distribution across extent and release source does not change, the 

reductions in the percentage of groundwater releases alter the number of groundwater and soil 

releases from each release source. The difference in the total cost of remediation in the preimplementation and post-implementation scenarios represents our measure of reduced severity of 

releases.

Total avoided costs can be calculated by summing the avoided costs from avoided 

releases and the avoided costs from averted groundwater releases.

I.5 Results of the Economic Valuation of Avoided Costs

Exhibits I-4 through I-6 present the results of this analysis for the Selected Option, 

Alternative 1, and Alternative 2. These exhibits summarize avoided costs by regulatory 

requirement for each expert, as well as noting the average of the experts’ responses. Exhibits I-7 

through I-9 present the results of the sensitivity analysis using only the lowest remediation costs 

available, provided by the State of New Hampshire. Discussion of the results of both the primary 

and sensitivity analyses can be found in Chapter 4.

 

7 We also calculate these costs using data from New Hampshire to evaluate the sensitivity of our results.
I-10

Exhibit I-4

Total Discounted Avoided Costs By Requirement For Conventional UST Systemsa,b ($ millions)

Selected Option

Descriptionc Expert 1 Expert 2 Expert 3 Expert 4 Average 

Release Prevention

Walkthrough inspections $140 $44 $130 $270 $150 

Overfill prevention equipment inspection $23 $1.1 $19 $25 $17 

Spill prevention equipment testing $16 $7.3 $36 $21 $20 

Containment sump testing $9.3 $18 $1.0 $9.7 $9.4 

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment $2.7 $11 $1.9 $7.9 $5.9 

Eliminate flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replaced $2.2 $7.5 $0.85 $1.5 $3.0 

Subtotal - Release Prevention $190 $89 $190 $330 $200 

Release Detection

Operability tests for release detection methods $130 $13 $61 $170 $92 

Groundwater monitoring site assessmentd$0.00 $0.00 $0.00 $0.00 $0.00 

Vapor monitoring site assessmentd$0.00 $0.00 $0.00 $0.00 $0.00 

Add SIR and CITLDS usagee$0.21 $0.00 $0.94 $0.56 $0.43 

Response to interstitial monitoring alarms $0.80 $10 $0.21 $0.78 $2.9 

Remove release detection deferral for EGTs $0.68 $2.2 $7.6 $5.9 $4.1 

Subtotal - Release Detection $130 $25 $70 $170 $99 

Other

Notification of ownership changesf$0.00 $0.00 $0.00 $0.00 $0.00 

Replacement of lined tanks that cannot be repaired according to a code of practiceg$0.00 $0.00 $0.01 $0.00 $0.00 

Requirements for demonstrating compatibility with fuels >E10 and >B20h$0.00 $0.11 $0.00 $0.12 $0.06 

Subtotal – Other $0.00 $0.11 $0.01 $0.12 $0.06 

EPAct-related Provisions

Operator training $1.0 $0.04 $0.60 $1.5 $0.80 

Secondary containment $1.0 $0.66 $7.60 $2.4 $2.9 

Subtotal - EPAct-related Provisions $2.1 $0.69 $8.2 $3.9 $3.7 

TOTAL $330 $110 $260 $510 $300 

a Cost estimates were derived using a seven percent discount rate.

b Reductions in frequency and release severity (as measured by changes in groundwater contamination) do not adequately capture the positive 

impacts of preventing releases from very large systems such as AHFDSs and UST systems with FCTs. Releases from these types of systems 

constitute a small portion of total releases, but may be large in volume and can result in significant groundwater impacts. Especially in the case of 

AHFDSs, even minor problems can create large releases due to the significant pressure under which contents are stored. The model used by EPA 

to estimate avoided remediation costs is not designed to measure avoided costs from very large releases such as those typically associated with 

AHFDSs and FCTs, and we therefore do not offer an estimate of avoided costs for requirements that apply to these systems.

c

Some requirements, particularly those that target narrow subpopulations of the UST system universe, may generate higher avoided costs than this 

analysis suggests. Three sources of uncertainty drive these smaller universe results: First, EPA's model is calibrated to estimate avoided costs for 

broad-based national changes at average facilities; extrapolation of these results to small populations may not reflect specific subpopulations (e.g., 

UST systems in Indian country). Second, several experts stated that their estimates of impacts for requirements affecting narrow subsets of UST 

populations are more uncertain than broader estimates. Finally, experts emphasized that equipment replacement, inspection, training, and testing 

are all essential to ensure release reductions, and they used judgment to emphasize the different roles of these different activities. Therefore, the 

assignment of specific impacts to each of the requirements is potentially less accurate than the aggregate estimates of avoided impacts. 

d Experts 1, 2, and 3 attributed reductions to the groundwater and vapor monitoring site assessment requirements; however, these experts also 

noted that they assumed the requirements would lead users to switch to another leak detection method. Because EPA does not assume that users 

will necessarily switch methods, we conservatively removed the experts’ assumed reductions for this requirement. Expert 4 did not attribute 

reductions to these requirements.

e Expert 2 assumed negligible effect of the requirement to add SIR and CITLDS usage on release frequency and severity.

f All experts assumed no effect, or in the case of Expert 3, a negligible effect, of the requirement for notification of ownership changes on 

reductions in release frequency or severity.

g Although all experts attributed some reduction in release frequency or severity to this requirement, the number of tanks that cannot be repaired 

according to a code of practice is assumed to be so small that estimated benefits are negligible.

h Experts 1 and 3 attributed reductions to the compatibility requirement but noted that the majority of the benefit should be attributed to E10 users, 

which are not included in this requirement. As a result, we conservatively removed these experts’ assumed reductions for this requirement.
I-11

Exhibit I-5

Total Discounted Avoided Costs By Requirement For Conventional UST Systemsa,b ($ millions)

Alternative 1

Descriptionc Expert 1 Expert 2 Expert 3 Expert 4 Average 

Release Prevention

Walkthrough inspections $260 $110 $280 $370 $250 

Overfill prevention equipment inspection $32 $5.4 $22 $27 $22 

Spill prevention equipment testing $39 $24 $50 $25 $35 

Containment sump testing $21 $19 $1.4 $24 $16 

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment $2.6 $11 $1.7 $7.7 $5.8 

Eliminate flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replaced $1.5 $7.4 $0.75 $1.3 $2.7 

Subtotal - Release Prevention $360 $170 $350 $460 $330 

Release Detection

Operability tests for release detection methods $130 $15 $45 $180 $93 

Groundwater monitoring phase-out $0.05 $0.00 $0.00 $0.05 $0.03 

Vapor monitoring phase-out $0.04 $0.00 $0.00 $0.05 $0.02 

Add SIR and CITLDS usaged$0.21 $0.00 $0.91 $0.56 $0.42 

Response to interstitial monitoring alarms $0.80 $10 $0.20 $0.78 $2.9 

Remove release detection deferral for EGTs $0.77 $2.5 $8.4 $6.4 $4.5 

Subtotal - Release Detection $130 $27 $55 $190 $100 

Other

Notification of ownership changese$0.00 $0.00 $0.00 $0.00 $0.00 

Replacement of lined tanks that cannot be repaired according to a code of practicef$0.00 $0.00 $0.01 $0.00 $0.00 

Requirements for demonstrating compatibility with fuels >E10 and >B20g$0.34 $0.11 $0.01 $0.11 $0.14 

Subtotal – Other $0.34 $0.11 $0.01 $0.11 $0.14 

EPAct-related Provisions

Operator training $1.0 $0.04 $0.56 $1.5 $0.77 

Secondary containment $1.0 $0.66 $7.3 $2.2 $2.8 

Subtotal - EPAct-related Provisions $2.0 $0.69 $7.8 $3.7 $3.6 

TOTAL $490 $200 $410 $650 $440 

a Cost estimates were derived using a seven percent discount rate.

b Reductions in frequency and release severity (as measured by changes in groundwater contamination) do not adequately capture the positive 

impacts of preventing releases from very large systems such as AHFDSs and UST systems with FCTs. Releases from these types of systems 

constitute a small portion of total releases, but may be large in volume and can result in significant groundwater impacts. Especially in the case of 

AHFDSs, even minor problems can create large releases due to the significant pressure under which contents are stored. The model used by EPA 

to estimate avoided remediation costs is not designed to measure avoided costs from very large releases such as those typically associated with 

AHFDSs and FCTs, and we therefore do not offer an estimate of avoided costs for requirements that apply to these systems.

c

Some requirements, particularly those that target narrow subpopulations of the UST system universe, may generate higher avoided costs than this 

analysis suggests. Three sources of uncertainty drive these smaller universe results: First, EPA's model is calibrated to estimate avoided costs for 

broad-based national changes at average facilities; extrapolation of these results to small populations may not reflect specific subpopulations (e.g., 

UST systems in Indian country). Second, several experts stated that their estimates of impacts for requirements affecting narrow subsets of UST 

populations are more uncertain than broader estimates. Finally, experts emphasized that equipment replacement, inspection, training, and testing 

are all essential to ensure release reductions, and they used judgment to emphasize the different roles of these different activities. Therefore, the 

assignment of specific impacts to each of the requirements is potentially less accurate than the aggregate estimates of avoided impacts. 

d Expert 2 assumed negligible effect of the requirement to add SIR and CITLDS usage on release frequency and severity.

e All experts assumed no effect, or in the case of Expert 3, a negligible effect, of the requirement for notification of ownership changes on 

reductions in release frequency or severity.

f Although all experts attributed some reduction in release frequency or severity to this requirement, the number of tanks that cannot be repaired 

according to a code of practice is assumed to be so small that estimated benefits are negligible.

g

In comparison to the compatibility requirement included in the Selected Option, this requirement differs by requiring owners/operators to 

maintain equipment records for the life of all new and replaced equipment. Expert 3 assumed a negligible effect of the requirement on release 

frequency and severity.
I-12

Exhibit I-6

Total Discounted Avoided Costs By Requirement For Conventional UST Systemsa,b ($ millions)

Alternative 2

Descriptionc Expert 1 Expert 2 Expert 3 Expert 4 Average 

Release Prevention

Walkthrough inspections $57 $0.00 $96 $190 $85 

Overfill prevention equipment inspectiond$0.00 $0.00 $0.00 $0.00 $0.00 

Spill prevention equipment testing $18 $7.3 $40 $25 $23 

Containment sump testingd$0.00 $0.00 $0.00 $0.00 $0.00 

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment $2.8 $11 $1.9 $8.3 $6.0 

Eliminate flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replacedd $0.00 $0.00 $0.00 $0.00 $0.00 

Subtotal - Release Prevention $77 $18 $140 $220 $110 

Release Detection

Operability tests for release detection methods $130 $13 $62 $180 $96

Groundwater monitoring site assessmente$0.00 $0.00 $0.00 $0.00 $0.00 

Vapor monitoring site assessmente$0.00 $0.00 $0.00 $0.00 $0.00 

Add SIR and CITLDS usagef$0.21 $0.00 $0.95 $0.56 $0.43 

Response to interstitial monitoring alarms $0.82 $10 $0.21 $0.78 $3.0 

Remove release detection deferral for EGTs $0.69 $2.2 $7.7 $6.3 $4.2 

Subtotal - Release Detection $130 $25 $71 $180 $100 

Other

Notification of ownership changesg$0.00 $0.00 $0.00 $0.00 $0.00 

Replacement of lined tanks that cannot be repaired according to a code of practiceh$0.00 $0.00 $0.01 $0.00 $0.00 

Requirements for demonstrating compatibility with fuels >E10 and >B20d$0.00 $0.00 $0.00 $0.00 $0.00 

Subtotal – Other $0.00 $0.00 $0.01 $0.00 $0.00 

EPAct-related Provisions

Operator training $1.1 $0.04 $0.61 $1.7 $0.85 

Secondary containment $1.1 $0.66 $7.6 $2.5 $3.0 

Subtotal - EPAct-related Provisions $2.2 $0.70 $8.3 $4.2 $3.8 

TOTAL $210 $44 $220 $410 $220 

a Cost estimates were derived using a seven percent discount rate.

b Reductions in frequency and release severity (as measured by changes in groundwater contamination) do not adequately capture the positive 

impacts of preventing releases from very large systems such as AHFDSs and UST systems with FCTs. Releases from these types of systems 

constitute a small portion of total releases, but may be large in volume and can result in significant groundwater impacts. Especially in the case of 

AHFDSs, even minor problems can create large releases due to the significant pressure under which contents are stored. The model used by EPA 

to estimate avoided remediation costs is not designed to measure avoided costs from very large releases such as those typically associated with 

AHFDSs and FCTs, and we therefore do not offer an estimate of avoided costs for requirements that apply to these systems.

c

Some requirements, particularly those that target narrow subpopulations of the UST system universe, may generate higher avoided costs than this 

analysis suggests. Three sources of uncertainty drive these smaller universe results: First, EPA's model is calibrated to estimate avoided costs for 

broad-based national changes at average facilities; extrapolation of these results to small populations may not reflect specific subpopulations (e.g., 

UST systems in Indian country). Second, several experts stated that their estimates of impacts for requirements affecting narrow subsets of UST 

populations are more uncertain than broader estimates. Finally, experts emphasized that equipment replacement, inspection, training, and testing 

are all essential to ensure release reductions, and they used judgment to emphasize the different roles of these different activities. Therefore, the 

assignment of specific impacts to each of the requirements is potentially less accurate than the aggregate estimates of avoided impacts. 

d These requirements are not included under Alternative 2.

e Experts 1, 2, and 3 attributed reductions to the groundwater and vapor monitoring site assessment requirements; however, these experts also 

noted that they assumed the requirements would lead users to switch to another leak detection method. Because EPA does not assume that users 

will necessarily switch methods, we conservatively removed the experts’ assumed reductions for this requirement. Expert 4 did not attribute 

reductions to these requirements.

f Expert 2 assumed negligible effect of the requirement to add SIR and CITLDS usage on release frequency and severity.

g All experts assumed no effect, or in the case of Expert 3, a negligible effect, of the requirement for notification of ownership changes on 

reductions in release frequency or severity.

h Although all experts attributed some reduction in release frequency or severity to this requirement, the number of tanks that cannot be repaired 

according to a code of practice is assumed to be so small that estimated benefits are negligible.
I-13

Exhibit I-7

Sensitivity Analysis: Total Discounted Avoided Costs By Requirement

Based On New Hampshire Remediation Costsa,b ($ millions)

Selected Option

Descriptionc Expert 1 Expert 2 Expert 3 Expert 4 Average 

Release Prevention

Walkthrough inspections $86 $27 $81 $170 $92 

Overfill prevention equipment inspection $15 $0.74 $13 $16 $11 

Spill prevention equipment testing $11 $5.0 $24 $14 $14 

Containment sump testing $6.1 $13 $0.68 $6.5 $6.5 

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment $1.7 $6.9 $1.2 $5.1 $3.7 

Eliminate flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replaced $1.3 $5.1 $0.57 $0.97 $2.0 

Subtotal - Release Prevention $120 $58 $120 $220 $130 

Release Detection

Operability tests for release detection methods $77 $7.3 $38 $100 $56 

Groundwater monitoring site assessmentd$0.00 $0.00 $0.00 $0.00 $0.00 

Vapor monitoring site assessmentd$0.00 $0.00 $0.00 $0.00 $0.00 

Add SIR and CITLDS usagee$0.13 $0.00 $0.58 $0.36 $0.27 

Response to interstitial monitoring alarms $0.49 $6.2 $0.13 $0.50 $1.8 

Remove release detection deferral for EGTs $0.42 $1.2 $4.7 $3.6 $2.5 

Subtotal - Release Detection $78 $15 $43 $110 $61 

Other

Notification of ownership changesf$0.00 $0.00 $0.00 $0.00 $0.00 

Replacement of lined tanks that cannot be repaired according to a code of 

practiceg $0.00 $0.00 $0.00 $0.00 $0.00 

Requirements for demonstrating compatibility with fuels >E10 and >B20h$0.00 $0.07 $0.00 $0.08 $0.04 

Subtotal – Other $0.00 $0.07 $0.00 $0.08 $0.04 

EPAct-related Provisions

Operator training $0.66 $0.02 $0.38 $1.0 $0.52 

Secondary containment $0.67 $0.44 $4.8 $1.5 $1.9 

Subtotal - EPAct-related Provisions $1.3 $0.46 $5.2 $2.5 $2.4 

TOTAL $200 $73 $170 $330 $190 

a Cost estimates were derived using a seven percent discount rate.

b Reductions in frequency and release severity (as measured by changes in groundwater contamination) do not adequately capture the positive 

impacts of preventing releases from very large systems such as AHFDSs and UST systems with FCTs. Releases from these types of systems 

constitute a small portion of total releases, but may be large in volume and can result in significant groundwater impacts. Especially in the case of 

AHFDSs, even minor problems can create large releases due to the significant pressure under which contents are stored. The model used by EPA 

to estimate avoided remediation costs is not designed to measure avoided costs from very large releases such as those typically associated with 

AHFDSs and FCTs, and we therefore do not offer an estimate of avoided costs for requirements that apply to these systems.

c

Some proposed requirements, particularly those that target narrow subpopulations of the UST system universe, may generate higher avoided 

costs than this analysis suggests. Three sources of uncertainty drive these smaller universe results: First, EPA's model is calibrated to estimate 

avoided costs for broad-based national changes at average facilities; extrapolation of these results to small populations may not reflect specific 

subpopulations (e.g., UST systems in Indian country). Second, several experts stated that their estimates of impacts for requirements affecting 

narrow subsets of UST populations are more uncertain than broader estimates. Finally, experts emphasized that equipment replacement, 

inspection, training, and testing are all essential to ensure release reductions, and they used judgment to emphasize the different roles of these 

different activities. Therefore, the assignment of specific impacts to each of the proposed requirements is potentially less accurate than the 

aggregate estimates of avoided impacts.

d Experts 1, 2, and 3 attributed reductions to the groundwater and vapor monitoring site assessment requirements; however, these experts also 

noted that they assumed the requirements would lead users to switch to another leak detection method. Because EPA does not assume that users 

will necessarily switch methods, we conservatively removed the experts’ assumed reductions for this requirement. Expert 4 did not attribute 

reductions to these requirements.

e Expert 2 assumed negligible effect of the requirement to add SIR and CITLDS usage on release frequency and severity.

f All experts assumed no effect, or in the case of Expert 3, a negligible effect, of the requirement for notification of ownership changes on 

reductions in release frequency or severity.

g Although all experts attributed some reduction in release frequency or severity to this requirement, the number of tanks that cannot be repaired 

according to a code of practice is assumed to be so small that estimated benefits are negligible.

h Experts 1 and 3 attributed reductions to the compatibility requirement but noted that the majority of the benefit should be attributed to E10 users, 

which are not included in this requirement. As a result, we conservatively removed these experts’ assumed reductions for this requirement.
I-14

Exhibit I-8

Sensitivity Analysis: Total Discounted Avoided Costs By Requirement

Based On New Hampshire Remediation Costsa,b ($ millions)

Alternative 1

Descriptionc Expert 1 Expert 2 Expert 3 Expert 4 Average 

Release Prevention

Walkthrough inspections $160 $62 $180 $240 $160 

Overfill prevention equipment inspection $21 $3.7 $15 $18 $14 

Spill prevention equipment testing $26 $17 $34 $17 $23 

Containment sump testing $14 $14 $0.98 $17 $12 

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment $1.6 $6.9 $1.1 $5.0 $3.7 

Eliminate flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replaced $0.94 $5.1 $0.51 $0.87 $1.9 

Subtotal - Release Prevention $220 $110 $230 $300 $220 

Release Detection

Operability tests for release detection methods $78 $8.5 $28 $110 $57 

Groundwater monitoring phase-out $0.03 $0.00 $0.00 $0.03 $0.02 

Vapor monitoring phase-out $0.03 $0.00 $0.00 $0.03 $0.01 

Add SIR and CITLDS usaged$0.13 $0.00 $0.56 $0.36 $0.26 

Response to interstitial monitoring alarms $0.49 $6.3 $0.12 $0.50 $1.8 

Remove release detection deferral for EGTs $0.47 $1.4 $5.2 $4.0 $2.8 

Subtotal - Release Detection $80 $16 $34 $120 $62 

Other

Notification of ownership changese$0.00 $0.00 $0.00 $0.00 $0.00 

Replacement of lined tanks that cannot be repaired according to a code of 

practicef $0.00 $0.00 $0.00 $0.00 $0.00 

Requirements for demonstrating compatibility with fuels >E10 and >B20g$0.21 $0.07 $0.00 $0.07 $0.09 

