Testimony

Before the Subcommittee on Oversight and

Investigations, Committee on Energy and Commerce,

House of Representatives

United States General Accounting Office

GAO

For Release on Delivery

Expected at 10:00 a.m. EST,

Thursday,

November 1, 2001

ENVIRONMENTAL

PROTECTION

Improved Inspections and

Enforcement Would

Ensure Safer Underground

Storage Tanks

Statement of John Stephenson,

Director, Natural Resources and Environment

GAO-01-176T
Page 1 GAO-01-176T Environmental Protection

Mr. Chairman and Members of the Subcommittee:

I am here today to discuss our recent report on the Environmental

Protection Agency’s (EPA) Underground Storage Tank (UST) program.1

The program is relevant to today’s hearing because studies have shown

that tanks that leak hazardous substances, such as methyl tertiary butyl

ether (MTBE), contaminate the soil or water and can pose health risks

ranging from nausea to kidney or liver damage or even cancer. Indeed,

leaks of MTBE—a fuel additive for reducing emissions and raising octane,

but also a suspected carcinogen—have been found in drinking water

sources and pose a very serious health risk and costly cleanup burden.

In 1984, the Congress created the UST program to protect the public from

potential leaks from the then more than 2 million tanks located across the

nation, mostly at gas stations. Under the program, EPA required tank

owners to install new leak detection equipment by the end of 1993 and

new spill-, overfill-, and corrosion-prevention equipment by the end of

1998. If these conditions were not met, owners had to close or remove

their tanks. In general, EPA has granted states the authority to implement

the program with agency oversight and monitoring, or states operate their

own program under state law with limited EPA oversight. EPA has

provided states funding (about $187,000 per state) for doing so. EPA

retains authority for a small number of tanks primarily located on Indian

lands. In addition, the Congress created a trust fund in 1986 to help EPA

and the states cover tank cleanup costs that owners and operators could

not afford or were reluctant to pay. The fund is replenished partly through

a $ .001/gallon tax on gasoline and other fuels. At the end of fiscal year

2000, the fund had a balance of about $1.5 billion.

Because the states are primarily implementing the provisions of the

program, we conducted a survey of all 50 states and the District of

Columbia to determine whether tanks are complying with program

requirements, how EPA and the states are inspecting tanks and enforcing

the requirements, and whether upgraded tanks still leak. The findings we

are discussing today and that were included in our report are based

primarily on the survey results, as well as on visits to the three EPA

regions with the largest number of tanks to monitor. In summary, we

found that:

 1 Environmental Protection: Improved Inspections and Enforcement Would Better

Ensure the Safety of Underground Storage Tanks (GAO-01-464, May 4, 2001).
Page 2 GAO-01-176T Environmental Protection

• About 1.5 million tanks had been permanently closed since the program

was created, leaving about 693,000 tanks subject to UST requirements.

Based on the states’ responses to our survey, we estimated that about 89

percent of these tanks had the required protective equipment installed, but

that almost 30 percent of them—more than 200,000 tanks—were not being

operated and maintained properly, thus, increasing the chance of leaks.

For example, 19 states reported frequent problems with corrosionprevention equipment and 15 states reported that leak detection

equipment was frequently turned off or improperly maintained. The states

and EPA attributed these operation and maintenance problems primarily

to poorly trained staff. Of the remaining 11 percent, or 76,000, tanks that

we estimated had not been retrofitted with the required equipment, EPA

and the states speculated that the tanks were probably inactive and empty.

Nevertheless, it is important to address them because experience has

shown that they may have leaked in the past, but the contamination, which

poses health risks, is not discovered until the tank is dug up for removal.

However, most states and EPA do not know if all inactive tanks are

empty—and we could not verify the accuracy and completeness of the

compliance data they reported—because they do not physically inspect all

tanks.