Subtotal – Other $0.21 $0.07 $0.01 $0.07 $0.09 

EPAct-related Provisions

Operator training $0.64 $0.02 $0.36 $0.94 $0.49 

Secondary containment $0.66 $0.44 $4.7 $1.4 $1.8 

Subtotal - EPAct-related Provisions $1.3 $0.46 $5.0 $2.4 $2.3 

TOTAL $300 $130 $270 $420 $280 

a Cost estimates were derived using a seven percent discount rate.

b Reductions in frequency and release severity (as measured by changes in groundwater contamination) do not adequately capture the positive 

impacts of preventing releases from very large systems such as AHFDSs and UST systems with FCTs. Releases from these types of systems 

constitute a small portion of total releases, but may be large in volume and can result in significant groundwater impacts. Especially in the case of 

AHFDSs, even minor problems can create large releases due to the significant pressure under which contents are stored. The model used by EPA 

to estimate avoided remediation costs is not designed to measure avoided costs from very large releases such as those typically associated with 

AHFDSs and FCTs, and we therefore do not offer an estimate of avoided costs for requirements that apply to these systems.

c

Some proposed requirements, particularly those that target narrow subpopulations of the UST system universe, may generate higher avoided 

costs than this analysis suggests. Three sources of uncertainty drive these smaller universe results: First, EPA's model is calibrated to estimate 

avoided costs for broad-based national changes at average facilities; extrapolation of these results to small populations may not reflect specific 

subpopulations (e.g., UST systems in Indian country). Second, several experts stated that their estimates of impacts for requirements affecting 

narrow subsets of UST populations are more uncertain than broader estimates. Finally, experts emphasized that equipment replacement, 

inspection, training, and testing are all essential to ensure release reductions, and they used judgment to emphasize the different roles of these 

different activities. Therefore, the assignment of specific impacts to each of the proposed requirements is potentially less accurate than the 

aggregate estimates of avoided impacts.

d Expert 2 assumed negligible effect of the requirement to add SIR and CITLDS usage on release frequency and severity.

e All experts assumed no effect, or in the case of Expert 3, a negligible effect, of the requirement for notification of ownership changes on 

reductions in release frequency or severity.

f Although all experts attributed some reduction in release frequency or severity to this requirement, the number of tanks that cannot be repaired 

according to a code of practice is assumed to be so small that estimated benefits are negligible.

g

In comparison to the compatibility requirement included in the Selected Option, this requirement differs by requiring owners/operators to 

maintain equipment records for the life of all new and replaced equipment. Expert 3 assumed a negligible effect of the requirement on release 

frequency and severity.
I-15

Exhibit I-9

Sensitivity Analysis: Total Discounted Avoided Costs By Requirement

Based On New Hampshire Remediation Costsa,b ($ millions)

Alternative 2

Descriptionc Expert 1 Expert 2 Expert 3 Expert 4 Average 

Release Prevention

Walkthrough inspections $34 $0.00 $62 $120 $54 

Overfill prevention equipment inspectiond$0.00 $0.00 $0.00 $0.00 $0.00 

Spill prevention equipment testing $12 $5.0 $26 $16 $15 

Containment sump testingd$0.00 $0.00 $0.00 $0.00 $0.00 

Testing after repairs to spill and overfill prevention equipment, and secondary 

containment $1.7 $6.9 $1.3 $5.4 $3.8 

Eliminate flow restrictors in vent lines for all new tanks and when overfill 

prevention equipment is replacedd $0.00 $0.00 $0.00 $0.00 $0.00 

Subtotal - Release Prevention $47 $12 $90 $140 $73 

Release Detection

Operability tests for release detection methods $79 $7.5 $38 $110 $59 

Groundwater monitoring site assessmente$0.00 $0.00 $0.00 $0.00 $0.00 

Vapor monitoring site assessmente$0.00 $0.00 $0.00 $0.00 $0.00 

Add SIR and CITLDS usagef$0.13 $0.00 $0.59 $0.36 $0.27 

Response to interstitial monitoring alarms $0.50 $6.3 $0.13 $0.50 $1.9 

Remove release detection deferral for EGTs $0.43 $1.3 $4.8 $3.9 $2.6 

Subtotal - Release Detection $81 $15 $44 $110 $63 

Other

Notification of ownership changesg$0.00 $0.00 $0.00 $0.00 $0.00 

Replacement of lined tanks that cannot be repaired according to a code of 

practiceh $0.00 $0.00 $0.00 $0.00 $0.00 

Requirements for demonstrating compatibility with fuels >E10 and >B20d$0.00 $0.00 $0.00 $0.00 $0.00 

Subtotal – Other $0.00 $0.00 $0.00 $0.00 $0.00 

EPAct-related Provisions

Operator training $0.69 $0.02 $0.39 $1.1 $0.54 

Secondary containment $0.68 $0.44 $4.9 $1.6 $1.9 

Subtotal - EPAct-related Provisions $1.4 $0.46 $5.3 $2.7 $2.4 

TOTAL $130 $27 $140 $260 $140 

a Cost estimates were derived using a seven percent discount rate.

b Reductions in frequency and release severity (as measured by changes in groundwater contamination) do not adequately capture the positive 

impacts of preventing releases from very large systems such as AHFDSs and UST systems with FCTs. Releases from these types of systems 

constitute a small portion of total releases, but may be large in volume and can result in significant groundwater impacts. Especially in the case of 

AHFDSs, even minor problems can create large releases due to the significant pressure under which contents are stored. The model used by EPA 

to estimate avoided remediation costs is not designed to measure avoided costs from very large releases such as those typically associated with 

AHFDSs and FCTs, and we therefore do not offer an estimate of avoided costs for requirements that apply to these systems.

c

Some proposed requirements, particularly those that target narrow subpopulations of the UST system universe, may generate higher avoided 

costs than this analysis suggests. Three sources of uncertainty drive these smaller universe results: First, EPA's model is calibrated to estimate 

avoided costs for broad-based national changes at average facilities; extrapolation of these results to small populations may not reflect specific 

subpopulations (e.g., UST systems in Indian country). Second, several experts stated that their estimates of impacts for requirements affecting 

narrow subsets of UST populations are more uncertain than broader estimates. Finally, experts emphasized that equipment replacement, 

inspection, training, and testing are all essential to ensure release reductions, and they used judgment to emphasize the different roles of these 

different activities. Therefore, the assignment of specific impacts to each of the proposed requirements is potentially less accurate than the 

aggregate estimates of avoided impacts.

d These requirements are not included under Alternative 2.

e Experts 1, 2, and 3 attributed reductions to the groundwater and vapor monitoring site assessment requirements; however, these experts also 

noted that they assumed the requirements would lead users to switch to another leak detection method. Because EPA does not assume that users 

will necessarily switch methods, we conservatively removed the experts’ assumed reductions for this requirement. Expert 4 did not attribute 

reductions to these requirements.

f Expert 2 assumed negligible effect of the requirement to add SIR and CITLDS usage on release frequency and severity.

g All experts assumed no effect, or in the case of Expert 3, a negligible effect, of the requirement for notification of ownership changes on 

reductions in release frequency or severity.

h Although all experts attributed some reduction in release frequency or severity to this requirement, the number of tanks that cannot be repaired 

according to a code of practice is assumed to be so small that estimated benefits are negligible.
Appendix J

Estimation of Future UST System and Release Universes 

for the Alternative Baseline Scenario
J-1

Estimation of Future UST System Universes

To estimate future UST system universes, data on the number of UST systems dating back to 

1991 were used in conjunction with a single exponential decay function. An exponential decay 

function is one where a quantity declines in proportion to its value; that is, the lower the value, 

the smaller the decline in the following period. Given the trend in UST system universes dating 

back to 1991 as seen in Exhibit J-1, a singular exponential decay function appropriately 

represents this trend.

Singular exponential decay functions take the form Y = (Yo – P) * e(-k*X) + P, where P is the 

“plateau,” or limit that the function eventually approaches asymptotically, and k is the function’s 

half-life. The specific parameters yielding the equation used to project future UST system 

universes are as follows:

 Yo: 2,055,000

 P (“plateau”): 573,796

 k (half-life): 0.2013

The specific equation used to project UST system universes is Y = (2,055,000 – 573,796) * e(-

0.2013*X) + 573,796. Exhibit J-2 shows the UST universe data from 1991 through 2012 used to 

estimate future UST system universes (data points in smaller orange diamonds), as well as the 

projections of the universes themselves (larger blue diamonds).

 Actual Count of UST Systems

 Extrapolated Count of UST Systems
J-2

In EPA’s primary analysis, the annual number of affected systems is unchanged in future years, 

meaning that over a 20-year period, annual costs accrue to 11,559,620 UST systems, or (577,981

* 20). In the alternative baseline scenario, the annual number of affected systems declines in 

each year to 574,045 systems in year 20, as in Exhibit J-2. Correspondingly, over a 20-year 

period in the alternative baseline scenario, annual costs accrue to 11,537,417 UST systems (the 

sum of the annual estimate of UST universes in the years 2014 through 2033). The ratio between 

these two cumulative figures is approximately 99.8 percent, or 11,537,417 / 11,559,620. 

Estimation of Future Release Universes

The estimation of future release universes involves future projection of two components: UST 

system universes and “release rates,” or the ratio of confirmed releases to existing UST systems. 

UST system universes were projected as described above. 

We use release rates to project future number of releases (rather than past trends in the number of 

releases) for two reasons: First, as the UST universe and release rate both appear to decline in a 

way approximating a single-decay exponential function, and these are both "inputs" into 

Exhibit J-2

Actual and Projected UST System Universes, 1991 – 2032

Year UST System Universe (Actual) a Year UST System Universe (Projected) b

1991 1,788,505 c2014 585,213

1992 1,565,613 2015 583,131

1993 1,307,563 2016 581,429

1994 1,177,198 2017 580,037

1995 1,093,105 2018 578,899

1996 1,064,478 2019 577,969

1997 969,652 2020 577,208

1998 891,686 2021 576,586

1999 760,504 2022 576,077

2000 713,666 2023 575,661

2001 704,717 2024 575,321

2002 697,966 2025 575,043

2003 682,870 2026 574,816

2004 672,297 2027 574,630

2005 653,621 2028 574,478

2006 641,881 2029 574,353

2007 629,866 2030 574,252

2008 623,319 2031 574,169

2009 611,449 2032 574,101

2010 597,333 2033 574,045

2011 590,104

2012 583,508

2013 577,981

a Data regarding actual UST system universes obtained from reports from the Environmental Protection 

Agency, Office of Underground Storage Tanks, UST Performance Measures End-of-Year Reports.

b Projected UST system universe values estimated using a single exponential decay function.

c

For consistency with the projection of releases below, we exclude this data point from the analysis when 

estimating future UST system universes based on prior-year data.
J-3

calculating the universe of releases, these projections can be used to calculate future release 

universes without the added uncertainty of whether the release trend is truly a single-decay 

exponential function. Second, using the release rate projections to estimate future releases yields

a more conservative (lower) total number of releases, which leads to lower avoided costs/benefits 

estimates in the alternative baseline. This is consistent with the intent of using the alternative 

baseline as a way of testing conservative assumptions regarding the avoided costs associated 

with the final regulation.

As seen in Exhibit J-3, the trend in release rates is similar to the trend in UST systems in that it 

has generally declined at a decreasing rate over the last decade, albeit with significant variability 

(i.e., sharp upticks and falls) in certain years, likely reflecting specific state program activities 

and milestones.

A single exponential decay function was also used to project future values of release rates. The 

specific function is Y = (0.04566 – 0.005848) * e(-0.1066*X) + 0.005848. 

Release rates are calculated by dividing releases by the universe of UST systems; conversely, 

releases can be calculated by multiplying the total number of UST systems by the release rate. 

By projecting both UST universes and release rates using exponential decay functions, we then 

use each year’s values to calculate releases for that year. Exhibit J-4 plots actual and projected 

releases over time, while Exhibit J-5 displays UST systems, release rates, and releases in a 

tabular format.
J-4

Exhibit J-5

Actual and Projected Releases and Release Rates, 1992 - 2031

Year UST 

Systems a

Releases

(Actual)

Release Rate

(Calculated) b

Release Rate

(Projected) c

Releases 

(Calculated) d

1992 1,565,613 57,641 3.68%

1993 1,307,563 52,565 4.02%

1994 1,177,198 33,545 2.85%

1995 1,093,105 33,068 3.03%

1996 1,064,478 13,853 1.30%

1997 969,652 24,285 2.50%

1998 891,686 29,614 3.32%

1999 760,504 26,434 3.48%

2000 713,666 14,571 2.04%

2001 704,717 6,526 0.93%

2002 697,966 8,389 1.20%

2003 682,870 12,078 1.77%

2004 672,297 7,848 1.17%

2005 653,621 9,061 1.39%

2006 641,881 8,361 1.30%

2007 629,866 7,570 1.20%

2008 623,319 7,364 1.18%

2009 611,449 7,168 1.17%

2010 597,333 6,328 1.06%

2011 590,104 5,998 1.02%

2012 583,508 5,674 0.97%

2013 584,716 6,128 1.06%

2014 582,365 0.93% 5,429

2015 580,455 0.89% 5,208

2016 578,903 0.86% 5,011

2017 577,642 0.83% 4,837
J-5

Exhibit J-5

Actual and Projected Releases and Release Rates, 1992 - 2031

2018 576,617 0.81% 4,681

2019 575,784 0.79% 4,543

2020 575,107 0.77% 4,420

2021 574,557 0.75% 4,309

2022 574,110 0.73% 4,211

2023 573,747 0.72% 4,123

2024 573,452 0.70% 4,044

2025 573,212 0.69% 3,973

2026 573,017 0.68% 3,910

2027 572,859 0.67% 3,853

2028 572,730 0.66% 3,802

2029 572,625 0.65% 3,757

2030 572,541 0.65% 3,716

2031 572,471 0.64% 3,679

2032 574,101 0.64% 3,646

2033 574,045 0.63% 3,617

a Values obtained from Exhibit J-2.

b Calculated by dividing releases by UST systems.

c Projected release rates estimated using a single exponential decay function.

d Calculated by multiplying release rate by UST systems.

In EPA’s primary analysis, the cumulative universe of releases is 122,560, or (6,128 * 20). In the 

alternative baseline scenario, the cumulative universe of releases is 84,771, or the sum of 

releases in the years 2014 through 2033. The ratio between these two cumulative universes is 

approximately 69 percent, or 84,771 / 122,560.
Appendix K

Methodology for Estimating Upper Bound Market Exit Scenario
K-1

To evaluate the implications of a highly unlikely worst-case outcome, EPA evaluates a scenario 

in which the lowest revenue facilities incur the highest possible compliance costs. To obtain a 

measure of the number of lowest-revenue facilities and their revenues, we rely on the 2007 

Census data used in the analysis of small business impacts (see Chapter 5). These are reproduced 

in Exhibit K-1.

Exhibit K-1

Summary of Census Data Used for Analysis

Census Revenue Range Number of firms

Lower Upper Average Assumed equivalent to establishments

$150,000 $250,000 $200,000 2,500

$50,000 $150,000 $100,000 1,955

$39,570 $50,000 $44,785 326

Total 4,781

As discussed in Chapter 5, holding all other things equal, an annual cost greater than 1.8 percent 

of gross sales would exceed average reported profits, causing a motor fuel retailer to operate at a 

loss. If the facility cannot adjust its prices or lower costs, it will eventually exit the market. 

Given the profit margins of 1.8 percent identified in Chapter 5, facilities that earn more than 

approximately $250,000 per year will likely not exit the market.1 As a result, we only evaluate 

the implications for the approximately 4,800 facilities that earn less than $250,000 in revenues 

per year. Exhibit K-2 reproduces the distribution of facilities we obtain under the worst-case 

annual compliance cost scenario. EPA identified approximately 4,800 facilities that would incur 

annual compliance costs between $1,500 and $4,600 in the worst-case scenario.2

 

1 Another way to articulate this is as follows: a compliance cost of approximately $4,500 per year does not 

constitute more than 1.8 percent of the revenues of a facility that earns at least $250,000 per year.

2 To clarify, because only 4,781 facilities are in the revenue range between $0 and $250,000, and 9,310 

facilities have costs above $1,500, we exclude the remaining 4,529 facilities from the analysis in Exhibit K-3, as we 

assume that these 4,529 facilities report revenues greater than $250,000.
K-2

Exhibit K-2

Distribution of Facilities by Worst-Case Annual Compliance Cost

Cost range ($) UST Facilities

4,500 – 4,600 288

4,400 - 4,500 601

4,300 - 4,400 453

4,200 - 4,300 808

4,100 - 4,200 23

4,000 - 4,100 0

3,900 - 4,000 6

3,600 - 3,900 0

3,500 – 3,600 38

3,300 - 3,500 0

3,200 - 3,300 427

3,100 - 3,200 312

3,000 - 3,100 277

2,900 - 3,000 5

2,800 - 2,900 190

2,700 - 2,800 2

2,300 - 2,700 0

2,200 - 2,300 10

2,100 - 2,200 425

2,000 - 2,100 115

1,900 – 2,000 494

1,800 - 1,900 95

1,700 - 1,800 9

1,600 - 1,700 50

1,500 - 1,600 4,681 a

Above 1,500 9,310

Below 1,500 138,592

Total 147,902

a Because we calculate 4,781 total facilities with revenues of $250,000 or less according to 

Census data, we include only 152 of these 4,681 facilities in our analysis.

To obtain an estimate of the upper range of facilities that may be most impacted, we allocated the 

highest revenue facilities to the highest compliance cost ranges as shown in Exhibit K-3. We 

allocated facilities to a compliance cost range from the highest Census revenue range until that 

compliance range was fully assigned, i.e., until all facilities in that compliance cost range were 

assigned to a Census revenue range. Similarly, if all of the facilities in a revenue range were fully 

assigned across cost ranges and a cost range was not exhausted, we assigned it facilities from the 

next-highest revenue range.3

 

3 We map the highest-cost facilities with the highest revenue facilities in order to maximize the number of 

facilities that would potentially face costs in excess of their profit margins, as shown in Exhibit K-3. We do this to 

ensure that higher-revenue facilities will be faced with higher costs; alternately, if higher-revenue facilities were 

faced with lower costs and lower-revenue facilities were faced with higher costs, there would exist the possibility 

that only the lower-revenue facilities would face costs in excess of their profit margin. 
K-3

We considered average revenues within each Census revenue range when assessing whether 

facilities would hit 1.8 percent: if the lower end of the cost range exceeded 1.8 percent of the 

average revenue for a facilities in that range, we concluded that those facilities may potentially 

exit the market. In the worst case, the threshold revenue exceeds the assumed average revenue 

for all but 321 of the 4,781 facilities that earn between $39,570 and $250,000.4 We thus conclude 

that 4,460 facilities may exit the market if a highly-adverse distribution of costs was 

concentrated on the smallest facilities. As we discussed in Chapter 5, such an outcome is 

probably impossible, because the smallest facilities are not likely to operate three UST systems 

each and therefore would incur much lower costs.5

 

4 Because only 4,781 facilities are in the revenue range between $0 and $250,000, and 9,310 facilities have 

costs above $1,500, we exclude the remaining 4,529 facilities from the analysis in Exhibit K-3, as we assume that 

these 4,529 facilities report revenues greater than $250,000. See the note in Exhibit K-2.

5 Even assuming a gasoline price at $2 per gallon, a facility earning $50,000 annually would sell fewer than 

2,100 gallons of gasoline per month, compared with the monthly industry average throughput of approximately 

130,000 gallons. Based on information from a mid-size retail fuel marketer, EPA believes that a facility 

requirements a minimum throughput of approximately 30,000 gallons per month to remain economically viable. 

Correspondingly, annual revenues of $50,000, or even substantially higher amounts, would not support the operation 

of more than one UST system per facility.
K-4

Exhibit K-3

Allocation of Facilities Across Compliance Cost Ranges

Cost Range ($)

Number of 

Facilities in 

Range Allocation from Census Revenue Range a

Revenue Req’d. 

to be Below 1.8% 

Profit Margin

Assumed 

Average 

Revenue

4,500 – 4,600 288 288 facilities with revenue range of $150,000 - $250,000 $250,000 $200,000

4,400 - 4,500 601 601 facilities with revenue range of $150,000 - $250,000 $244,444 $200,000

4,300 - 4,400 453 453 facilities with revenue range of $150,000 - $250,000 $238,889 $200,000

4,200 - 4,300 808 808 facilities with revenue range of $150,000 - $250,000 $233,333 $200,000

4,100 - 4,200 23 23 facilities with revenue range of $150,000 - $250,000 $227,778 $200,000

4,000 - 4,100 0 0 facilities with revenue range of $150,000 - $250,000 $222,222 $200,000

3,900 - 4,000 6 6 facilities with revenue range of $150,000 - $250,000 $216,667 $200,000

3,800 - 3,900 0 0 facilities with revenue range of $150,000 - $250,000 $211,111 $200,000

3,700 - 3,800 0 0 facilities with revenue range of $150,000 - $250,000 $205,556 $200,000

3,600 - 3,700 0 0 facilities with revenue range of $150,000 - $250,000 $200,000 $200,000

3,500 - 3,600 38 38 facilities with revenue range of $150,000 - $250,000 $194,444 $200,000

3,400 - 3,500 0 0 facilities with revenue range of $150,000 - $250,000 $188,889 $200,000

3,300 - 3,400 0 0 facilities with revenue range of $150,000 - $250,000 $183,333 $200,000

3,200 - 3,300 427 283 facilities with revenue range of $150,000 - $250,000

144 facilities with revenue range of $50,000 - $100,000 $177,778 $200,000

$100,000

3,100 - 3,200 312 312 facilities with revenue range of $50,000 - $100,000 $172,222 $100,000

3,000 - 3,100 277 277 facilities with revenue range of $50,000 - $100,000 $166,667 $100,000

2,900 - 3,000 5 5 facilities with revenue range of $50,000 - $100,000 $161,111 $100,000

2,800 - 2,900 190 190 facilities with revenue range of $50,000 - $100,000 $155,556 $100,000

2,700 - 2,800 2 2 facilities with revenue range of $50,000 - $100,000 $150,000 $100,000

2,600 - 2,700 0 0 facilities with revenue range of $50,000 - $100,000 $144,444 $100,000

2,500 - 2,600 0 0 facilities with revenue range of $50,000 - $100,000 $138,889 $100,000

2,400 - 2,500 0 0 facilities with revenue range of $50,000 - $100,000 $133,333 $100,000

2,300 - 2,400 0 0 facilities with revenue range of $50,000 - $100,000 $127,778 $100,000

2,200 - 2,300 10 10 facilities with revenue range of $50,000 - $100,000 $122,222 $100,000

2,100 - 2,200 425 425 facilities with revenue range of $50,000 - $100,000 $116,667 $100,000

2,000 - 2,100 115 115 facilities with revenue range of $50,000 - $100,000 $111,111 $100,000

1,900 - 2,000 494 19 facilities with revenue range of $50,000 - $100,000

475 facilities with revenue range of $39,570 - $50,000 $105,556

$100,000

$44,785

1,800 - 1,900 95 95 facilities with revenue range of $39,570 - $50,000 $100,000 $44,875

1,700 - 1,800 9 9 facilities with revenue range of $39,570 - $50,000 $94,444 $44,785

1,600 - 1,700 50 50 facilities with revenue range of $39,570 - $50,000 $88,889 $44,785

1,500 - 1,600 152 b

160 facilities with revenue range of $39,570 - $50,000 $83,333 $44,785

N/A 4,460 Facilities exceeding 1.8% profit margin N/A N/A

N/A 321 Facilities not exceeding 1.8% profit margin N/A N/A

Notes:

a Values may not equal total in "Number of facilities in Range" due to rounding.

b Because only 4,781 facilities are in the revenue range between $0 and $250,000, and 9,310 facilities have costs above $1,500, we 

exclude the remaining 4,529 facilities from the analysis, as we assume that these 4,529 facilities report revenues greater than 

$250,000. This results in 152 facilities with costs in the $1,500 to $1,600 range.
Appendix L

Screening Analysis of Impacts on Small Entities

This Appendix contains two memoranda that were prepared in February and March 2010, and document 

the methodology used to assess small entity impacts under the proposed rule. While the methods presented in these 

memoranda are accurate, the results presented in these memoranda were updated for the final regulation and are 

superseded by the results in Chapter 5.
L-1

MEMORANDUM | 4 February 2010

TO Cho-Yi Kwan, EPA

FROM Monisha Khurana and Cynthia Manson, Industrial Economics, Inc. 

SUBJECT

Small Entities Screening Analysis of UST Universe by Industry Sector

(WA 3-25, Task 4)

In promulgating regulations, the Office of Underground Storage Tanks (OUST) must 

consider the effects of those regulations on small entities, as required by the Regulatory 

Flexibility Act, amended by the Small Business Regulatory Fairness Act 

(RFA/SBREFA). Under RFA/SBREFA, the regulating agency must certify whether a 

regulation has a “significant impact on a substantial number of small entities” 

(SISNOSE). Within reason, the definitions of “significant” and “substantial” are a matter 

of Agency discretion. To inform the development of regulatory revisions, however,

Industrial Economics, Incorporated (IEc) has developed a spreadsheet that calculates the 

impacts of proposed rules on small entities (including businesses and governments). The 

calculator also evaluates Federalism impacts and total impacts on Tribal governments.

The calculator uses data from the Small Business Administration (SBA) and U.S. Census

to identify governments and businesses by sector and size. We use data from E2, 

Incorporated (E2) and from a 1992 EPA study of small governments with USTs to 

estimate the number of small entities in each sector likely to have USTs.1,2 Based on a 

user-entered per-tank cost of compliance, the spreadsheet estimates the number of small 

entities that incur costs exceeding one and three percent of gross annual revenues. 

The spreadsheet also evaluates total costs to tanks on Tribal lands, and provides specific 

results for state and local government costs, including both impacts on small entities and 

a total estimate of costs addressed under Executive Order 13132, addressing potential 

federalism impacts. This memo describes an analysis using the spreadsheet, summarizes 

the data sources and outputs of the spreadsheet, and summarizes the methodology and 

results.

3

IEc‟s small entity impact screening approach is intended to identify an initial estimate of 

the number of small entities that may experience significant impacts associated with the 

regulations currently under consideration. To ensure that the analysis does not overlook 

potential impacts, we incorporate several conservative (i.e., high-cost or low-revenue) 

 

1

See TO 1010, TDD# 11, Appendix B, Draft Industry and Facility Profiles, 12.18.06, and Amendment 1, December 18, 2006

2

"Economic Impact Analysis of Additional Mechanisms for Local Government Entities to Demonstrate Financial Responsibility 

for Underground Storage Tanks," December 1992

3 The spreadsheet contains an initial ―Notes‖ sheet with detailed information about assumptions, inputs, and calculations. 

The model also includes a summary table of key outputs (Output Summary) and more detailed analysis summaries (―Inputs 

and Outputs‖ and ―Calculations by Major Sector‖ pages; the model also contains specific sheets to support analysis of 

government and Tribal impacts.

INTRODUCTION AND 

BACKGROUND 

OVERVIEW AND 

RESULTS
L-2

K

assumptions that are documented in our methodology. This memorandum describes a 

spreadsheet tool that can be used to assess a range of different regulatory scenarios. The 

key features of the spreadsheet are as follows:

 The spreadsheet calculates the number of small entities (firms and governments) 

with estimated costs associated with the regulation that exceed either one percent 

or three percent to total revenues. The per-tank compliance cost currently 

programmed in the model is based on estimates from the January 26, 2010 version 

of IEc‟s cost model. The parameters used to run the cost model are included in the 

spreadsheet and in Appendix 1 of this memo. The cost model output number is

currently adjusted to 2002 dollars, to be consistent with revenue data in this model 

from SBA and U.S. Census is from 2002. Based on the January 26, 2010 version 

of the cost model, this value is $309 in 2008 dollars, or $262 in 2002 dollars.4

 The spreadsheet also evaluates cost results for tanks on Tribal lands, based on 

model calculations specific to Tribal tanks. 

 The spreadsheet calculates the number of small entities with USTs that will 

experience compliance costs equal to or greater than one percent and three percent

of annual revenue. The spreadsheet also calculates the percentage of small entities 

with USTs represented by the entities meeting the thresholds.

 Using these figures, the Agency can make an initial determination of whether a 

regulation significantly affects a substantial number of small businesses or 

governments.

The remainder of this memorandum describes in more detail the specific methods, data, 

and assumptions used in calculating costs associated with small businesses, small 

government entities, and tanks on Tribal lands.

For the analysis of impacts on small business entities, we adopt a hybrid approach for 

estimating the distribution of USTs among facilities and firms. For the NAICS 447 

(Retail Motor Fuels) sector, we distribute tanks proportionately by facility across all 

facilities in the sector. For all other sectors, we distribute tanks proportionally by revenue

among a subset of facilities in the sector. We describe this approach in more detail 

below, outlining data sources and methodology. We also present the results of two 

sensitivity analyses (one that distributes tanks in all sectors proportionately by facility and 

one that distributes all tanks proportionately by revenue) in Appendix 2.

5

DATA SOURCES

IEc used E

2

data developed in 2006 to estimate the number of tanks and facilities in each 

of several key sectors that use USTs.6 With the exception of hospitals (NAICS 622), 

retail motor fuel establishments (NAICS 447) and communications and utilities (NAICS 

 

4

 Because the key output of the model is number of small entities affected, the results are not affected by year dollars used, 

as long as data are internally consistent However, we note that we expect to update the model to incorporate 2007 Census 

of Manufacturers data when this data set and the accompanying SBA data set become available.

5 The user can manually toggle the scenario by using the drop-down menu on the ―Calculations by Major Sector‖ worksheet, 

cell B2, which provides three options: original (hybrid), facility, and revenue. 

6

See TO 1010, TDD# 11, Appendix B, Draft Industry and Facility Profiles, 12.18.06, and Amendment 1, December 18, 2006

SMALL BUSINESS 

ANALYSIS
L-3

5171 and 2211), E2data on use of USTs specified only high level (e.g., 2-digit) NAICS 

sectors, such as “commercial” and “manufacturing” sectors.

SBA provides data on the number of firms, establishments and receipts by size of firm, 

categorized by 2-digit NAICS sectors.

7

SBA data allocate firms in each sector into the 

following annual revenue ranges, or “bins:”

 $0 to $99,999, 

 $100,000 to $499,999, 

 $500,000 to $999,999, 

 $1,000,000 to $4,999,999, 

 $5,000,000 to $9,999,999, 

 $10,000,000 to $49,999,999, 

 $50,000,000 to $99,999,999 and 

 $100,000,000 and above.

For 3-digit sector information (e.g., Hospitals and Retail Motor Fuel sales), IEc used U.S. 

Census data to determine the number of firms, number of establishments, and average 

revenues by firm, because SBA does not provide data for the relevant 3-digit NAICS 

codes.

The U.S. Census publishes slightly different revenue bins for reporting data. The lowestincome revenue bin includes all firms that report annual revenues under $250,000. All 

intermediate revenue bins are the same between U.S. Census and SBA. SBA‟s highestincome revenue bin is over $100 million, but U.S. Census breaks the largest categories 

down into $100 to $250 million, and then over $250 million. 

SBA provides employment and revenue thresholds to define small entities in each sector 

of the economy. We summarize the size standards for the industries identified by E2in 

Exhibit 1.8

 

7

Small Business Administration, ―Employer Firms, Establishments, Employment, Annual Payroll, and Receipts by Receipts 

Size of Firm and Major Industry, 2002,‖ as viewed at http://www.sba.gov/advo/research/data.html#us

8 The complete list of size thresholds can be found on the SBA website at 

http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
L-4

EXHIBIT 1. SMALL BUSINESS SIZE STANDARDS FOR INDUSTRIES WITH USTS

INDUSTRY OR SECTOR NAICS THRESHOLD

Gasoline stations with convenience 

stores 447110 $27 million (M)

Traditional service stations 447190 $9M

Wholesale trade 42 100 employees

Retail trade, accommodation and food 

services

44-45, 72 

(excluding 447)

Varies: $7M to $29M or 50 

employees

Wired telecommunications carriers 5171 1,500 employees

Hospitals 622 $34.5M

Manufacturing 31-33 Varies: 500 to 1,500 employees

Transportation and Warehousing 48 Varies: $7M to $34.5M or 500 to 

1,500 employees

Source: U.S. Small Business Association, ―Table of Small Business Size Standards Matched to 

North American Industry Classification System Codes,‖ August 22, 2008, as viewed at 

http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf

METHODOLOGY : SMALL BUSINESSES (FIRMS)

Identification of Number of Small Firms and Average Revenues

The first step in our analysis identifies the number of small firms, average revenues, and 

establishments in each sector. E

2

data from 2006 estimates the number of tanks in the 

following sectors: Commercial (NAICS 42, 44-45, 72, excluding 447), Institutional 

(Hospitals only, NAICS 622), Manufacturing (NAICS 31-33), Transportation and 

Warehousing (NAICS 481, 483-486, and 48811), and Communication and Utilities

(NAICS 5171 and 2211). To fit E

2

‟s sector information to SBA data, we group 

communications and utilities into the Information sector (NAICS 51). We also use the 

entire Transportation and Warehousing sector (NAICS 48), while E2breaks down the 

sector into NAICS codes 481, 483-486, and 48811 for their analysis. We use EPA‟s 

Semi-Annual Report of UST Performance Measures, End of Fiscal Year 2009 Report to 

estimate the total number of tanks, and E

2

‟s distribution of tanks across sectors to identify 

the percentage and total number of tanks in each sector.

9

IEc uses SBA employment and revenue thresholds as outlined in Exhibit 1 to define small 

entities in each sector of the economy. To ensure that we are not underestimating the 

number of small entities, we assume that all businesses within a revenue bin that contains

a specific SBA revenue threshold value are small. In other words, if the SBA small 

business size threshold for a sector is $7 million, the model assumes that all firms in the 

revenue range of $5 to $10 million are small. When SBA provides an employment 

threshold, we use total employment numbers for each revenue bin to calculate the average

number of employees per firm, and assume that all businesses within a revenue bin that 

 

9

Semi-Annual Report of UST Performance Measures, End of Fiscal Year 2009—As Of September 30, 2009. Accessed December 

17, 2009 at <http://www.epa.gov/oust/cat/ca_09_34.pdf>
L-5

contain the threshold value are small, similar to the sectors whose thresholds are defined 

by revenue. The number of small firms in each sector is displayed in Exhibit 2.

To estimate the number of retail motor fuel facilities, we consulted National Petroleum 

News‟ annual survey and U.S. Census of Manufacturers data. To reconcile differing 

estimates of the number of retail fuel facilities (roughly 162,000 estimated by NPN, and 

110,600 estimated by the Census), and to account for roughly 37,000 tanks estimated to 

be owned by governments that were not included in the E2data but are reflected in the 

total population of 611,449 tanks (FY 2009), we developed a 1.46 adjustment factor to 

Census data to inflate the number of retail motor fuel facilities to 162,000, distributed 

proportionately across revenue ranges.

10,11

 To ensure that the total number tanks and 

total number of facilities are consistent, we also revise E

2

's estimate of tanks per facility 

from 3.13 to 2.97. This approach preserves the distribution of firms by size according to 

Census data. As a result of this approach, we estimate that there are a total of 

approximately 83,900 firms and 481,000 tanks in the retail motor fuel sector.

EXHIBIT 2. NUMBER AND PERCENTAGE OF SMALL FIRMS BY NAICS CODE

INDUSTRY OR SECTOR NAICS

NUMBER OF 

SMALL FIRMS

TOTAL 

NUMBER OF 

FIRMS

PERCENTAGE 

OF FIRMS 

THAT ARE 

SMALL

SMALL FIRMS 

WITH USTs

Retail Motor Fuel Sales 447 82,462 83,869 98% 82,462

Commercial 

(wholesale trade, 

retail trade, 

accommodation, and 

food services)

42, 44-45, 72 

(excluding 447) 1,434,363 1,451,645 99% 14,128

Institutional (hospitals 

only) 622 2,278 3,800 60% 2,105

Manufacturing 31-33 293,325 297,873 98% 6,725

Transportation (air, 

water, truck, transit, 

pipeline, and airport 

operations)

48 157,904 159,373 99% 5,848

Information 51 76,582 77,605 99% 3,880

Sources: Small Business Administration, ―Employer Firms, Establishments, Employment, Annual Payroll, 

and Receipts by Receipts Size of Firm and Major Industry, 2002,‖ as viewed at 

http://www.sba.gov/advo/research/data.html#us

U.S. Census ―Table 4: Receipts/Revenue Size of Firms for the United States: 2002, as viewed at: 

http://www.census.gov/prod/ec02/ec0262sssz.pdf. 

 

10 NPN Market Facts 2008. See: <http://www.npnweb.com/ME2/dirmod.asp?sid=A79131211D8846B1A33169AF72F78511&type=

gen&mod=Core+Pages&gid=CD6098BB12AF47B7AF6FFC9DF4DAE988>

11 According to the Census, the term ―establishment‖ is defined as ―a single physical location where business transactions 

take place and for which payroll and employment records are kept.‖ We therefore assume that an establishment is 

equivalent to one facility. The terms facility and establishment are used interchangeably in this memorandum.
L-6

Tank Dis tribution Across Revenue Bins (Except Retail Motor Fuel, NAICS 447) 

The second step in our analysis is to distribute tanks among firms within each revenue bin 

for each sector. With the exception of the retail motor fuels sector, where we assume that 

all facilities have tanks, available data do not identify specific distributions of tanks 

across facilities in key sectors or sub-sectors. In the absence of empirical data about the 

use of tanks at specific facilities, we assign tanks to facilities within broad sectors 

assuming that tanks are distributed proportionately by revenue across all facilities in the 

sector. That is, we assume that larger companies with more facilities are likely to have 

more tanks (e.g., car rental companies with multiple locations). 

To ensure that the number of small firms potentially affected is not undercounted, the 

model currently assumes that all tanks in these sectors are located at small firms, and 

distributes tanks proportionately by revenue among small firm size categories. For 

example, in a hypothetical sector in which ten firms report total revenues of $10 million, 

and 20 more firms report revenues totaling $5 million, the model assumes that two-thirds 

of the tanks in that sector are distributed among the ten firms with revenues totaling $10 

million and the remaining one-third of tanks are distributed among firms with revenues 

totaling $5 million.12 The average number of tanks per facility is estimated using E2data, 

and is held constant for each sector; the number of tanks per firm therefore increases with 

the average number of facilities per firm as firm size increases. Exhibit 3 provides an 

example calculation to illustrate this approach.

To calculate the cost of compliance for each firm with USTs, we multiply the average 

number of tanks per firm by the average cost per tank, as defined by user-inputs to the 

model (in this case, cost model inputs).13 We compare this number with the average 

receipts per firm in each revenue bin, and determine how many firms would face 

compliance costs greater than one and three percent of their total revenue. 

 

12 This approach reflects some uncertainty; to the extent that tanks are not distributed proportionately across firms within a 

sector by revenue, it is possible that this approach could underestimate or over estimate impacts on small entities. 

However, we do not have enough information about the actual distribution of tanks within sub-sectors of these industries to 

develop a more refined distribution process.