• In fact, over half of the states do not inspect all of their tanks frequently

enough to meet the minimum rate recommended by EPA —at least once

every 3 years. In addition, 27 states lack the authority to prohibit fuel

deliveries to stations with problem tanks—one of the most effective tools

for ensuring compliance with program requirements—relying instead on

issuing citations and fines. States said that they did not have the money,

staff, or, authority to conduct more inspections or more strongly enforce

tank compliance.

• Finally, states reported that even tanks with the required leak prevention

and detection equipment installed continue to leak, although the full

extent of the problem is not known. In response to our survey, 14 states

reported some tank leaks, 17 states said their tanks seldom or never

leaked, and 20 states did not know if leaks occurred before the tanks were

upgraded. EPA and some localities have studies underway to obtain better

data on leaks from upgraded tanks. EPA, as part of a set of four program

initiatives it announced in October 2000, is also considering whether it

needs to set new tank requirements, such as double-walled tanks, to

prevent further leaks.

To address these problems, our report recommends that EPA work with

the states to determine training needs and ways to fill them, and to more

specifically address the estimated 76,000 tanks that have not yet been

upgraded, closed, or removed as required. Our report also contains
Page 3 GAO-01-176T Environmental Protection

recommendations to EPA and suggestions to the Congress on ways to

promote better inspections and enforcement and to address related

resource shortfalls by expanding the use of the $1.5 billion trust fund

designated for tank cleanup to also cover additional inspection and

enforcement activities.

Based on state responses to our survey, we estimated that nearly 617,000,

or about 89 percent of the approximately 693,000 regulated tanks, had

been upgraded with the federally required equipment by the end of fiscal

year 2000. EPA data showed that about 70 percent of the total number of

tanks that its regions regulate on tribal lands had also been upgraded.

With regard to the approximately 76,000 tanks that we estimated have not

been upgraded, closed, or removed as required, 17 states and the 3 EPA

regions we visited reported that they believed that most of these tanks

were either empty or inactive. However, another five states reported that

at least half of their non-upgraded tanks were still in use. EPA and states

assume that the tanks are empty or inactive and therefore pose less risk.

As a result, they may give them a lower priority for resources. However,

states also reported that they generally did not discover tank leaks or

contamination around tanks until the empty or inactive tanks were

removed from the ground during replacement or closure. Consequently,

unless EPA and the states address these non-compliant tanks in a more

timely manner, they may be overlooking a potential source of soil and

groundwater contamination.

Even though most tanks have been upgraded, we estimated from our

survey data that more than 200,000 of them, or about 29 percent, were not

being properly operated and maintained, increasing the risk of leaks. The

extent of operations and maintenance problems varied across the states,

as figure 1 illustrates.

Most Tanks Have

Been Upgraded, but

Many Are Not

Properly Operated

and Maintained
Page 4 GAO-01-176T Environmental Protection

Figure 1: Compliance With Federal Equipment Requirements Varies Among States (total active tanks per state)

Source: GAO’s estimates based on responses to a survey of tank program managers in all 50 states

and the District of Columbia.

Note: EPA implements the federal tank program in Idaho and enforces certain requirements in New

York because these states lack some or all of the necessary laws.
Page 5 GAO-01-176T Environmental Protection

The states reported a variety of operational and maintenance problems,

such as operators turning off leak detection equipment. The states also

reported that the majority of problems occurred at tanks owned by small,

independent businesses; non-retail and commercial companies, such as

cab companies; and local governments. The states attributed these

problems to a lack of training for tank owners, installers, operators,

removers, and inspectors. These smaller businesses and local government

operations may find it more difficult to afford adequate training, especially

given the high turnover rates among tank staff, or may give training a

lower priority. Almost all of the states reported a need for additional

resources to keep their own inspectors and program staff trained, and 41

states requested additional technical assistance from the federal

government to provide such training.