13

 Cost per tank is calculated by running the cost model with the default parameters, and dividing the total cost across the 

total universe of tanks to obtain a per tank cost. This calculator can be run with a user-specified number by changing the 

input in cell C2 on the ―Inputs and Outputs‖ worksheet. 
L-7

EXHIBIT 3. TANK DISTRIBUTION IN TRANSPORTATION & WAREHOUSING (NAICS 48)

[A]

SMALL 

FIRMS

[B]

REVENUE RANGE

[C] 

FIRMS

[D] 

FACILITIES

[E] 

RECEIPTS 

($000)

[F]

PERCENT 

OF 

TOTAL 

SECTOR 

RECEIPTS

[G] 

FACILITIES 

PER FIRM

[H] 

NUMBER

OF USTS

[I] 

TANKS 

PER 

FIRM

[J] 

NUMBER 

OF 

FIRMS 

WITH 

USTS

Yes $0 to $99,999 41,605 41,623 2,081,438 0.42% 1.00 190 1.77 107

Yes $100,000 to $499,999 65,261 65,383 15,545,929 3.11% 1.00 1,420 1.77 801

Yes $500,000 to $999,999 20,143 20,380 14,176,545 2.84% 1.01 1,295 1.79 724

Yes $1,000,000 to $4,999,999 24,091 26,174 50,211,290 10.06% 1.09 4,587 1.92 2,387

Yes $5,000,000 to $9,999,999 3,696 5,290 24,352,963 4.88% 1.43 2,225 2.53 879

Yes $10,000,000 to $49,999,999 3,108 8,707 51,486,660 10.31% 2.80 4,704 4.96 949

No $50,000,000 to $99,999,999 440 2,813 18,101,927 3.63% 6.39

No $100,000,000 to + 1,029 24,773 323,265,371 64.75% 24.07

TOTALS 159,373 195,143 $499,222,123 100% 14,422 5,848

Notes and Sources: 

[A]: Based on threshold from SBA.

[B], [C], [D], [E],: Based on 2002 Census Data. Note that the terms ―establishments‖ and ―facilities‖ are assumed to be equivalent and are used 

interchangeably within this analysis.

[F]: Calculated as each row in [E]/∑[E].

[G]: Calculated as [D]/[C].

[H]: Calculated as [F]* total number of USTs per sector (e.g., 14,422 in NAICS 48).

[I]: Calculated as [G] * E2’s estimate of tanks per facility for each sector.

[J]: Calculated as [H]/[I].

Tank Distribution for Motor Fuel Retailers (NAICS 447)

For Retail Motor Fuel Sales (NAICS 447), we assume that all establishments (facilities) 

have USTs. Moreover, we assume that the number of USTs is constant across all 

facilities in the sector, and therefore varies directly with the number of facilities per 

firm.

14

 This approach differs from the revenue-based distribution used in other sectors in 

that we assume that even very small facilities have the same number of tanks (2.97) as 

larger facilities.

15 In reality, it is probable that some small facilities have fewer tanks and 

some larger facilities have more tanks, but our simplified distribution ensures that every 

facility has at least one tank and that costs to small facilities are not underestimated. 

 

14 According to the Census, the term ―establishment‖ is defined as ―a single physical location where business transactions 

take place and for which payroll and employment records are kept.‖ We therefore assume that an establishment is 

equivalent to one facility. The terms facility and establishment are used interchangeably in this memorandum.

15 Appendix 2 provides an alternative method of distributing tanks in NAICS 447 proportional to revenue as opposed to the 

number of facilities per firm. 
L-8

RESULTS

At a 2002 cost of $262 ($309 in 2008 dollars) per tank, the analysis concludes that no 

small entities in any sector will incur compliance costs that exceed either one or three 

percent of annual revenues (Exhibit 4). 

LIMITATIONS AND UNCERTAINTIES

By assuming that tanks are owned by small firms, (with the exception of retail motor fuel 

establishments (NAICS 447)), we may be overstating the number of small firms owning 

tanks. Available data do not provide information on how the number or existence of tanks 

relates to the size of the business in a given industry. In certain industries such as fuel 

retailers, it is likely that all facilities have one or more USTs. In other industries such as 

hospitals, most facilities do not have any tanks, and it may be that larger hospitals are 

more likely to have tanks than smaller hospitals (rather than small hospitals, as assumed). 

In addition, while Census and SBA revenue data are presented in ranges (or bins), the 

SBA size threshold, as well as the one or three percent of revenue thresholds, typically 

fall in the middle of ranges. Because we assume that all firms in a bin earn “average” 

revenues, the relationship between this average and the revenue impact thresholds 

determines whether all the facilities in that bin are “affected” by the regulation. This 

approach is likely to under- or over-estimate the number of businesses affected. Finally, 

we assume that when the small business threshold occurs in the middle of a revenue bin, 

all firms in that category are small; this might over-estimate the number of businesses 

affected.
L-9

EXHIBIT 4. SUMMARY RESULTS OF CURRENT SMALL ENTITY SCREENING ANALYSIS

INDUSTRY OR 

SECTOR

SECTOR 

(NAICS)

SMALL 

ENTITIES 

(FIRMS) 

WITH USTS

SMALL 

ENTITIES 

WITH USTSCOSTS 

EXCEED 1% 

OF REVENUES

PERCENT OF 

SMALL ENTITIES 

WITH USTS 

WITH COSTS 

EXCEEDING 1% 

OF REVENUES

ENTITIES 

WITH USTSCOSTS 

EXCEED 3% 

OF 

REVENUES

PERCENT OF 

SMALL 

ENTITIES WITH 

USTS WITH 

COSTS 

EXCEEDING 3% 

OF REVENUES

Retail Motor Fuel 

Sales 447 82,462 0 0.0% 0 0.0%

Commercial 

(wholesale trade, 

retail trade, 

accommodation, 

and food services)

42, 44-45, 72 

(excluding 

447)

14,128 0 0.0% 0 0.0%

Institutional 

(hospitals only) 622 2,105 0 0.0% 0 0.0%

Manufacturing 31-33 6,725 0 0.0% 0 0.0%

Transportation (air, 

water, truck, 

transit, pipeline, 

and airport

operations)

48 5,848 0 0.0% 0 0.0%

Information 51 3,880 0 0.0% 0 0.0%

TOTALS 115,148 0 0.0% 0 0.0%

To map SBA revenue data to E2tank estimates, we group communications and utilities 

into the Information sector (NAICS 51). We also use the entire Transportation and 

Warehousing sector (NAICS 48), while E2breaks down the sector into NAICS codes 481, 

483-486, and 48811 for their analysis. Using larger sectors could potentially be skewing 

the revenues and size of the firms in the smaller NAICS sub-divisions. 

A large number of governmental organizations use USTs. These governments include 

school districts, public utilities, local and county governments, and others. RFA/SBREFA 

requires agencies to consider the impacts on small governmental jurisdictions as well as 

small businesses; small governmental jurisdictions are defined as governments of cities, 

counties, towns, townships, villages, school districts, or special districts with a population 

of less than 50,000 people.16 In 2002, there were 87,525 local governments, including 

special districts, in the United States.17 To assess impacts to small governmental 

jurisdictions, we evaluate compliance costs for all small governmental jurisdictions with 

 

16 For the purposes of the RFA, states and tribal entities are not considered small.

<http://www.epa.gov/sbrefa/government.htm>

17 2002 Census of Governments

SMALL 

GOVERNMENT AND 

FEDERALISM 

ASSESSMENT
L-10

tanks to determine what percentage would have expenses exceeding one or three percent 

of total revenues. 

We evaluate total costs to all non-federal governments (including both direct compliance 

costs and program implementation costs) to determine whether the regulations under 

consideration would be likely to trigger requirements under E.O. 13132 (Federalism).

Total annual state and local expenditures associated with the regulation of $25 million or 

more, and/or compliance costs that are equal to or exceed one percent of their annual 

revenues, would trigger EPA‟s federalism requirements. This would require EPA to 

investigate approaches for ensuring that states have adequate discretion in implementing 

the relevant regulations. 

DATA SOURCES 

The data sources we use for our small governments analysis include the following: 

 Economic Impact Analysis of Additional Mechanisms for Local Government 

Entities to Demonstrate Financial Responsibility for Underground Storage Tanks,

December 1992 (1992 Local Government Economic Impact Analysis), and 

 2002 U.S. Census of Governments Data. 

METHODOLOGY AND RESULTS : SMALL GOVERNMENT ANALYSIS

The 1992 Local Government Economic Impact Analysis data provide information on the 

size and revenue of both general purpose (i.e. counties, municipalities, and townships)

and special district governments (i.e. school districts and other special districts), dividing 

these governments into four size categories: very large, large, medium and small. The 

analysis also provides data on the number of governments owning USTs, the number of 

total USTs owned by governments, average USTs per government, USTs per owning 

government and the annual average budget expenditures, all broken out by size 

categories. The 1992 analysis defines a “very large” government as one that serves over 

50,000 people; therefore, we consider all other entities to be small governmental 

jurisdictions, according to the RFA/SBREFA definition. 

We assume that local governments collectively own four percent of active tanks. This 

equates to 24,458 tanks, based on the FY 2009 universe of 611,449 tanks. We distribute 

the 24,458 tanks among all local governments, based upon the percent of tanks owned in 

1992 by local governments in each size category. 

We then determine how many small governments own tanks, using the 1992 data for 

USTs per owning government. We determine the average compliance cost per 

government, calculated by the per tank cost multiplied by the number of USTs per 

owning government in each size category.

The average annual revenues for each size of general purpose governments are calculated 

using 2002 Census Data. We add the total number of very large, large, medium and small 

governments across town/townships, municipalities and counties, and weight their total 

revenues accordingly to reflect the total number of each type of government (town, 

municipality, county) in each size category. In the United States, there are 16,504 

townships but revenue data are available only for 4,128 townships, so we extrapolate to 
L-11

get revenue data for all townships. We then combine these weighted averages to get a 

figure for annual revenues in 2002 dollars for general purpose governments. Detailed 

information at the special district level is not available for 2002, so we inflate the budget 

expenditures from the 1992 document into 2002 dollars.18 

To calculate how many small governments face significant compliance costs exceeding 

one or three percent of their revenues, we compare the average compliance cost per 

government with the average annual revenues to determine how many exceed either 

threshold. At a cost of $309 ($2008) per tank, no small governments are affected under

either the one percent or three percent revenue threshold (see Exhibit 5).

METHODOLOGY AND RESULTS : FEDERALISM ASSESSMENT

In addition to determining the impact on small governments, we calculate state and local 

costs to determine whether the proposed regulations would trigger an impact under 

Executive Order 13132, which addresses potential federalism impacts. We assume that 

states collectively own one percent of total tanks (6,114). This number is then multiplied 

by the per tank cost, as defined by the cost model/user-inputs to the model. Under the 

proposed regulations, each state will incur labor costs for reading the regulations and 

applying for State Program Approval (SPA). In addition, under the proposed regulations, 

facilities will be required to notify states of each tank ownership change. Processing and 

reviewing these notifications represent costs to the states, and are included in total state 

costs. 

The model calculates local government costs by summing the number of tanks in local 

governments for both general purpose and special districts in all four size categories: very 

large, large, medium and small. We then apply the per tank cost to the number of tanks 

across all local governments. Local and state costs are added together to determine if 

there will be a federalism impact. 

In this scenario, we determine that total costs to both state and local governments 

(including direct compliance costs, notification costs, and state program costs) are 

approximately $10 million in 2008 dollars; this is not considered to be a substantial 

compliance cost under federalism requirements. 

LIMITATIONS AND UNCERTAINTY 

The data used for this analysis (1992 Local Government Economic Impact Analysis data) 

use 1987 U.S. Census data. We are unable to find more recent data relating to the number 

of governments owning USTs, the average USTs per government, and USTs per owning 

governments. These numbers are likely outdated, and the current pattern of government 

ownership of USTs may be significantly different. Note, however, that because even 

very small governments earn over $1.5 million, it is not likely that any updates to the 

distribution of tanks would affect the results of the analysis. 

 

18 Typically, in a RFA/SBREFA screening assessment, revenues are used as the metric to assess economic impact measures for 

small governments. Without detailed 2002 data available, we use the budget expenditures in the 1992 document as a proxy 

for revenues. 
L-12

EXHIBIT 5. SMALL GOVERNMENT ANALYSIS

[A]

TYPE OF 

GOVERNMENT

[B]

SIZE OF 

GOVERNMENTC

[C]

USTS PER 

OWNING 

GOV’T

[D]

NUMBER OF 

GOV’TS 

OWNING 

TANKS

[E]

2002 EST. 

NUMBER OF 

GOV’TS

[F]

AVERAGE 

ANNUAL 

REVENUE 

(2002 $)

[G]

AVERAGE 

COST PER 

GOV’T 

($)

[H]

NUMBER OF 

GOV’TS 

EXCEEDING 

1% OF 

REVENUE

[I]

NUMBER OF 

GOV’TS

EXCEEDING 

3% OF 

REVENUE

General 

Purpose

Very Large 10.2 534 1,461

 

$316,129,836 

 

$2,676 0 0

Large 2.5 1,512 4,040

 

$35,687,794 

 

$656 0 0

Medium 1.4 1,444 7,822

 

$8,712,804 

 

$367 0 0

Small 1.1 1,048 25,644

 

$1,779,216 

 

$289 0 0

Subtotal 2.7 4,538 38,967

Special 

Purpose

Very Large 3.7 336

 

934 

 

$431,319,166 

 

$971 0 0

Large 3.6 1,902

 

5,340 

 

$52,806,696 

 

$945 0 0

Medium 1.4 2,648

 

13,602 

 

$2,533,231 

 

$367 0 0

Small 1.0 258

 

28,682 

 

$128,013 

 

$262 0 0

Subtotal 2.4 5,144 48,558

Overall Total 2.5 9,682 87,525

Notes: 

[A]: General Purpose governments include counties, municipalities and townships. Special Purpose governments include public 

school systems and special districts. 

[B]: Very large governments are considered to serve more than 50,000 people. We consider large governments as those that serve 

between 10,000 and 50,000 people, medium governments as those that serve between 2,500 and 10,000 people, and small 

governments as those that serve 2,500 or fewer people. According to RFA/SBREFA, small governmental jurisdictions have 

populations under 50,000. Therefore, we consider all sizes of governments except for ―very large‖ as small.

[C]: From 1992 Local Government Impact Analysis data

[D]: Calcuated as number of tanks (adjusted 1992 distribution in each size category to reflect FY 2009 tank numbers) / [C]

[E]: General purpose numbers from 2002 Census of Governments; Special Purpose total number of entities from 2002 Census of 

Governments, size distribution extrapolated from 1992 Local Government Impact Analysis data. 

[F]: General purpose estimates from 2002 Census of Governments; Special Purpose estimates inflated from 1992 Local Government 

Impact Analysis data.

[G]: Calculated as [C] * model estimated cost per tank ($262 in 2002$). 
L-13

DATA SOURCES AND METHODOLOGY

The data sources for the tribal lands analysis are the same as those used in the small 

business analysis. Based on a review of information available about the types of business 

entities on Tribal Lands, we assume that tanks on Tribal lands represent a subset of the 

rest of the universe and are distributed similarly across the same sectors.19 We distribute 

the total number of tribal tanks proportionally among the NAICS sectors. Using the E2

data for tanks per facility and facilities per firm, we determine the total firms in each 

sector in tribal lands. 

RESULTS

We run the cost model with the same parameters as the rest of the universe. The per cost 

tank is higher in tribal country, as the universe is smaller, and there are no regulations 

currently in place, so all tanks incur all costs. At a 2008 cost of $524 ($445 in 2002 

dollars) per tank, the total cost for all tanks on tribal lands is about $1.4 million. 

LIMITATIONS AND UNCERTAINTY

In order to determine the impacts on tribal entities, we assume the tank distribution across 

sectors in tribal country mirrors that of the rest of the United States. While we can 

estimate the total number of firms in tribal lands with tanks, we do not have data about 

the total number of firms.

 

19 For more detail, see Detailed Assessment of UST Universe by Tank Purpose and Design (WA 1-25, Task 6), 24 March 2009. 

Note that because Tribal ownership and operation is defined differently than other types of government ownership, we do 

not attempt to isolate or identify ―government‖ tanks on Tribal lands.

TRIBAL LANDS COST
L-14

APPENDIX 1

EXHIBIT A-1. PARAMETERS USED TO RUN COST MODEL

RESULTS_USER_INPUTS

REGULATION

ID

OPTION

ID

CHOICE

ID OPTION_NAME SELECTIONS SELECTION TYPE

1 1 1 Walkthrough inspections by 

owner or operator

1 months between 

inspections

2 1 1 Overfill functionality 

testing

12 months between tests

3 1 1 Spill bucket tightness 

testing

12 months between tests

4 1 1 Integrity testing for 

interstitial areas

12 months between tests

5 1 1 Spill bucket tightness test 

after repair

1 1 for yes; 0 for no

5 2 1 Overfill functionality test 

after repair

1 1 for yes; 0 for no

5 3 1 Interstitial integrity test 

after repair

1 1 for yes; 0 for no

6 1 1 Eliminate flow restrictors 

for all new tanks

1 1 for yes; 0 for no

6 2 1 Replacement of existing 

ball floats

0 1 for yes; 0 for no

7 1 1 Functionality test - ATG 12 months between tests

7 2 1 Functionality test -

Sticking

12 months between tests

7 3 1 Functionality test -

interstitial monitoring

12 months between tests

7 4 1 Functionality test - vapor 

monitoring

12 months between tests

7 5 1 Functionality test -

groundwater monitoring

12 months between tests

7 6 1 Functionality test - line 

leak detection

12 months between tests

9 1 1 Add SIR/CITLDS to 

regulations with 

restrictions

1 1 for yes; 0 for no

11 1 1 Deferrals removed for 

emergency generator tanks

1 1 for yes; 0 for no

11 2 1 Deferrals removed for 

airport hydrants

0 1 for yes; 0 for no

11 3 1 Deferrals removed for 

field-constructed USTs

0 1 for yes; 0 for no

11 4 1 Deferrals removed for 

wastewater treatment 

tanks

0 1 for yes; 0 for no
L-15

RESULTS_USER_INPUTS

REGULATION

ID

OPTION

ID

CHOICE

ID OPTION_NAME SELECTIONS SELECTION TYPE

12 1 2 Notification of ownership 

changes

1 1 for yes; 0 for no

13 1 1 Replacement of 

irrepairable lined tanks

1 1 for yes; 0 for no

14 1 1 Response to interstitial 

monitoring alarms on tanks 

and pipes

1 1 for yes; 0 for no

16 1 1 Operator training 1 1 for yes; 0 for no

17 1 1 Secondary containment -

new & replaced tanks

1 1 for yes; 0 for no

17 2 1 Threshold for pipe 

replacement rather than 

repair

0.5 piping replacement 

threshold

17 3 1 Under-dispenser containers 

for all new dispensers

1 1 if applies to all underdispenser containers; 0 

otherwise

17 3 2 Under-dispenser containers 

for all new motor fuel 

dispensers only

0 1 if only applies to motor 

fuel under-dispenser 

containers; 0 otherwise
L-16

APPENDIX 2

SENSITIVITY ANALYSES

Our primary analysis assesses impacts to small businesses in non-NAICS 447 sectors by 

distributing all USTs in each sector across small businesses, proportional to revenue. For

NAICS 447, however, we assume all facilities own USTs, and therefore distribute tanks 

by the number of facilities per firm. In this Appendix, we present two alternative 

scenarios: distribution of tanks in all sectors by firm revenue, and distribution of tanks in 

all sectors by number of facilities. 

DISTRIBUTION BY REVENUE 

This sensitivity analysis presents the results of distributing tanks by revenue across all 

sectors, including NAICS 447. Using this methodology, this analysis concludes that no

firms in any sector face compliance costs exceeding one or three percent of annual 

revenues. 

INDUSTRY OR 

SECTOR NAICS

SMALL 

FIRMS WITH 

USTS

ENTITIES WITH 

USTS- COSTS 

EXCEED 1% OF 

REVENUES

PERCENT OF 

SMALL 

ENTITIES 

WITH USTS 

WITH COSTS 

EXCEEDING 

1% OF 

REVENUES

ENTITIES 

WITH USTSCOSTS 

EXCEED 3% 

OF 

REVENUES

PERCENT OF 

SMALL 

ENTITIES 

WITH USTS 

WITH COSTS 

EXCEEDING 

3% OF 

REVENUES

Retail Motor Fuel 

Sales 447 82,462 0 0.0% 0 0.0%

Commercial 

(wholesale trade, 

retail trade, 

accommodation, 

and food services)

42, 44-45,

72 

(excluding 

447)

14,128 0 0.0% 0 0.0%

Institutional 

(hospitals only) 622 2,105 0 0.0% 0 0.0%

Manufacturing 31-33 6,725 0 0.0% 0 0.0%

Transportation (air, 

water, truck, 

transit, pipeline, 

and airport 

operations)

48 5,848 0 0.0% 0 0.0%

Information 51 3,880 0 0.0% 0 0.0%

TOTALS 115,148 0 0.0% 0 0.0%
L-17

DISTRIBUTION BY FACI LITY

This sensitivity analysis presents the results of distributing tanks by number of facilities 

across all sectors. Using this methodology, this analysis concludes that no firms in any 

sector face compliance costs exceeding one or three percent of annual revenues. 

INDUSTRY OR 

SECTOR NAICS

SMALL 

FIRMS WITH 

USTS

ENTITIES 

WITH USTSCOSTS 

EXCEED 1% 

OF REVENUES

PERCENT OF 

SMALL 

ENTITIES 

WITH USTS 

WITH COSTS 

EXCEEDING 

1% OF 

REVENUES S

ENTITIES 

WITH USTSCOSTS 

EXCEED 3% 

OF REVENUES

PERCENT OF 

SMALL 

ENTITIES 

WITH USTS 

WITH COSTS 

EXCEEDING 

3% OF 

REVENUES

Retail Motor Fuel 

Sales 447 82,462 0 0.0% 0 0.0%

Commercial 

(wholesale trade, 

retail trade, 

accommodation, 

and food services)

42, 44-45, 72 

(excluding 

447)

14,128 0 0.0% 0 0.0%

Institutional 

(hospitals only) 622 2,105 0 0.0% 0 0.0%

Manufacturing 31-33 6,725 0 0.0% 0 0.0%

Transportation (air, 

water, truck, 

transit, pipeline, 

and airport 

operations)

48

5,848 0 0.0% 0 0.0%

Information 51 3,880 0 0.0% 0 0.0%

TOTALS 115,148 0 0.0% 0 0.0%
L-18

EPA SUPPLEMENTAL SMALL ENTITY ASSESSMENT BY OUST 

MARCH 2010
EPA internal deliberative draft – do not cite or quote L-19

Supplemental Small Entity Assessment by EPA/OUST

March 23, 2010

The initial screening assessment performed by Industrial Economics, Inc. (IEc) indicated that 

there would not be a substantial number of small entities significantly impacted at the 1% or 3% revenue 

threshold based on the estimated per tank compliance cost as of March 22, 2010 (i.e., $378 per tank in 

2008 dollars).20 However, due to the large number of small firms with underground storage tanks (USTs) 

that are in the retail motor fuel sales sector (NAICS 447) and because the initial screening assessment 

uses the average revenue within a particular revenue range to determine whether the entire number of 

firms in that range would be included or excluded in the threshold determination, OUST undertook a 

closer examination of the small firms in this sector. This paper first summarizes the results from the 

initial screening assessment, and then details the supplemental analysis conducted to refine the 

conclusions from the initial screening assessment for the retail motor fuel sales sector.

Initial Screening Assessment

According to our analysis, it is estimated that there are approximately 83,900 firms in the retail 

motor fuel sales sector.21 All of these firms are assumed to own USTs at all their facilities. Based on the 

distribution of firms across revenue bins published by the 2002 Census and SBA‟s revenue thresholds for 

NAICS 447110 and 447190, it is estimated that 82,500 of these firms, or 98 percent of total firms, are 

considered “small” under SBA‟s definition of a small entity.22 Approximately 7,500 of these small firms 

are estimated to be in the smallest revenue range published by the 2002 Census (i.e., reporting sales 

receipts between $0 and $250,000), with average sales of approximately $149,000. 

As mentioned above, the initial screening compared the total compliance cost per firm with the 

average revenue reported by the firms of a given revenue range to determine whether those firms would 

be significantly impacted by the proposed rulemaking (i.e., exceed the 1% or 3% revenue threshold). 

Based on a per tank compliance cost of $321 (in 2002 dollars),23 and assuming that the firms in the 

smallest revenue range would own only one facility with three USTs, we estimate that the 7,500 small 

 

20 See IEc, “Small Entities Screening Analysis of UST Universe by Industry Sector,” February 4, 2010 (WA 3-25, Task 4) for details.

21 NAICS code 447 is comprised of 447110 (Gasoline stations with convenience stores) and 447190 (Other gasoline stations). To reconcile 

differing estimates of the number of retail fuel facilities (roughly 162,000 estimated by NPN, and 110,600 estimated by the Census), a 1.46 

adjustment factor was applied to the Census data to inflate the number of retail motor fuel facilities to 162,000, distributed proportionately across 

revenue ranges. This approach preserves the distribution of firms by size according to Census data. As a result of this approach, we estimate that 

there are a total of approximately 83,900 firms and 481,000 tanks in the retail motor fuel sector.

22 For 447110, the SBA revenue threshold is $27 million; for 447190, the SBA revenue threshold is $9 million. To ensure that we are not 

underestimating the number of small entities, we assume that all businesses within a revenue bin that contains a specific SBA revenue threshold 

value are small. In other words, if the SBA small business size threshold for a sector is $7 million, we have assumed that all firms in the revenue 

range of $5 to $10 million are small.

23 To be consistent with 2002 revenue data from SBA and the U.S. Census Bureau, compliance costs have been adjusted from 2008 dollars to 

2002 dollars using the GDP implicit deflator. Based on the January 26, 2010 version of the cost model, the estimated compliance cost is $309 per 

tank in 2008 dollars, or $262 per tank in 2002 dollars. (Total annualized compliance costs are estimated to be $190 million in 2008 dollars. 

These costs exclude compliance costs associated with the removal of deferrals for airport hydrant systems and field-constructed tanks. These 

systems are assumed to be primarily owned by the Department of Defense; therefore, potential compliance costs for these systems are not 

required to be included for the small business assessment.)
EPA internal deliberative draft – do not cite or quote L-20

firms in the $0-$250,000 revenue range would face total compliance costs of $963 per firm ($2002). As a 

result, any firm earning less than $96,300 (i.e., the revenue threshold at which compliance costs would 

exceed 1% of the firm‟s revenue) would not be significantly impacted. Because the average revenue for 

the 7,500 firms in the $0-$250,000 revenue bin (i.e., $149,000) is more than $96,300, the initial screening 

assessment concluded that no firms would be significantly impacted from the estimated compliance cost 

(based on an all-in or all-out assessment).

However, given that the lowest revenue bin reported by the U.S. Census ranges from between $0 

and $250,000, it is obvious that some of the 7,500 firms make less than the average, and therefore, may be 

significantly impacted. At the same time, it is also apparent that a number of the 7,500 firms make more 

than the average, and therefore would not be significantly impacted. Therefore, a more accurate 

conclusion from the initial screening assessment may be that, at best, we can conclude that between zero 

and 7,500 firms may be significantly impacted based on a 1- or 3-percent revenue threshold.

EPA guidance used to determine whether a program can certify that a rulemaking will not have a 

significant impact on a substantial number of small entities (SISNOSE) provides an example cutoff of 

1,000 small firms or 20 percent of small firms affected as a measure of “substantial number.” While the 

7,500 small firms in the lowest revenue range represents nine percent of all potentially affected small 

firms, this number exceeds the example 1,000 threshold. As a result, OUST attempted to further refine 

the number of small firms potentially affected by conducting a supplemental analysis that focuses on the 

7,500 small firms that earn between $0 and $250,000 in revenues.

Supplemental Analysis

The main goal of the supplemental analysis is to determine whether we could estimate the 

distribution of the 7,500 within the $0-$250,000 revenue range so that we could better identify the 

number of firms that may be significantly impacted. As a first step, we contacted the U.S. Census Bureau 

to see if they would be able to provide a further breakdown of the number of firms in the lowest revenue 

bins for NAICS 447110 (Gasoline stations with convenience stores) and 447190 (Other gasoline stations). 

The Census Bureau was able to give us a percentage breakdown of the firms between three smaller 

revenue ranges: (1) $0-$50,000; (2) $50,000-$150,000; and (3) $150,000-$250,000.24 Based on this 

information, we estimate that the number of firms in the retail motor fuel sales sector (i.e., NAICS 447) 

for these three revenue groups is approximately 550, 3,120, and 3,860, respectively (see Exhibit 1).

Using these three additional data points, we plotted a curve that depicts the cumulative number of 

firms at each revenue threshold (see Exhibit 2). (For example, Exhibit 2 shows that approximately 76,200 

firms earn under $5 million in revenues). By fitting a straight-line trend line at the lower end of this curve 

(see Exhibit 3), Excel generated the following formula for the curve: y = 0.0359x – 1283.6 (R2=0.9985). 

We then use this formula to estimate the number of firms that would be impacted at the 1 percent and 3 

percent revenue threshold. 

 

24 The information provided by the U.S. Census Bureau is considered an “unpublished data request.” As such, while the Census Bureau provided 

the additional data we requested, they also included a letter noting that “these are not „official data‟ from the Census Bureau, since they do not 

meet the Census Bureau‟s quality standards. These data should be used with extreme caution, realizing the severe quality limitations that may 

exist.” However, given that we do not have another source of information, we use this as the best data available.
EPA internal deliberative draft – do not cite or quote L-21

Given compliance costs of $963 per firm (in 2002 dollars), any firm making less than $96,300 

and $32,100 would be considered significantly impacted at the 1% and 3% revenue threshold, 

respectively. By solving for y where x is $96,300 in the formula generated above, we estimate that 

approximately 2,175 firms would be significantly impacted at the 1% threshold. Based on the formula, 

there are no firms that make under $35,750 in revenue. As a result, we estimate that there would be no 

firms significantly impacted at the 3% revenue threshold.

Our estimate of 2,175 firms that would be significantly impacted at the 1% revenue threshold 

does exceed the 1,000 example cutoff provided in EPA guidance. However, we believe that we are able 

to certify that this proposed rulemaking will likely have no SISNOSE for the following three reasons. 

First, 2,175 firms represent less than three percent of all potentially affected small firms in this sector, 

which is much less than the 20 percent cutoff that is the other parameter typically used to determine 

“substantial number.” Second, assuming a minimum annual throughput of 120,000 gallons of gasoline 

sold at a gas station, compliance costs of $1,134 per firm would be equivalent to less than one cent per 

gallon. This relatively low cost could theoretically be passed-through to the consumer given the price 

inelasticity of gasoline demand.25 Finally, as described in the next paragraph, while we use data reported 

by the U.S. Census Bureau to support our analysis, we find it difficult to imagine that a retail gas station 

would be a viable business if it earned less than $100,000 in annual revenues. 

Assuming the firm sells only gasoline at $2 per gallon, if the firm only generates $100,000 in 

annual revenues, then this would mean the firm is selling less than 4,200 gallons of gas per month, which 

appears extremely low compared to the monthly industry average throughput of approximately 130,000 

gallons. In addition, given that the gross profit margin for gas stations with convenience stores averages 

14 percent,26 a quick back-calculation of the amount of revenues that would be needed to generate enough 

gross profit to cover just the direct cost of the wages of one full-time employee at minimum wage ($7.25 

* 2080 hours = $15,080) results in an estimate of $108,000. This means a gas station with a convenience 

store would need to make at least $108,000 in revenues in order to pay one person to work full-time at 

minimum wage, exclusive of all other direct and indirect costs that a gas station may need to pay (e.g., 

electricity, property taxes, franchise fees). As a result, while our supplemental analysis indicates that 

2,175 firms may be significantly impacted at the 1% revenue threshold, we find it hard to believe that any 

firm would be able to remain in continuing operation with annual revenues of less than $100,000.

 

25 A 2005 Federal Trade Commission report indicates that in the short run, a gasoline price increase of 10 percent would reduce consumer 

demand by just 2 percent. (See Federal Trade Commission, “Gasoline Price Changes: The Dynamic of Supply, Demand, and Competition,” 2005, 

p. ii.) While we acknowledge that the competitive nature of the gasoline market on an individual gas station basis may deter owners from passing 

through the cost to consumers, we believe that a compliance cost equivalent to less than one cent per gallon is relatively minor compared to the 

other costs and fees that are associated with the cost of gas to an owner.

26 See National Association of Convenience Stores (NACS), 2009 Fact Book, Table III-38, Benchmark Store Profit and Loss by Size Category –

2008.
EPA internal deliberative draft – do not cite or quote L-22

Exhibit 1. Number of Firms in NAICS 447 (Gas Stations) by Revenue Size*

547

3,123

3,862

10,007

16,708

28,574

13,402

4,506

2,018

617 268 136 101

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0-0.05

0.05-0.150.15-0.250.25-0.50

0.5-11-2.52.5-5

5-10

10-2525-50

50-100

100-250

250+

Revenue bin ($ million) Number of firms

* Notes: 1. NAICS 447 is comprised of 447110 (Gas Stations with Convenience Stores) and 447190 (Other Gasoline Stations) 

 2. Revenues ranges are based on 2002 Census data. We assume the distribution of firms estimated in 2008 is proportional to the distribution of firms in 2002.
EPA internal deliberative draft – do not cite or quote L-23

Exhibit 2. Cumulative Number of Firms in NAICS 447 by Revenue Size*

 $150,000; 3,670 

 $25,000,000; 82,747 

 $10,000,000; 80,729 

 $2,500,000; 62,821 

 $1,000,000; 34,247 

$500,000; 17,539 

 $250,000; 7,532 

 $50,000; 547

 $5,000,000; 76,223 

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000

Revenue Number of Firms

* Notes: 1. NAICS 447 is comprised of 447110 (Gas Stations with Convenience Stores) and 447190 (Other Gasoline Stations) 

 2. Revenues ranges are based on 2002 Census data. We assume the distribution of firms estimated in 2008 is proportional to the distribution of firms in 2002.

 3. For scaling reasons, we only show the number of firms earning up to $25 million in this chart.
EPA internal deliberative draft – do not cite or quote L-24

Exhibit 3. Estimated Curve 

 $50,000; 547

 $150,000; 3,670 

 $250,000; 7,532 

 $500,000; 17,539 

 $1,000,000; 34,247 

y = 0.0359x - 1283.6

R

2

 = 0.9985

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000

Revenue Number of Firms
Appendix M

Screening Analysis of Environmental Justice Impacts
Date: 

To: 

From: 

Copy: 

Subject: 

This mem

vicinity o

primary o

racial min

UST facil

justice co

environm

risks. Fac

outside of

Methodo

This analy

of potenti

“potential

and “refer

potentiall

facilities. 

Potential

The poten

within a r

and other

UST relea

UST syste

occurring

The refere

populatio

The coun

of data at 

larger are

provide a

July 22, 2

ChoYi Kw

Michael L

(RTI), Jam

Cynthia M

Analysis o

morandum do

of undergroun

objective wa

nority and lo

lities. This a

oncerns regar

mental justice

cility-specific

f the scope f

ology 

ysis is based

ially disadva

lly affected c

rence comm

ly disadvanta

The various

lly Affected

ntially affect

radial buffer 

r sources (Be

ases typicall

ems is gener

g microbial c

ence commu

ns. We utiliz

ty-level Cen

the Census 

ea than the 10

a useful comp

010 

wan (EPA) 

Lowry (RTI)

mie Cajka (R

Manson (IEc)

of Statistics 

ocuments RT

nd storage ta

s to determin

ow-income c

analysis is in

rding the loc

e analysis an

c health risk

for the analy

d on populati

antaged popu

communities

munities” (cou

aged populat

s data source

d and Refere

ted commun

distance of 

edient et al, 1

ly does not e

rally limited 

communities

unities were 

zed county-l

nsus paramet

block group

000 ft buffer

parative mea

1

, Gordon Br

RTI), and Jam

)

for Populati

TI’s assessm

ank (UST) fa

ne whether s

communities

tended to pr

cation of US

nd does not c

ks were unav

sis. 

ion statistics

ulations (e.g

s” in the vic

unty-level p

tions are loc

es and analys

ence Comm

nities in the v

1000 ft. Thi

1994; Doohe

exceed this e

through bio

s (Wilson et 

used in this 

level populat

ter values we

p level. Coun

rs around US

asure of pop

1

rown (RTI), 

mes Rineer (

ons Residing

ment of popul

facilities (i.e.

socioeconom

) are located

rovide inform

T facilities. 

couple popul

vailable to su

s from the 20

., minorities

inity of UST

opulations). 

cated prefere

sis methods 

munities 

vicinity of U

is distance is

er, 1999), wh

xtent. The tr

odegradation

al, 1986). 

analysis to c

tion statistic

ere produced

nty-level data

ST facilities

ulations at a

Brandon Be

(RTI) 

g Near UST 

lation data f

., retail moto

mically disad

d preferentia

mation relate

However, th

lation inform

upport such a

000 Census t

). A compar

T facilities (p

This compa

entially withi

are describe

UST facilities

s based on th

hich indicate

ransport of p

n of the conta

compare wit

cs to define t

d through po

a represent a

. As such, th

a larger scale

ergenroth 

Facilities 

for communi

or fuel establ

dvantaged po

lly within th

ed to potentia

he analysis is

mation with p

an evaluation

that indicate

rison is made

populations w

arison indica

in the vicinit

ed below. 

s were define

he draft UST

e that contam

petroleum hy

aminants by 

th the potent

he reference

opulation we

aggregate co

he county-lev

e than at the 

ities in the 

lishments). T

opulations (e

he vicinity of

al environme

s not a full 

potential hea

n, and it was

e the prevalen

e between 

within 1000 

ates whether 

ty of UST 

ed as people

T risk assessm

mination from

ydrocarbons 

naturallytially affecte

e communitie

eighted avera

onditions wit

vel statistics 

local facility

The 

e.g., 

f

ental 

alth 

s

nce 

ft) 

ment 

m

from 

d 

es. 

aging 

thin a 

y. 
The comp

significan

evaluated

scale chan

communi

useful sca

Socioeco

The follow

potentiall

• Pe

• Pe

an

• Pe

• Pe

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(Environm

are availa

communi

of block g

based on 

resolution

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undergoin

communi

“synthetic

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household

dasymetri

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estimates 

populatio

distributio

precision 

statistics (

group dat

based on 

(defining 

socioecon

However,

parison indic

ntly from cou

d. However, 

nges in the p

ties is small 

ale for comp

onomic Cen

wing socioe

ly affected an

ercent minor

ercent white 

nd did not sp

ercent in pov

ercent under

ercent under

rameters are 

mental Justic

able is the Ce

ties) were de

group data w

a synthetic p

n than raw C

c Populatio

e population 

ng EPA revi

ties in the vi

c population

g of Infectiou

ee http://ww

d (and indivi

ic algorithm

n population

at a much fi

n dataset, ho

on of househ

population d

(e.g., percen

ta (the smalle

the synthetic

a potentially

nomic result

, if a buffer e

cates whethe

unty populat

larger region

population. G

(1000 ft buf

parison. 

nsus Data 

conomic par

nd the refere

rity 

alone (the p

pecify “hispa

verty (the pe

5 years old

18 years old

selected to 

ce) and EO 1

ensus block 

erived direct

within each c

population d

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on Data 

data source 

ew) was util

icinity of US

n” dataset ori

us Disease A

ww.midasmod

idual) within

m based on de

n estimates (B

finer resoluti

ouseholds ar

holds represe

distribution 

nt minority) a

est Census u

c population

y affected co

s for that com

extended acr

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er local-scale

tions. Larger

ns aggregate

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ffer distance

rameters from

ence commu

percentage of

anic”) 

rcentage of 

d

address the f

13045 (Child

group. Coun

tly from the 

county. Resu

dataset, whic

utilized for 

lized for esti

ST facilities.

iginally deve

Agents Study

dels.org). Th

n the contigu

emographic i

Bhaduri et al

on (90 m gri

re placed ran

ented in the 

available na

associated w

unit at which

n dataset. Ac

ommunity) w

mmunity wo

ross multiple

2

e, potentially

r-scale popu

e more peopl

he area of int

e from UST f

m the 2000 C

unities: 

f the populat

individuals b

following ex

dren’s Healt

nty-level pop

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ults for the po

h is describe

the recent U

imating cond

. Specifically

eloped to sup

y (MIDAS), 

he synthetic 

uous United 

information 

l. 2007). The

id) than typi

ndomly withi

synthetic po

ationwide. Fo

with each hou

h the data are

ccordingly, if

were entirely

ould match t

e block grou

y affected co

ulations (e.g.,

le and thus w

terest for pot

facilities), th

Census were

tion that spe

below the fe

xecutive orde

th). The sma

pulation stat

a through pop

otentially af

ed below and

UST risk asse

ditions for th

y, the popula

pport infecti

funded by th

population d

States. Hous

from the 20

e LandScan 

cal Census b

in each Land

opulation dat

or the curren

usehold were

e available). 

f a 1000 ft bu

y within a sin

he associate

ups, the socio

ommunities d

, at the state 

would not ref

tentially affe

he county lev

e evaluated f

ecified their r

ederal povert

ers: EO 1289

llest unit at w

istics (for th

pulation wei

ffected popul

d provides g

essment (cur

he potentially

ation data so

ious disease 

he National 

data represen

seholds are l

000 U.S. Cen

dataset prov

blocks. In th

dScan grid c

ta reflect the

nt analysis, th

e based on C

Household 

uffer around

ngle block g

ed block grou

oeconomic r

differ 

level) could

flect smaller

ected 

vel provides 

for the 

race as “whi

ty line in 199

98 

which these 

he reference 

ighted avera

lations were 

greater spatia

rrently 

y affected 

ource was a 

models for t

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nt each 

located using

nsus and 

vides populat

he synthetic 

cell. The 

e best, highes

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d a UST faci

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up data. 

results for tha

d be 

ra 

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data 

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are statist

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the results

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weighted 

more pron

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(county-le

between t

ties. The dif

tially affecte

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with 95% co

sted in the ta

ts in Table 1

ss than 2 % i

exception of

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r each of the

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ent white alo

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indicating th

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provides add

the mean (SE

of the refere

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tically signif

ans. The T t

ly affected co

g differences

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that the diff

es greatly in

nt difference

and 4 provi

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and unweig

nounced diff

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sion 

ary, this anal

ties in the vi

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the potential

fference valu

ed communit

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rvals for the 

onfidence th

able. 