To date, EPA has provided states with a number of training sessions and

helpful tools, such as operation and maintenance checklists and

guidelines. One of EPA’s tank program initiatives is also intended to

improve training and tank compliance with federal requirements, such as

setting annual compliance targets with the states. At the time of our

review, the Agency was just beginning to work out the details of how it

will implement this initiative and had set up a working group of state and

EPA representatives to begin work on compliance targets.
Page 6 GAO-01-176T Environmental Protection

According to EPA’s program managers, only physical inspections can

confirm whether tanks have been upgraded and are being properly

operated and maintained. However, only 19 states physically inspect all of

their tanks at least once every 3 years—the minimum that EPA considers

necessary for effective tank monitoring. Another 10 states inspect all

tanks, but less frequently. The remaining 22 states do not inspect all tanks,

but instead generally target inspections to potentially problematic tanks,

such as those close to drinking water sources. In addition, not all of EPA’s

own regions comply with the recommended rate. Two of the three regions

that we visited inspected tanks located on tribal land every 3 years. Figure

2 illustrates the states’ reported inspection practices.

Most States Do Not

Meet EPA’s

Recommendation to

Inspect All Tanks

Every 3 Years or Have

the Enforcement

Tools Needed to

Identify and Correct

Problems
Page 7 GAO-01-176T Environmental Protection

Figure 2: Frequency of Inspections Varies Among States (total active tanks per state)

Source: GAO’s estimates based on responses to a survey of tank program managers in all 50 states

and the District of Columbia.

Note: EPA implements the federal tank program in Idaho and enforces certain requirements in New

York because these states lack some or all of the necessary laws.
Page 8 GAO-01-176T Environmental Protection

According to our survey results, some states and EPA regions would need

additional staff to conduct more frequent inspections. For example, under

staffing levels at the time of our review, the inspectors in 11 states would

each have to visit more than 300 facilities a year to cover all tanks at least

once every 3 years, but EPA estimates that a qualified inspector can only

visit at most 200 facilities a year. Moreover, because most states use their

own employees to conduct inspections, state legislatures would need to

provide them additional hiring authority and funding to acquire more

inspectors. Officials in 40 states said that they would support a federal

mandate requiring states to periodically inspect all tanks, in part because

they expect that such a mandate would provide them needed leverage to

obtain the requisite inspection staff and funding from their state

legislatures.

In addition to more frequent inspections, a number of states stated that

they need additional enforcement tools to correct problem tanks. EPA’s

program managers stated that good enforcement requires a variety of

tools, including the ability to issue citations or fines. One of the most

effective tools is the ability to prohibit suppliers from delivering fuel to

stations with problem tanks. However, as figure 3 illustrates, 27 states

reported that they did not have the authority to stop deliveries. In addition,

EPA believes, and we agree, that the law governing the tank program does

not give the Agency clear authority to regulate fuel suppliers and therefore

prohibit their deliveries.
Page 9 GAO-01-176T Environmental Protection

Figure 3: Many States Lack Authority to Prohibit Fuel Deliveries to Problem Tanks (total active tanks per state)

Source: GAO’s estimates based on responses to a survey of tank program managers in all 50 states

and the District of Columbia.

Note: EPA implements the federal tank program in Idaho and enforces certain requirements in New

York because these states lack some or all of the necessary laws.
Page 10 GAO-01-176T Environmental Protection

Almost all of the states said they need additional enforcement resources

and 27 need additional authority. Members of both an expert panel and an

industry group, which EPA convened to help it assess the tank program,

likewise saw the need for states to have more resources and more uniform

and consistent enforcement across states, including the authority to

prohibit fuel deliveries. They further noted that the fear of being shut

down would provide owners and operators a greater incentive to comply

with federal requirements.

Under its tank initiatives, EPA has said that it will attempt to obtain state

commitments to increase its inspection and enforcement activities, or it

may supplement state activities in some cases. EPA’s regions have the

opportunity, to some extent, to use the grants that they provide to the

states for their tank programs as a means to encourage more inspections

and better enforcement. However, the Agency does not want to limit state

funding to the point where this further jeopardizes program

implementation. The Congress may also wish to consider making more

funds available to states to improve tank inspections and enforcement. For

example, the Congress could increase the amount of funds it provides

from the Leaking Underground Storage Tank trust fund, which the

Congress established to specifically provide funds for cleaning up

contamination from tanks. The Congress could then allow states to spend

a portion of these funds on inspections and enforcement. It has considered

taking this action in the past, and 40 states said that they would welcome

such funding flexibility.