1 show that t

in all cases). 

f the percent

eater percent

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e potentially 

one differenc

more predom

rcent under a

hat smaller p

ditional statis

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ence commu

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ficant), as we

est evaluates

ommunities 

s larger than 

ecause all of 

ferences in th

ncreases the s

s in the mea

ide results fr

r to the unwe

pulation diff

one was the o

the magnitu

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ferences betw

el communit

lysis compar

icinity of US

tions). The d

lly affected a

5

ues result fro

ty values (so

unity). A diff

y 60,000 diff

mean differe

hat the differ

the mean dif

However, th

t under age 5

tages in the v

statistics are 

affected com

ce result is n

minance in th

age 5 and th

percentages 

stical results

e risk ratio (m

unities), resu

whether the d

ell as the est

s the null hy

are equal. T

the observe

the p-values

he means are

statistical po

ans even if th

om the popu

eighted resul

ferences are

only measur

de of the dif

suggests tha

ween the loc

ties. . 

red socioeco

ST facilities 

differences in

and the refer

5

om subtractin

o that a posit

fference resu

fference valu

ences. Based

rences in mea

fferences for

he difference

5) that the po

vicinity of U

positive (alb

mmunities: p

negative, indi

e reference v

e percent un

of the poten

for the unw

mean of pote

ults of a T tes

differences in

timated 95%

ypothesis tha

The resulting

d difference

s are very low

e statistically

ower of the t

he magnitude

ulation weigh

lts (Tables 1

generally gr

re that chang

fference rem

at facilities in

cal, potential

onomic Cens

(within 100

n the mean p

rence commu

ng the refere

tive result in

ult was produ

ues. Table 1 a

d on the stati

ans are betw

r the unweigh

es in the me

otentially dis

UST facilities

beit small) v

percent in po

icating that t

versus the po

nder age 18 d

ntially affecte

weighted anal

entially affe

st evaluating

n the estimat

% confidence 

at the means 

g p-values ind

s under the t

w, we can re

y significant

ests, allowin

es of the diff

hted statistic

 and 2). How

reater for the

ged from a ne

mains quite sm

n higher pop

lly affected c

sus data for p

0 ft) versus r

percentage so

unities are re

ence commu

ndicates a gre

uced for each

also provide

istical evalua

ween the upp

hted analysi

ans do consi

sadvantaged

s. Specifical

values, indica

overty and pe

the majority 

otentially aff

difference re

ed populatio

lysis, includi

cted commu

g the statistic

ted socioeco

intervals for

between the

dicate the pr

test assumpt

eject the null

. Note that th

ng detection 

ferences are 

cal analysis. 

wever, the re

e weighted a

egative to a 

mall. Comp

pulation area

communities

potentially a

reference co

ocioeconom

elatively sma

unity values f

eater percent

h facility, thu

es the estima

ation, we can

er and lower

s are relative

istently sugg

d populations

ly, the differ

ating a great

ercent minor

population 

ffected 

esults are slig

ns are made

ing standard

unities divide

cal significan

onomic statis

r the differen

e reference a

robability of

tion that the 

l hypothesis 

he large num

of statistical

small. 

The patterns

elative 

analysis resul

positive 

arison of the

as tend to hav

s and the 

affected 

ommunities 

mic results 

all (<2% 

from 

tage 

us 

ated 

n

r

ely 

gest 

s are 

rence 

ter 

rity. 

ghtly 

e up 

d

ed by 

nce 

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nces 

and 

f

null 

and 

mber 

lly 

s in 

lts. 

e

ve 
difference

analysis).

potentiall

with respe

and perce

18) was in

Referen

Bedient, P

Re

Bhaduri, B

ge

Ge

Dooher, B

As

Ca

ESRI. 200

Su

ht

Wilson, J

wa

 

e in all cases

 However, th

ly disadvanta

ect to the fol

ent minority.

n most cases

ces 

P.B., H.S. R

emediation. 

B., E. Brigh

eospatial and

eoJournal 6

B.P. 1999. P

ssessment of

annon. Lawr

09. 2009 Me

ummary. ESR

ttp://www.es

J.T., L.E. Lea

ater remedia

s for the unw

he differenc

aged populat

llowing Cen

 The percen

s smaller in t

ifai, and C.J

Englewood 

t, P. Colema

d temporal m

69:103–117. 

otential grou

f the Use of E

rence Liverm

ethodology S

RI, Redland

sri.com/libra

ach, M. Hen

ation techniq

6

weighted ana

es are statist

tions are loc

nsus-based m

ntage of the p

the vicinity o

J. Newell. 19

Cliffs, NJ: P

an, and M. U

modeling app

und and surf

Ethanol as a

more Nationa

Statement: E

s, CA. availa

ary/whitepap

nson, and J.N

que. Ground 

6

alysis; <5% i

tically signif

cated prefere

measures: per

population m

of UST facil

994. Ground

PTR Prentice

Urban. 2007. 

proach for po

face water im

a Fuel Oxyge

al Laborator

ESRI Data—B

able at 

pers/pdfs/info

N. Jones. 198

Water Moni

in all cases f

ficant, and th

entially in the

rcent white a

made up of ch

lities. 

d Water Cont

e-Hall, Inc.

LandScan U

opulation dis

mpacts. In H

enate. Edited

ry, Livermor

Business Loc

ousa-busines

86. In situ bi

itoring Revie

for the popul

he results do

e vicinity of

alone, percen

hildren (und

tamination: 

USA: a highstribution an

Health and En

d by D.W. R

re, CA. 

cations and B

ss-database.p

orestoration

ew 6:56–64.

lation weigh

o suggest tha

f UST faciliti

nt in poverty

der 5 and und

Transport a

-resolution 

nd dynamics

nvironmenta

Rice and G. 

Business 

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N

MsvrNa

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Percent WhPercent UnPercent UnPercent in PPercent Min

Note: Difference summMean values reflect thsimply by subtracting values do not necessaresults of the analysis

PePePePePe

Note: There are >56,0a fraction of facilities h

ensus Paramet

hite Alone 

der Age 5 der Age 18 

Poverty 

nority 

mary statistics (mean

he entire distribution, 

the reference commu

arily match values de

s are based on mean 

ercent White Aloercent Under Agercent Under Agercent in Povertercent Minority 

033 degrees of freedo

have no people living 

Table 1. Su

ter

a

M

n and median) were ca

whereas the median 

unity mean from the p

rived by subtracting tvalues, median result

Table 2. Stand

one 

ge 5 ge 18 ty 

om for this test (i.e. nu

within the 1000 foot 

ummary Result

1000 ft Buffer 

around Facility

Mean Median

70.3 81.3

6.7 6.5 

24.7 24.913.3 10.324.0 14.6

alculated from the dis

values are based onl

potentially affected co

the median values fro

ts are provided for co

dard Error, T T

1000 ft 

Buffer 

around 

Facility 

C

w

Fa

L

SE of Mean 

0.120 0.010 0.104 0.045 0.104 

umber of facilities). N

buffer. 

7 

ts for Census P

County wh

Facility is

Located

n Mean Med

70.8 74

6.7 6

25.6 2512.2 1123.8 20

stribution of difference

y on the 50th percenti

ommunity mean (e.g., 

om the underlying dist

ompleteness and as a

Test, and Risk R

County 

where 

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9
Appendix N

Cost Savings to State Financial Assurance Funds

This Appendix documents the methodology used to assess cost savings to state financial assurance funds under the 

final regulation. The specific results of this analysis are presented in Chapter 5.
N-1

The final regulation is expected to result in fewer releases from UST systems and is also 

expected to reduce the size of releases. This should result in cost savings due to reduced demand 

for remediation. To the extent that states use financial assurance funds to remediate these 

releases, the regulation should result in cost savings to these states. Moreover, if financial 

assurance funds reflect broad-based taxpayer contributions (e.g., through gasoline taxes), the 

regulation could represent reduced burden on taxpayers. To assess the potential magnitude of a 

reduction in releases on distributions made by state financial assurance funds, we employ the 

following screening-level analytic approach:

1. Identify states with active financial assurance funds: Classify each state or 

territory with an active financial assurance fund as Tier 1 (states that charge both a 

tank fee and a broad-based gasoline tax) or Tier 2 (generally, states that charge a tank 

fee and a limited gasoline tax).

2. Develop rough estimates of per-state avoided releases due to the final regulation: 

Count the number of instances in which UST systems in a state are affected by each 

requirement in the final regulation and assign avoided releases or avoided 

groundwater incidents across states based on this count.

3. Estimate avoided remediation costs per state: Multiply the number of releases 

avoided by the avoided cost per release or groundwater incident to obtain the gross 

avoided cost.

4. Adjust for average deductible: Subtract the deductible paid by owners and 

operators from the gross avoided cost to obtain the net avoided cost to state funds.

5. Calculate state cost savings: Sum net gains to state funds from avoided releases and 

avoided groundwater incidents.

Below, we explain each step in greater detail. While we perform the steps below on all 56 states and 

territories, as well as Indian Country, only the results for states with active financial assurance programs 

are presented as candidates for potential cost savings in Chapter 5 of this RIA.

Step 1: Assign Each State to a Tier 

Among the 56 U.S. states and territories and Indian country, the status of financial 

assurance funds is as follows: 35 have active funds; five have funds but no longer accept claims; 

and 16 do not have funds that provide all federally-required coverage. In general, states with 

active financial assurance funds charge a combination of gasoline taxes and recurring tank fees 

to generate revenues for their funds.1 We classify active funds into two tiers.2

 

1 At the time of this assessment, Connecticut had not fully sunsetted its state fund. It was therefore included 

in this assessment; in other words, this assessment is based on 36 state funds.

2 This classification is based on the status of state fund programs as reported by EPA at 

http://www.epa.gov/OUST/states/fndstatus.htm and the Association of State and Territorial Solid Waste 

Management Officials’ 2008 survey of state funds at 
N-2

 Tier 1 funds charge a broad-based gasoline fee, which means that consumers in 

those states or territories fund remediation via these fees. In many cases, these 

funds also charge a tank fee. Among the active funds, we classify 26 in this tier.3

 Tier 2 funds also levy gasoline fees, but these are narrower in scope. As a 

consequence, fewer consumers pay into the funds for these states. All Tier 2 states

also charge tank fees.

Exhibit N-1 summarizes the classification status for all states, territories, and Indian country. For 

this analysis, we consider only states with active funds.

Exhibit N-1

Status of Financial Assurance Funds in the U.S.

Active funds

Tier 2 if highlighted; otherwise, Tier 1

Fund exists, but no 

longer accepts claims No funds

Alabama Nebraska Arizona Alaska

Arkansas Nevada Florida Delaware

California New Hampshire Iowa District of Columbia

Colorado New Mexico Michigan Hawaii

Connecticut New York New Jersey Maryland

Georgia North Carolina Texas Oregon

Idaho North Dakota Wisconsin Washington

Illinois Ohio West Virginia

Indiana Oklahoma American Samoa

Kansas Pennsylvania Commonwealth of No. Mariana Islands

Kentucky Rhode Island Guam

Louisiana South Carolina Commonwealth of Puerto Rico

Maine South Dakota Virgin Islands

Massachusetts Tennessee Indian country

Minnesota Utah

Mississippi Vermont

Missouri Virginia

Montana Wyoming

Step 2: Count Instances in Which Systems are Affected and Assign Releases for Each 

Expert

Because the data to determine the number of requirements that affect each system in each 

state are not available, we use a simple allocation approach to approximate impacts for this 

screening analysis. First, we developed a count of the number of times each requirement affects 

 

http://www.astswmo.org/files/publications/tanks/2008StateFundSurvey/Table2FundingforStateFinancialAssuranceF

unds2008.pdf. 

3 We could not obtain clear information regarding funding mechanisms for Connecticut. We classify this 

state under Tier 1.
N-3

an UST system in each state.4For example, if spill prevention equipment testing affects 10,000 

systems per year, and secondary containment testing affects 5,000 systems, these requirements 

together affect systems 15,000 times. Across all requirements of the Selected Option, systems are 

affected approximately 2.2 million times. Because there are 577,981 systems, this represents 

approximately 3.7 requirements per system. As a simplifying assumption, we treat all 

requirements as equally effective in preventing releases or groundwater contamination. This is 

not consistent with responses from the experts, which indicate that some requirements could be 

substantially more effective at reducing releases. However, for purposes of this screening 

analysis, and because this analysis does not affect the primary results presented in the RIA, we 

do not attempt to adjust for relative effectiveness of the requirements. The uncertainty introduced 

by this assumption is small compared to overall uncertainty about the state-by-state distribution 

of the number of avoided releases. 

We assign avoided releases by state by first dividing the estimated total number of

avoided releases and avoided groundwater incidents by the total number of instances in which 

systems are affected. We perform this calculation separately for each expert’s responses. From 

these calculations, we obtain the following slope factors:

 For each additional instance in which a requirement affects an UST system, 

between 0.00026 and 0.0014 releases are avoided. 

 For each additional instance in which a requirement affects an UST system, 

between 0.000097 and 0.00042 groundwater incidents are avoided. 

We multiply these factors by the number of times systems are affected per state to obtain a statelevel distribution of avoided releases and avoided groundwater contamination incidents, specific 

to each expert’s response. Exhibit N-2 shows the average distribution of avoided releases across 

all experts for the Selected Option, ranked from lowest to highest. Although calculations are 

conducted separately, this exhibit presents the average of the four experts’ results for 

demonstration purposes.

 

4 This includes all requirements except for removal of deferrals for FCTs and AHFDSs. We convert 

requirements tabulated on the basis of facilities to systems using a factor of 2.71.
N-4

Exhibit N-2

Average Distribution of Avoided Releases, by State

For comparison to the average, we present the descriptive statistics of the expert-specific 

calculations:

 Mean: Ranges between 9.88 and 53.4

 Median: Ranges between 7.36 and 39.8

 Standard deviation: Ranges between 9.09 and 49.1

We note that this distribution can be misleading, as it does not normalize the data with respect to 

the number of systems located in each state or territory. Doing so results in the average

distribution of systems per release avoided as a consequence of the final regulation, shown in 

Exhibit N-3. States that already have a relatively large number of requirements have fewer 

releases avoided per system (i.e., a greater number of systems per release avoided). For instance, 

compare the outcome in California, where many of the proposed requirements already exist, with 

Indian country, where few of the proposed requirements are in effect in the baseline.
N-5

Exhibit N-3

Average Distribution of Systems per Release Avoided, by State

The slope factors calculated in this step substantially drive the results of our analysis. They are 

subject to two significant sources of uncertainty:

1. We do not know how many systems in each state will actually be affected by the final 

regulation. For example, suppose that two requirements each affect 10,000 and 

20,000 systems, respectively. It is possible that they could together affect as few as 

20,000 or as many as 30,000 total systems. For all states, we assume the upper end of 

this range as the basis for our analysis. Our results are biased to the extent that 

requirements in any state systematically overlap.

2. As described above, as a simplifying assumption, we treat all requirements as equally 

effective in preventing releases or groundwater contamination. This assumption is not 

consistent with the experts’ responses; however, the uncertainty introduced by this 

assumption is small compared to uncertainty about the state-by-state distribution of 

the number of avoided releases.

This distribution is too simplistic to be used to refine specific estimates of avoided costs 

due to the regulation. However, for the purpose of identifying the magnitude and distribution of 

cost impacts associated with state financial assurance funds, we believe this simple distribution is 

valid.
N-6

Step 3: Obtain Gross Avoided Cost for Each Expert

We define gross avoided costs as the sum across all states of the cost to remediate the 

releases that would be avoided under the final regulation (including averted groundwater 

contamination incidents), before adjustments for deductibles paid by owners and operators. 

Gross avoided cost is calculated according to the following steps: 

 For each expert, we first estimate the number of avoided releases by state. We 

multiply the number of times systems are affected in each state (i.e., the 

distribution described in Step 2) by the slope factor (i.e., the expert-specific value, 

ranging between 0.00026 and 0.0014, of how many releases are avoided per 

additional requirement).

 We then estimate the effective cost per avoided release for each expert. We sum 

avoided costs associated with avoided releases (as presented in Exhibit 4-7) and 

divide by the total number of avoided releases estimated by that expert. This 

results in discounted effective costs per avoided release for each expert, for the 

Selected Option, ranging between $120,000 and $130,000.

5

 We multiply this effective avoided cost per release by the number of releases

avoided by state to obtain gross avoided costs for each state. This calculation is 

performed separately for each expert.

 We then repeat the same procedure for groundwater incidents. This produces 

discounted effective costs per incident ranging from $210,000 to $220,000 across 

experts.

Steps 4: Adjust Gross Avoided Cost for Deductibles for Each Expert

To obtain the net avoided cost to state financial assurance funds, we reduce the gross 

avoided cost for each state as reported in ASTSWMO by the minimum and maximum of the 

range of deductibles (i.e., contributions to cleanup by owner/operator) possible for that state. In 

states with active trust funds, deductibles generally range from zero to $100,000. Lower-end 

deductibles average $8,114, while upper-end deductible average $20,212.6 Note that we do not 

make any adjustment to deductibles to reflect time value of money.

 

5 These effective costs rely on the remediation cost estimates provided by New Hampshire and Utah. The 

states provided cost data by release size (i.e., local soil, large soil, local groundwater, large groundwater). We adjust 

these costs by the relative probabilities of release size and release source, and apply these values to the experts’ 

estimates of avoided releases, by release source. We calculate effective costs by dividing total discounted avoided 

costs for each expert by that expert’s estimated number of avoided releases. As an alternative, to use the same cost 

per avoided release for each expert, we considered calculating the weighted average of the New Hampshire and 

Utah remediation costs according to the relative probabilities of release size. This weighted average cost is 

approximately $150,000 per release, compared to the expert-specific range of $120,000 to $130,000 per release 

($140,000 to $160,000 undiscounted). Therefore, use of this value would not change results substantially. 

6 These averages exclude Virginia and Minnesota for reasons subsequently discussed. For comparison, the 

median and mode deductibles for the lower-end deductibles are $5,000 and $10,000, while upper-end deductible 

median and mode are both $10,000.
N-7

Two states significantly exceed this range: Minnesota, with deductibles that can reach 

$2,000,000; and Virginia, where deductibles can reach $1,000,000. These levels of deductibles 

lead to negative estimates of savings for these particular states’ funds, an outcome that likely 

follows from our approach in Step 2. To conservatively correct for this anomaly, we remove 

these states and their avoided releases from our calculation of net avoided costs. For all other 

states, we reduce gross avoided costs by the product of the lower- or upper-end deductible and 

the number of releases avoided.

Steps 5: Sum Net Gains to State Funds from Avoided Contamination for Each Expert

Exhibit N-4 summarizes the net cost savings to state financial assurance funds under the 

Selected Option of the final regulation, averaged across the four experts for demonstration 

purposes. We repeat this process for Alternatives 1 and 2, as summarized in Exhibits N-5 and 

N-6.

To calculate the values in Chapter 5, the values for states identified as having Tier 1 or 

Tier 2 funds in Exhibits N-4 through N-6 are grouped and summed separately. However, 

Exhibits N-4 through N-6 do not account for the assumption that benefits accrue at the end of the 

year in which compliance activities are undertaken. As a result, simply summing the values for 

the Tier 1 and Tier 2 state funds below cannot be directly compared to the cost savings presented 

in Chapter 5. To calculate the values in Chapter 5, we discount back one year to generate the 

present value of total cost savings for each expert. We then average those present values across 

the four experts. The exhibits below are provided for demonstration purposes.
N-8

Exhibit N-4

Average Net Avoided Release and Avoided Groundwater Incident Remediation Costs for the Selected Option

State

Avoided Release Costs 1

Releases avoided x (Cost per release - deductible)

Avoided Groundwater 

Incident Costs

Incidents avoided x Cost per 

incident

Total

Avoided release costs + Avoided 

GW incidents costs Status

Avoided 

Releases

Low 

Deductible

High 

Deductible Upper-end Lower-end Avoided Incidents

Avoided GW 

Cost Upper-end Lower-end

AK 2.5 $0.00 $0.00 $0.00 $0.00 0.83 $0.00 $0.00 $0.00 No longer exists

AL 47 $5,000 $5,000 $5,600,000 $5,600,000 15 $3,200,000 $8,800,000 $8,800,000 Tier 1

AR 29 $7,500 $7,500 $3,400,000 $3,400,000 9.3 $2,000,000 $5,400,000 $5,400,000 Tier 1

AS 0.05 $0.00 $0.00 $0.00 $0.00 0.02 $0.00 $0.00 $0.00 No longer exists

AZ 23 $10,000 $10,000 $0.00 $0.00 7.3 $0.00 $0.00 $0.00 Not accepting claims

CA 62 $0.00 $20,000 $7,700,000 $6,500,000 20 $4,300,000 $12,000,000 $11,000,000 Tier 1

CO 14 $10,000 $10,000 $1,600,000 $1,600,000 4.4 $950,000 $2,500,000 $2,500,000 Tier 1

CT 20 $0.00 $0.00 $2,500,000 $2,500,000 6.5 $1,400,000 $3,900,000 $3,900,000 Tier 1

DC 2.0 $0.00 $0.00 $0.00 $0.00 0.66 $0.00 $0.00 $0.00 No longer exists

DE 3.1 $2,500 $2,500 $0.00 $0.00 1.0 $0.00 $0.00 $0.00 No longer exists

FL 58 $500 $30,000 $0.00 $0.00 19 $0.00 $0.00 $0.00 Not accepting claims

GA 97 $10,000 $10,000 $11,000,000 $11,000,000 31 $6,800,000 $18,000,000 $18,000,000 Tier 1

GU 0.82 $0.00 $0.00 $0.00 $0.00 0.26 $0.00 $0.00 $0.00 No longer exists

HI 5.2 $0.00 $0.00 $0.00 $0.00 1.7 $0.00 $0.00 $0.00 No longer exists

IA 16 $10,000 $10,000 $0.00 $0.00 5.3 $0.00 $0.00 $0.00 Not accepting claims

ID 8.6 $10,000 $10,000 $980,000 $980,000 2.8 $600,000 $1,600,000 $1,600,000 Tier 2

IL 60 $10,000 $100,000 $6,900,000 $1,500,000 19 $4,200,000 $11,000,000 $5,700,000 Tier 1

IN 40 $20,000 $35,000 $4,200,000 $3,600,000 13 $2,800,000 $7,000,000 $6,400,000 Tier 1

KS 21 $3,000 $3,000 $2,600,000 $2,600,000 6.9 $1,500,000 $4,100,000 $4,100,000 Tier 1

KY 27 $500 $13,000 $3,300,000 $3,000,000 8.6 $1,900,000 $5,200,000 $4,800,000 Tier 1

LA 37 $5,000 $5,000 $4,400,000 $4,400,000 12 $2,500,000 $6,900,000 $6,900,000 Tier 1

MA 26 $5,000 $10,000 $3,100,000 $3,000,000 8.5 $1,800,000 $5,000,000 $4,800,000 Tier 1

MD 20 $500 $1,000 $0.00 $0.00 6.6 $0.00 $0.00 $0.00 No longer exists

ME 4.7 $500 $97,000 $580,000 $130,000 1.5 $330,000 $900,000 $450,000 Tier 1

MI 60 $0.00 $0.00 $0.00 $0.00 19 $0.00 $0.00 $0.00 Not accepting claims

MN 39 $900,000 $2,000,000 -$30,000,000 -$73,000,000 13 $2,700,000 -$28,000,000 -$71,000,000 Dropped

MO 30 $10,000 $10,000 $3,400,000 $3,400,000 9.6 $2,100,000 $5,500,000 $5,500,000 Tier 1

MP 0.18 $0.00 $0.00 $0.00 $0.00 0.06 $0.00 $0.00 $0.00 No longer exists

MS 14 $0.00 $0.00 $1,700,000 $1,700,000 4.4 $950,000 $2,700,000 $2,700,000 Tier 1

MT 7.9 $5,000 $17,000 $940,000 $850,000 2.6 $550,000 $1,500,000 $1,400,000 Tier 1

NC 65 $20,000 $75,000 $6,800,000 $3,200,000 21 $4,500,000 $11,000,000 $7,800,000 Tier 1

ND 5.7 $5,000 $5,000 $680,000 $680,000 1.9 $400,000 $1,100,000 $1,100,000 Tier 2

NE 21 $25,000 $25,000 $2,100,000 $2,100,000 6.7 $1,400,000 $3,500,000 $3,500,000 Tier 1

NH 10 $5,000 $30,000 $1,200,000 $920,000 3.1 $680,000 $1,800,000 $1,600,000 Tier 1

NJ 36 $0.00 $0.00 $0.00 $0.00 12 $0.00 $0.00 $0.00 Not accepting claims
N-9

Exhibit N-4

Average Net Avoided Release and Avoided Groundwater Incident Remediation Costs for the Selected Option

State

Avoided Release Costs 1

Releases avoided x (Cost per release - deductible)

Avoided Groundwater 

Incident Costs

Incidents avoided x Cost per 

incident

Total

Avoided release costs + Avoided 

GW incidents costs Status

Avoided 

Releases

Low 

Deductible

High 

Deductible Upper-end Lower-end Avoided Incidents

Avoided GW 

Cost Upper-end Lower-end

NM 12 $0.00 $10,000 $1,500,000 $1,400,000 3.9 $850,000 $2,400,000 $2,200,000 Tier 2

NV 13 $10,000 $10,000 $1,400,000 $1,400,000 4.0 $870,000 $2,300,000 $2,300,000 Tier 2

NY 60 $0.00 $0.00 $7,400,000 $7,400,000 19 $4,200,000 $12,000,000 $12,000,000 Tier 2

OH 52 $11,000 $55,000 $5,900,000 $3,600,000 17 $3,600,000 $9,400,000 $7,200,000 Tier 2

OK 33 $0.00 $5,000 $4,100,000 $3,900,000 11 $2,300,000 $6,400,000 $6,200,000 Tier 1

OR 18 $0.00 $0.00 $0.00 $0.00 5.9 $0.00 $0.00 $0.00 No longer exists

PA 55 $5,000 $5,000 $6,600,000 $6,600,000 18 $3,900,000 $10,000,000 $10,000,000 Tier 2

PR 15 $0.00 $0.00 $0.00 $0.00 4.7 $0.00 $0.00 $0.00 No longer exists

RI 3.8 $20,000 $20,000 $400,000 $400,000 1.2 $260,000 $660,000 $660,000 Tier 1

SC 30 $25,000 $25,000 $3,000,000 $3,000,000 9.8 $2,100,000 $5,100,000 $5,100,000 Tier 1

SD 9.3 $20,000 $20,000 $980,000 $980,000 3.0 $650,000 $1,600,000 $1,600,000 Tier 1

TN 53 $10,000 $10,000 $6,000,000 $6,000,000 17 $3,700,000 $9,700,000 $9,700,000 Tier 1

Indian country 12 $0.00 $0.00 $0.00 $0.00 3.9 $0.00 $0.00 $0.00 No longer exists

TX 120 $1,000 $80,000 $0.00 $0.00 40 $0.00 $0.00 $0.00 Not accepting claims

UT 9.4 $10,000 $10,000 $1,100,000 $1,100,000 3.0 $650,000 $1,700,000 $1,700,000 Tier 1

VA 59 $500 $1,000,000 $7,300,000 -$52,000,000 19 $4,100,000 $11,000,000 -$48,000,000 Dropped

VI 0.5 $0.00 $0.00 $0.00 $0.00 0.15 $0.00 $0.00 $0.00 No longer exists

VT 10 $250 $10,000 $1,300,000 $1,200,000 3.3 $710,000 $2,000,000 $1,900,000 Tier 2

WA 34 $0.00 $0.00 $0.00 $0.00 11 $0.00 $0.00 $0.00 No longer exists

WI 36 $2,500 $0.00 $0.00 $0.00 12 $0.00 $0.00 $0.00 Not accepting claims

WV 14 $0.00 $0.00 $0.00 $0.00 4.6 $0.00 $0.00 $0.00 No longer exists

WY 4.4 $30,000 $30,000 $420,000 $420,000 1.4 $310,000 $730,000 $730,000 Tier 1

Total, Tier 1 770 N/A N/A $89,000,000 $77,000,000 250 $54,000,000 $140,000,000 $130,000,000 N/A

Total, Tier 2 220 N/A N/A $26,000,000 $23,000,000 70 $15,000,000 $41,000,000 $38,000,000 N/A

Total, No longer 

exists 120 N/A N/A $0.00 $0.00 37 $0.00 $0.00 $0.00 N/A

Total, Dropped 98 N/A N/A -$23,000,000 -$130,000,000 32 $6,900,000 -$16,000,000 -$120,000,000 N/A

Total, Not 

accepting claims 350 N/A N/A $0.00 $0.00 110 $0.00 $0.00 $0.00 N/A

Notes:

1. Average cost of remediation for an avoided release is $160,000 before discounting and $120,000 after discounting each requirement by the appropriate number of periods. Similarly, average 

cost for an avoided groundwater incident is $280,000 before discounting and $220,000 after discounting.
N-10

Exhibit N-5

Average Net Avoided Release and Avoided Groundwater Incident Remediation Costs for Alternative 1

State

Avoided Release Costs 1

Releases avoided x (Cost per release - deductible)

Avoided Groundwater 

Incident Costs

Incidents avoided x Cost per 

incident

Total

Avoided release costs + Avoided 

GW incidents costs Status

Avoided 

Releases

Low 

Deductible

High 

Deductible Upper-end Lower-end Avoided Incidents

Avoided GW 

Cost Upper-end Lower-end

AK 4.2 $0.00 $0.00 $0.00 $0.00 1.20 $0.00 $0.00 $0.00 No longer exists

AL 62 $5,000 $5,000 $8,100,000 $8,100,000 17 $4,400,000 $13,000,000 $13,000,000 Tier 1

AR 36 $7,500 $7,500 $4,700,000 $4,700,000 10.0 $2,600,000 $7,300,000 $7,300,000 Tier 1

AS 0.07 $0.00 $0.00 $0.00 $0.00 0.02 $0.00 $0.00 $0.00 No longer exists

AZ 28 $10,000 $10,000 $0.00 $0.00 8.0 $0.00 $0.00 $0.00 Not accepting claims

CA 97 $0.00 $20,000 $13,000,000 $11,000,000 27 $7,000,000 $20,000,000 $18,000,000 Tier 1

CO 20 $10,000 $10,000 $2,500,000 $2,500,000 5.5 $1,400,000 $3,900,000 $3,900,000 Tier 1

CT 25 $0.00 $0.00 $3,500,000 $3,500,000 7.2 $1,800,000 $5,300,000 $5,300,000 Tier 1

DC 2.6 $0.00 $0.00 $0.00 $0.00 0.73 $0.00 $0.00 $0.00 No longer exists

DE 4.1 $2,500 $2,500 $0.00 $0.00 1.2 $0.00 $0.00 $0.00 No longer exists

FL 76 $500 $30,000 $0.00 $0.00 22 $0.00 $0.00 $0.00 Not accepting claims

GA 120 $10,000 $10,000 $15,000,000 $15,000,000 35 $8,800,000 $24,000,000 $24,000,000 Tier 1

GU 1.00 $0.00 $0.00 $0.00 $0.00 0.29 $0.00 $0.00 $0.00 No longer exists

HI 6.5 $0.00 $0.00 $0.00 $0.00 1.8 $0.00 $0.00 $0.00 No longer exists

IA 28 $10,000 $10,000 $0.00 $0.00 7.8 $0.00 $0.00 $0.00 Not accepting claims

ID 14.0 $10,000 $10,000 $1,800,000 $1,800,000 3.9 $1,000,000 $2,700,000 $2,700,000 Tier 2

IL 80 $10,000 $100,000 $10,000,000 $2,900,000 23 $5,800,000 $16,000,000 $8,700,000 Tier 1

IN 53 $20,000 $35,000 $6,200,000 $5,400,000 15 $3,800,000 $10,000,000 $9,200,000 Tier 1

KS 27 $3,000 $3,000 $3,600,000 $3,600,000 7.6 $1,900,000 $5,500,000 $5,500,000 Tier 1

KY 35 $500 $13,000 $4,800,000 $4,400,000 9.9 $2,500,000 $7,300,000 $6,900,000 Tier 1

LA 46 $5,000 $5,000 $6,100,000 $6,100,000 13 $3,300,000 $9,400,000 $9,400,000 Tier 1

MA 43 $5,000 $10,000 $5,600,000 $5,400,000 12.0 $3,100,000 $8,700,000 $8,500,000 Tier 1

MD 27 $500 $1,000 $0.00 $0.00 7.6 $0.00 $0.00 $0.00 No longer exists

ME 6.9 $500 $97,000 $930,000 $270,000 1.9 $490,000 $1,400,000 $760,000 Tier 1

MI 76 $0.00 $0.00 $0.00 $0.00 21 $0.00 $0.00 $0.00 Not accepting claims

MN 49 $900,000 $2,000,000 -$38,000,000 -$92,000,000 14 $3,600,000 -$34,000,000 -$89,000,000 Dropped

MO 38 $10,000 $10,000 $4,800,000 $4,800,000 11.0 $2,700,000 $7,500,000 $7,500,000 Tier 1

MP 0.22 $0.00 $0.00 $0.00 $0.00 0.06 $0.00 $0.00 $0.00 No longer exists

MS 20 $0.00 $0.00 $2,800,000 $2,800,000 5.7 $1,500,000 $4,200,000 $4,200,000 Tier 1

MT 13.0 $5,000 $17,000 $1,700,000 $1,500,000 3.6 $920,000 $2,600,000 $2,500,000 Tier 1

NC 100 $20,000 $75,000 $12,000,000 $6,400,000 30 $7,500,000 $20,000,000 $14,000,000 Tier 1

ND 7.6 $5,000 $5,000 $990,000 $990,000 2.1 $540,000 $1,500,000 $1,500,000 Tier 2

NE 26 $25,000 $25,000 $2,900,000 $2,900,000 7.4 $1,900,000 $4,800,000 $4,800,000 Tier 1
N-11

Exhibit N-5

Average Net Avoided Release and Avoided Groundwater Incident Remediation Costs for Alternative 1

State

Avoided Release Costs 1

Releases avoided x (Cost per release - deductible)

Avoided Groundwater 

Incident Costs

Incidents avoided x Cost per 

incident

Total

Avoided release costs + Avoided 

GW incidents costs Status

Avoided 

Releases

Low 

Deductible

High 

Deductible Upper-end Lower-end Avoided Incidents

Avoided GW 

Cost Upper-end Lower-end

NH 12 $5,000 $30,000 $1,600,000 $1,300,000 3.5 $880,000 $2,500,000 $2,200,000 Tier 1

NJ 47 $0.00 $0.00 $0.00 $0.00 13 $0.00 $0.00 $0.00 Not accepting claims

NM 15 $0.00 $10,000 $2,100,000 $1,900,000 4.4 $1,100,000 $3,200,000 $3,100,000 Tier 2

NV 16 $10,000 $10,000 $2,000,000 $2,000,000 4.4 $1,100,000 $3,100,000 $3,100,000 Tier 2

NY 79 $0.00 $0.00 $11,000,000 $11,000,000 22 $5,700,000 $17,000,000 $17,000,000 Tier 2

OH 70 $11,000 $55,000 $8,700,000 $5,700,000 20 $5,000,000 $14,000,000 $11,000,000 Tier 2

OK 41 $0.00 $5,000 $5,600,000 $5,400,000 12 $3,000,000 $8,600,000 $8,400,000 Tier 1

OR 23 $0.00 $0.00 $0.00 $0.00 6.6 $0.00 $0.00 $0.00 No longer exists

PA 92 $5,000 $5,000 $12,000,000 $12,000,000 26 $6,600,000 $19,000,000 $19,000,000 Tier 2

PR 18 $0.00 $0.00 $0.00 $0.00 5.2 $0.00 $0.00 $0.00 No longer exists

RI 5.1 $20,000 $20,000 $590,000 $590,000 1.4 $370,000 $960,000 $960,000 Tier 1

SC 40 $25,000 $25,000 $4,500,000 $4,500,000 11.0 $2,900,000 $7,400,000 $7,400,000 Tier 1

SD 12.0 $20,000 $20,000 $1,400,000 $1,400,000 3.3 $850,000 $2,200,000 $2,200,000 Tier 1

TN 66 $10,000 $10,000 $8,400,000 $8,400,000 19 $4,800,000 $13,000,000 $13,000,000 Tier 1

Indian country 15 $0.00 $0.00 $0.00 $0.00 4.1 $0.00 $0.00 $0.00 No longer exists

TX 160 $1,000 $80,000 $0.00 $0.00 47 $0.00 $0.00 $0.00 Not accepting claims

UT 12.0 $10,000 $10,000 $1,600,000 $1,600,000 3.5 $890,000 $2,500,000 $2,500,000 Tier 1

VA 75 $500 $1,000,000 $10,000,000 -$65,000,000 21 $5,400,000 $16,000,000 -$59,000,000 Dropped

VI 0.6 $0.00 $0.00 $0.00 $0.00 0.17 $0.00 $0.00 $0.00 No longer exists

VT 13 $250 $10,000 $1,700,000 $1,600,000 3.6 $920,000 $2,700,000 $2,500,000 Tier 2