In fiscal year 2000, EPA and the states confirmed a total of more than

14,500 leaks or releases from regulated tanks, although the Agency and

many of the states could not verify whether the releases had occurred

before or after the tanks had been upgraded. According to our survey, 14

states said that they had traced newly discovered leaks or releases that

year to upgraded tanks, while another 17 states said they seldom or never

detected such leaks. The remaining 20 states could not confirm whether or

not their upgraded tanks leaked.

EPA recognizes the need to collect better data to determine the extent and

cause of leaks from upgraded tanks, the effectiveness of the current

equipment, and if there is a need to strengthen existing equipment

standards. The Agency has launched studies in several of its regions to

obtain such data, but it may have trouble concluding whether leaks

occurred after the upgrades. In a study of local tanks, researchers in Santa

Clara County, California, concluded that upgraded tanks do not provide

Some Tanks Continue

to Leak Even After

They Have Been

Upgraded, Although

the Extent of this

Problem is Unknown
Page 11 GAO-01-176T Environmental Protection

complete protection against leaks, and even properly operated and

maintained tank monitoring systems cannot guarantee that leaks are

detected. EPA, as one of its program initiatives, plans to undertake a

nationwide effort to assess the adequacy of existing equipment

requirements to prevent leaks and releases and if there is a need to

strengthen these requirements, such as requiring double-walled tanks. The

states and the industry and expert groups support EPA’s actions.

In closing, the states and EPA cannot ensure that all regulated tanks have

the required equipment to prevent health risks from fuel leaks, spills, and

overfills or that tanks are safely operated and maintained. Many states are

not inspecting all of their tanks to make sure that they do not leak, nor can

they prohibit fuel from being delivered to problem tanks. EPA has the

opportunity to help its regions and states correct these limitations through

its tank initiatives, but it is difficult to determine whether the Agency’s

proposed actions will be sufficient because it is just defining its

implementation plans. The Congress also has the opportunity to help

provide EPA and the states the additional inspection and enforcement

authority and resources they need to improve tank compliance and safety.

Therefore, to better ensure that underground storage tanks meet federal

requirements to prevent contamination that poses health risks, we have

recommended to the Administrator, EPA, that the Agency

1. work with the states to address the remaining non-upgraded tanks,

such as reviewing available information to determine those that pose

the greatest risks and setting up timetables to remove or close these

tanks,

2. supplement the training support it has provided to date by having each

region work with each of the states in its jurisdiction to determine

specific training needs and tailored ways to meet them,

3. negotiate with each state to reach a minimum frequency for physical

inspections of all its tanks, and

4. present to the Congress an estimate of the total additional resources

the Agency and states need to conduct the training, inspection, and

enforcement actions necessary to ensure tank compliance with federal

requirements.
Page 12 GAO-01-176T Environmental Protection

In addition, the Congress may want to consider EPA’s estimate of resource

needs and determine whether to increase the resources it provides for the

program. For example, one way would be to increase the amount of funds

it appropriates from the trust fund and allow states to spend a limited

portion on training, inspection, and enforcement activities, as long as

cleanups are not delayed. The Congress may also want to (1) authorize

EPA to require physical inspections of all tanks on a periodic basis, (2)

authorize EPA to prohibit fuel deliveries to tanks that do not comply with

federal requirements, and (3) require that states have similar authority to

prohibit fuel deliveries.

Contact and Acknowledgments

For further information, please contact John Stephenson at (202) 512-3841.

Individuals making key contributions to this testimony were Fran

Featherston, Rich Johnson, Eileen Larence, Gerald Laudermilk, and

Jonathan McMurray.

(360155)

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