WA 43 $0.00 $0.00 $0.00 $0.00 12 $0.00 $0.00 $0.00 No longer exists

WI 47 $2,500 $0.00 $0.00 $0.00 13 $0.00 $0.00 $0.00 Not accepting claims

WV 19 $0.00 $0.00 $0.00 $0.00 5.4 $0.00 $0.00 $0.00 No longer exists

WY 5.9 $30,000 $30,000 $630,000 $630,000 1.7 $420,000 $1,000,000 $1,000,000 Tier 1

Total, Tier 1 1,000 N/A N/A $130,000,000 $120,000,000 300 $75,000,000 $210,000,000 $190,000,000 N/A

Total, Tier 2 310 N/A N/A $40,000,000 $37,000,000 87 $22,000,000 $62,000,000 $59,000,000 N/A

Total, No longer 

exists 150 N/A N/A $0.00 $0.00 42 $0.00 $0.00 $0.00 N/A

Total, Dropped 120 N/A N/A -$28,000,000 -$160,000,000 35 $8,900,000 -$19,000,000 -$150,000,000 N/A

Total, Not 

accepting claims 470 N/A N/A $0.00 $0.00 130 $0.00 $0.00 $0.00 N/A

Notes:

1. Average cost of remediation for an avoided release is $150,000 before discounting and $130,000 after discounting each requirement by the appropriate number of periods. Similarly, average 

cost for an avoided groundwater incident is $280,000 before discounting and $260,000 after discounting.
N-12

Exhibit N-6

Average Net Avoided Release and Avoided Groundwater Incident Remediation Costs for Alternative 2

State

Avoided Release Costs 1

Releases avoided x (Cost per release - deductible)

Avoided Groundwater 

Incident Costs

Incidents avoided x Cost per 

incident

Total

Avoided release costs + Avoided 

GW incidents costs Status

Avoided 

Releases

Low 

Deductible

High 

Deductible Upper-end Lower-end Avoided Incidents

Avoided GW 

Cost Upper-end Lower-end

AK 2.3 $0.00 $0.00 $0.00 $0.00 0.85 $0.00 $0.00 $0.00 No longer exists

AL 29 $5,000 $5,000 $3,700,000 $3,700,000 11 $2,400,000 $6,100,000 $6,100,000 Tier 1

AR 20 $7,500 $7,500 $2,500,000 $2,500,000 7.5 $1,600,000 $4,100,000 $4,100,000 Tier 1

AS 0.04 $0.00 $0.00 $0.00 $0.00 0.01 $0.00 $0.00 $0.00 No longer exists

AZ 16 $10,000 $10,000 $0.00 $0.00 5.9 $0.00 $0.00 $0.00 Not accepting claims

CA 33 $0.00 $20,000 $4,300,000 $3,700,000 12 $2,600,000 $7,000,000 $6,300,000 Tier 1

CO 7 $10,000 $10,000 $810,000 $810,000 2.5 $540,000 $1,400,000 $1,400,000 Tier 1

CT 10 $0.00 $0.00 $1,300,000 $1,300,000 3.6 $780,000 $2,100,000 $2,100,000 Tier 1

DC 1.4 $0.00 $0.00 $0.00 $0.00 0.53 $0.00 $0.00 $0.00 No longer exists

DE 1.0 $2,500 $2,500 $0.00 $0.00 0.4 $0.00 $0.00 $0.00 No longer exists

FL 36 $500 $30,000 $0.00 $0.00 13 $0.00 $0.00 $0.00 Not accepting claims

GA 68 $10,000 $10,000 $8,300,000 $8,300,000 25 $5,500,000 $14,000,000 $14,000,000 Tier 1

GU 0.39 $0.00 $0.00 $0.00 $0.00 0.15 $0.00 $0.00 $0.00 No longer exists

HI 3.6 $0.00 $0.00 $0.00 $0.00 1.3 $0.00 $0.00 $0.00 No longer exists

IA 11 $10,000 $10,000 $0.00 $0.00 4.0 $0.00 $0.00 $0.00 Not accepting claims

ID 7.7 $10,000 $10,000 $940,000 $940,000 2.9 $630,000 $1,600,000 $1,600,000 Tier 2

IL 43 $10,000 $100,000 $5,200,000 $1,400,000 16 $3,500,000 $8,700,000 $4,800,000 Tier 1

IN 29 $20,000 $35,000 $3,200,000 $2,800,000 11 $2,400,000 $5,600,000 $5,200,000 Tier 1

KS 15 $3,000 $3,000 $1,900,000 $1,900,000 5.5 $1,200,000 $3,100,000 $3,100,000 Tier 1

KY 17 $500 $13,000 $2,200,000 $2,000,000 6.2 $1,400,000 $3,500,000 $3,300,000 Tier 1

LA 25 $5,000 $5,000 $3,200,000 $3,200,000 10 $2,100,000 $5,300,000 $5,300,000 Tier 1

MA 16 $5,000 $10,000 $2,100,000 $2,000,000 6.0 $1,300,000 $3,400,000 $3,300,000 Tier 1

MD 13 $500 $1,000 $0.00 $0.00 4.8 $0.00 $0.00 $0.00 No longer exists

ME 4.0 $500 $97,000 $530,000 $140,000 1.5 $330,000 $860,000 $470,000 Tier 1

MI 42 $0.00 $0.00 $0.00 $0.00 16 $0.00 $0.00 $0.00 Not accepting claims

MN 19 $900,000 $2,000,000 -$14,000,000 -$35,000,000 7 $1,500,000 -$13,000,000 -$33,000,000 Dropped

MO 21 $10,000 $10,000 $2,500,000 $2,500,000 7.7 $1,700,000 $4,200,000 $4,200,000 Tier 1

MP 0.12 $0.00 $0.00 $0.00 $0.00 0.05 $0.00 $0.00 $0.00 No longer exists

MS 13 $0.00 $0.00 $1,700,000 $1,700,000 4.8 $1,000,000 $2,700,000 $2,700,000 Tier 1

MT 7.1 $5,000 $17,000 $900,000 $810,000 2.6 $570,000 $1,500,000 $1,400,000 Tier 1

NC 43 $20,000 $75,000 $4,900,000 $2,500,000 16 $3,500,000 $8,400,000 $6,000,000 Tier 1

ND 3.6 $5,000 $5,000 $460,000 $460,000 1.3 $290,000 $750,000 $750,000 Tier 2

NE 14 $25,000 $25,000 $1,500,000 $1,500,000 5.3 $1,200,000 $2,700,000 $2,700,000 Tier 1
N-13

Exhibit N-6

Average Net Avoided Release and Avoided Groundwater Incident Remediation Costs for Alternative 2

State

Avoided Release Costs 1

Releases avoided x (Cost per release - deductible)

Avoided Groundwater 

Incident Costs

Incidents avoided x Cost per 

incident

Total

Avoided release costs + Avoided 

GW incidents costs Status

Avoided 

Releases

Low 

Deductible

High 

Deductible Upper-end Lower-end Avoided Incidents

Avoided GW 

Cost Upper-end Lower-end

NH 5 $5,000 $30,000 $590,000 $470,000 1.7 $380,000 $970,000 $850,000 Tier 1

NJ 22 $0.00 $0.00 $0.00 $0.00 8 $0.00 $0.00 $0.00 Not accepting claims

NM 6 $0.00 $10,000 $770,000 $710,000 2.2 $470,000 $1,200,000 $1,200,000 Tier 2

NV 9 $10,000 $10,000 $1,100,000 $1,100,000 3.3 $710,000 $1,800,000 $1,800,000 Tier 2

NY 37 $0.00 $0.00 $4,900,000 $4,900,000 14 $3,000,000 $7,900,000 $7,900,000 Tier 2

OH 49 $11,000 $55,000 $5,900,000 $3,800,000 18 $4,000,000 $9,900,000 $7,700,000 Tier 2

OK 23 $0.00 $5,000 $3,000,000 $2,900,000 9 $1,800,000 $4,800,000 $4,700,000 Tier 1

OR 13 $0.00 $0.00 $0.00 $0.00 4.7 $0.00 $0.00 $0.00 No longer exists

PA 50 $5,000 $5,000 $6,300,000 $6,300,000 18 $4,000,000 $10,000,000 $10,000,000 Tier 2

PR 10 $0.00 $0.00 $0.00 $0.00 3.8 $0.00 $0.00 $0.00 No longer exists

RI 2.3 $20,000 $20,000 $260,000 $260,000 0.9 $190,000 $440,000 $440,000 Tier 1

SC 19 $25,000 $25,000 $2,000,000 $2,000,000 7.1 $1,500,000 $3,600,000 $3,600,000 Tier 1

SD 6.5 $20,000 $20,000 $730,000 $730,000 2.4 $530,000 $1,300,000 $1,300,000 Tier 1

TN 25 $10,000 $10,000 $3,100,000 $3,100,000 9 $2,000,000 $5,100,000 $5,100,000 Tier 1

Indian country 9 $0.00 $0.00 $0.00 $0.00 3.5 $0.00 $0.00 $0.00 No longer exists

TX 74 $1,000 $80,000 $0.00 $0.00 28 $0.00 $0.00 $0.00 Not accepting claims

UT 5.8 $10,000 $10,000 $710,000 $710,000 2.2 $470,000 $1,200,000 $1,200,000 Tier 1

VA 41 $500 $1,000,000 $5,400,000 -$36,000,000 15 $3,300,000 $8,700,000 -$32,000,000 Dropped

VI 0.3 $0.00 $0.00 $0.00 $0.00 0.12 $0.00 $0.00 $0.00 No longer exists

VT 5 $250 $10,000 $640,000 $590,000 1.8 $390,000 $1,000,000 $990,000 Tier 2

WA 23 $0.00 $0.00 $0.00 $0.00 9 $0.00 $0.00 $0.00 No longer exists

WI 22 $2,500 $0.00 $0.00 $0.00 8 $0.00 $0.00 $0.00 Not accepting claims

WV 10 $0.00 $0.00 $0.00 $0.00 3.9 $0.00 $0.00 $0.00 No longer exists

WY 2.7 $30,000 $30,000 $280,000 $280,000 1.0 $220,000 $500,000 $500,000 Tier 1

Total, Tier 1 500 N/A N/A $61,000,000 $53,000,000 190 $41,000,000 $100,000,000 $94,000,000 N/A

Total, Tier 2 170 N/A N/A $21,000,000 $19,000,000 62 $13,000,000 $34,000,000 $32,000,000 N/A

Total, No longer 

exists 79 N/A N/A $0.00 $0.00 29 $0.00 $0.00 $0.00 N/A

Total, Dropped 60 N/A N/A -$9,000,000 -$71,000,000 22 $4,900,000 -$4,100,000 -$66,000,000 N/A

Total, Not 

accepting claims 220 N/A N/A $0.00 $0.00 83 $0.00 $0.00 $0.00 N/A

Notes:

1. Average cost of remediation for an avoided release is $170,000 before discounting and $140,000 after discounting each requirement by the appropriate number of periods. Similarly, average 

cost for an avoided groundwater incident is $280,000 before discounting and $220,000 after discounting.
Appendix O

UMRA Written Statement
O-1

1. Introduction

Title II of the 1995 Unfunded Mandates Reform Act (UMRA; 2 U.S.C. 1531-1538) requires 

Federal agencies, unless otherwise prohibited by law, to assess the effects of their regulatory 

actions on state, local, and tribal governments and the private sector. Specifically, Section 202 of 

UMRA generally requires Federal agencies to prepare a written statement, including a costbenefit analysis, for each proposed and final regulation with “Federal mandates” that may result 

in expenditures by state, local, and tribal governments, in the aggregate, or to the private sector, 

of $100 million or more in any one year. Section 202 requires that “Written Statements” contain 

five elements of information:

1. An identification of the provision of Federal law under which the regulation is being 

promulgated;

2. A qualitative and quantitative assessment of the anticipated costs and benefits of the 

Federal mandate, including the costs and benefits to state, local, and tribal governments or the 

private sector, as well as the effect of the Federal mandate on health, safety, and the natural 

environment, including: (A) an analysis of the extent to which such costs to state, local, and 

tribal governments may be paid with Federal financial assistance (or otherwise paid for by the 

Federal Government); and (B) the extent to which there are available Federal resources to carry 

out the intergovernmental mandate;

3. Estimates by the agency, if and to the extent that the agency determines that accurate 

estimates are reasonably feasible, of: (A) the future compliance costs of the Federal mandate; 

and (B) any disproportionate budgetary effects of the Federal mandate upon any particular 

regions of the nation or particular state, local, or tribal governments, urban or rural or other types 

of communities, or particular segments of the private sector;

4. Estimates by the agency of the effect on the national economy, such as the effect on 

productivity, economic growth, full employment, creation of productive jobs, and international 

competitiveness of United States goods and services, if and to the extent that the agency in its 

sole discretion determines that accurate estimates are reasonably feasible and that such effect is 

relevant and material; and

5. Description of the extent of the agency’s prior consultation with elected representatives 

(under section 204) of the affected state, local, and tribal governments, including a summary of 

the comments and concerns that were presented by state, local, or tribal governments either 

orally or in writing to the agency; and a summary of the agency’s evaluation of those comments 

and concerns.

This document constitutes the “Written Statement” to meet this requirement for the revisions to 

the UST Regulations. The Environmental Protection Agency (EPA) has conducted a regulatory 

impact assessment (RIA) for this action, which has been submitted in the docket entitled 

“Assessment Of The Potential Costs, Benefits, And Other Impacts Of The Final Revisions To 

EPA’s Underground Storage Tank Regulations.”

2. Summary of the Final Regulation

As stated in the Federal Register notice for the final regulation, EPA is revising the 1988 

underground storage tank (UST) technical, financial responsibility, and state program approval 
O-2

regulations. These changes impose federal requirements that are similar to certain key portions of 

the Energy Policy Act of 2005 and make important targeted changes to the 1988 UST 

regulations. Regulatory changes include: adding secondary containment requirements for new 

and replaced USTs and piping; adding operator training requirements for UST system owners 

and operators; adding periodic operation and maintenance requirements for UST systems; 

removing certain deferrals; adding new release prevention and detection technologies; updating 

codes of practice; closing gaps in the 1988 UST regulations; making editorial and technical 

corrections; and updating state program approval requirements to incorporate these new changes.

The final regulation presents three regulatory options, as summarized in the table below:

Options Considered For The Final Regulation

Requirement Description

Options

Selected Alternative 1 Alternative 2

Release Prevention

Walkthrough inspections 30-day 30-day 

(as proposed in Nov 2011) Quarterly

Overfill prevention equipment 

inspections 3 year Annual Not required

Spill prevention equipment tests 3 year Annual 3 year

Containment sump testing 3 year Annual Not required

Testing after repairs to spill and 

overfill prevention equipment, and 

secondary containment

Required Required Required

Eliminate flow restrictors in vent 

lines for all new tanks and when 

overfill prevention equipment is 

replaced

Required Required No change from existing 

regulation

Release Detection

Operability tests for release 

detection equipment

Annual 

(plus annual check of sumps)

Annual 

(as proposed in Nov 2011)

Annual (plus annual check of 

RD equipment and sumps)

Add SIR/CITLD to regulations with 

performance criteria Required Required Required

Response to interstitial monitoring 

alarms Required Required Required

Groundwater and vapor monitoring 

for release detection

Continue to allow with site 

assessment 

5-year phase out

(as proposed in Nov 2011)

No change from existing 

regulation

Remove release detection deferral 

for emergency generator tanks Required Required (as proposed in Nov 2011) Required

Other

Require notification of ownership 

change Required Required Required

Closure of lined tanks that cannot be 

repaired according to a code of 

practice

Required Required Required

Requirements for demonstrating

compatibility with fuels > E10 and 

> B20

Required Required 

(as proposed in Nov 2011)

No change from existing 

regulation

Remove deferrals for airport 

hydrant fuel distribution systems 

and UST systems with fieldconstructed tanks

Regulate under alternative 

release detection 

requirements 

Require AHS/FCT notify 

implementing agency and 

report releases (with no other 

requirements)

Maintain deferral

EPAct-related Provisions

Operator training Required Required Required

Secondary containment Required Required Required
O-3

3. Legal Authority of Final Regulation

As stated in the Federal Register notice for this regulation, EPA is finalizing this regulation 

under the authority of sections 2002, 9001, 9002, 9003, 9004, 9005, 9006, 9007, and 9009 of the 

Solid Waste Disposal Act of 1970, as amended by the Resource Conservation and Recovery Act 

of 1976, as amended [42 U.S.C. 6912, 6991, 6991(a), 6991(b), 6991(c),6991(d), 6991(e), 

6991(f), 6991(h), 6991(i), and 6991(k)].

4. Summary of the Costs and Benefits

4A. Cost to State, Local, and Tribal Governments and the Private Sector

As estimated in the RIA, on an annualized basis, the total estimated regulatory compliance costs 

for the three options in today’s action are $160 million (Selected Option), $290 million 

(Alternative 1), and $70 million (Alternative 2). Of this amount, annualized costs to state/local 

governments total $6.8 million under the Selected Option, $14 million under Alternative 1, and 

$3.6 million under Alternative 2. These costs consist of estimated regulatory compliance costs 

for state/local governments that currently own or operate UST systems and annualized costs of 

$120,000 for states to implement the final regulation. EPA estimates that total annualized costs 

to owners and operators of tribally-owned UST systems are $0.67 million under the Selected 

Option, $1 million under Alternative 1, and $0.5 million under Alternative 2. The estimated 

annualized cost to the private sector is approximately $130 million under the Selected Option, 

$270 million under Alternative 1, and $67 million under Alternative 2.

4B. Extent to Which Costs to State, Local, and Tribal Governments May Be Paid by EPA 

or Other Federal Agencies, or to Which There Are Available Federal/EPA Resources to 

Carry Out a Federal Intergovernmental Mandate

EPA has historically provided substantial support to states, territories and tribes to support 

implementation of the UST program. In 2013, EPA provided $28.9 million in funding for UST 

release prevention program implementation in 50 states and 6 territories, and over $1.8 million in 

funding for tribal assistance. EPA does not anticipate providing additional UST release 

prevention funding for state/local/tribal governments.

4C. Estimates of Future Compliance Costs and Budgetary Effects on Particular Regions of 

the Country, or Particular State, Local, or Tribal Governments or Communities, or 

Particular Segments of the Private Sector

The RIA assessed a number of potential distributional effects of the final regulation cost impacts 

on:

(a) Retail motor fuels market sector: potential exits and employment impacts (Chapter 5)

(b) Energy supply, distribution, and use (Chapter 5)

(c) Public sector cost savings related to avoided releases (Chapter 5)
O-4

(d) Small entities (Chapter 5)

(e) Minority and low-income populations living near UST systems (Chapter 5)

(f) State/local government costs (Chapter 6)

(g) Tribal government costs (Chapter 6)

4D. Estimates of the Potential Effect on the National Economy

OMB’s 1995 guidance states: “...macro-economic effects tend to be measurable in nation-wide

econometric models, only if the economic impact of the regulation reaches 0.25 percent to 0.5 

percent of Gross Domestic Product (GDP). A regulation with a smaller aggregate effect is highly

unlikely to have any measurable impact in macro-economic terms unless it is highly focused on a 

particular geographic region or economic sector.”1 Based on the 2012 US GDP of $16 trillion, 

the 0.25 percent to 0.5 percent threshold is equal to $39 billion to $78 billion. The estimated 

annualized cost for this regulation at $160 million does not exceed either threshold.

5. Extent of EPA’s Prior Consultation with Elected Representatives of Affected State, 

Local, and Tribal Governments

Today’s final regulation is not expected to result in expenditures by state, local, and tribal

governments, in the aggregate, of $100 million or more in any one year. As a result, EPA does 

not believe Section 204 of UMRA applies, and did not consult with elected representatives of 

affected state, local, and tribal governments.

 

1

Source: Office of Management Budget, “Guidance for Implementing Title II of S. 1. [the Unfunded 

Mandates Reform Act],” March 31, 1995 memo.