IV-1

Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

MANAGING UNDERGROUND STORAGE TANKS

RCRA SUBTITLE I

SECTION IV

In this section...

Overview........................................................... IV-1

Scope of the Underground Storage Tank

Problem ............................................................ IV-2

The Underground Storage Tank Regulatory

Program ............................................................ IV-3

- Program Scope ............................................. IV-3

- Notification..................................................... IV-4

- Technical Requirements ................................ IV-5

Lender Liability ................................................. IV-15

State Underground Storage Tank Programs .... IV-15

Inspections and Enforcement ........................... IV-16

Leaking Underground Storage Tank Trust

Fund ................................................................. IV-17

Summary .......................................................... IV-18

OVERVIEW

Across the United States, there are

approximately one million federally regulated

underground storage tanks in use that store

petroleum or hazardous substances. An UST is

defined as a tank and any underground piping

connected to the tank that has at least 10 percent

of its combined volume underground. This

definition includes the tank, connected

underground piping, any underground ancillary

equipment, such as valves and pumps, and

containment systems. Therefore, aboveground

tanks with extensive underground piping may

meet the definition of an UST. In order for a tank

to meet the definition of an UST it must also

contain a regulated substance. A regulated

substance is any hazardous substance, defined

under CERCLA §101(14), and petroleum. In other

words, the federal UST regulations apply only to

USTs storing either petroleum or hazardous

substances. Underground tanks holding

nonhazardous substances, such as water, are not

covered by these regulations.

The vast majority of USTs store petroleum

products at retail establishments, such as gas

stations, and at petroleum refining facilities. Less

than three percent of USTs store hazardous

substances. Placing tanks underground minimizes

hazards and provides a convenient place to store

liquid materials while hiding unsightly equipment.

These tanks are found at a variety of locations,

including convenience stores, airports, service

stations, small and large manufacturing facilities,

and government facilities. USTs at these sites are

used primarily to store gasoline, diesel fuel, crude

oil, hazardous chemicals, and heating oil. Many

of these tanks are made of bare, unprotected

steel, causing them to pose a substantial threat to

WHAT IS AN UST?

An UST is defined as a tank and any underground

piping connected to the tank that has at least 10

percent of its combined volume underground. This

definition includes the tank, connected underground

piping, any underground ancillary equipment, such

as valves and pumps, and containment systems.

WHAT IS A REGULATED SUBSTANCE?

A regulated substance is defined as any hazardous

substance, defined under CERCLA §101(14), and

petroleum.
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 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

human health and the environment from leaking

due to faulty installation, corrosion, tank or pipe

rupture, or spills.

With over 50 percent of the U.S. population

relying on ground water as their primary source of

drinking water, Congress acted to protect this

resource in 1984 by adding Subtitle I to RCRA in

1984. Under this Congressional mandate, EPA

was required to develop a comprehensive

regulatory program for USTs storing petroleum or

regulated hazardous substances. In 1988, EPA

published regulations that require owners and

operators of new tanks and tanks already in the

ground to prevent, detect, and clean up releases.

In 1986, Congress amended Subtitle I with the

passage of the Superfund Amendments

Reauthorization Act (SARA) by creating a fund for

corrective action for petroleum releases from

USTs; this fund is referred to as the Leaking

Underground Storage Tank (LUST) Trust Fund.

This section describes the UST program

regulatory requirements, the role of the states in

implementing the program, and the LUST Trust

Fund.

SCOPE OF THE UNDERGROUND

STORAGE TANK PROBLEM

Of the one million tanks currently in use and

subject to the federal regulations, less than half are

believed to be made of unprotected bare steel,

which can corrode, allowing contaminants to seep

into the ground and threaten the environment.

About 30,000 new releases are reported each

year. Between the beginning of the UST program

and September 1997, approximately 341,000

UST releases have been confirmed. EPA estimates

that about 60 percent or more of these releases

have affected ground water. Consequently,

leaking USTs pose a potentially widespread threat

to our nation’s ground water.

Releases of regulated substances into the

environment are generally attributed to corrosion,

faulty installation, and spills and overfills.

Corrosion occurs when bare metal, soil, and moist

conditions combine to produce an underground

electric current that destroys hard metal. Over

time, corrosion can create holes in the body of the

tank and piping, increasing the likelihood of leaks

into the soil. The speed and severity of corrosion

varies depending on site-specific factors.

Improper installation is also a typical cause of

UST failure. Proper installation is crucial to ensure

the structural integrity of both the tank and its

piping. Proper installation procedures include

excavating the soil, siting where the tank system

should be located, determining burial depth,

assembling the tank system, backfilling around the

tank system, and grading the surface soil (i.e.,

evening out surface where the soil was replaced).

Installation problems generally result from careless

installation practices that do not follow standard

industry codes and procedures. For example,

mishandling of the tank during installation can

cause cracks in fiberglass-reinforced plastic tanks

or damage the protective coating on steel tanks,

leading to corrosion.

Finally, spills and overfills, usually caused by

human error during product transfers, contribute

to tank leakage. Spills often occur when the tanks

are filled during routine product deliveries.

Although these spills are small, repeated releases

of any size can have substantial environmental

impacts. Overfills normally release much larger

RELEASES FROM USTS

An average of 30,000 new releases are reported

each year. Between the beginning of the UST

program and September 1997, approximately

341,000 UST releases have been confirmed. EPA

estimates that about 60 percent or more of these

releases have affected ground water.
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Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

volumes than spills. Overfills occur when tanks

are filled beyond their capacity and excess

product is released. Installation of spill and overfill

protection, in addition to following industry

standards for correct filling practices, help to

prevent such releases from occurring.

THE UNDERGROUND STORAGE

TANK REGULATORY PROGRAM

Congress, when developing RCRA Subtitle I,

chose to subject only about one-third of the total

number of UST systems that were in use when

the law was enacted to the UST program. The

tanks that were specifically exempted from the

scope of the regulations were selected by

Congress because these particular types of USTs

were regulated under federal, state, or local laws.

■ Program Scope

While tanks that have at least 10 percent of

their combined volume underground and are used

to store petroleum and hazardous substances are

subject to the RCRA Subtitle I program, not all

tanks meeting this definition of an UST are

required to comply with the requirements.

Congress specifically excluded certain tanks from

the definition, including:

• Farm and residential tanks of 1,100 gallons or

less capacity holding motor fuel used for

noncommercial purposes

• Tanks storing heating oil used on the premises

where it is stored

• Tanks on or above the floor of underground

areas, such as basements or tunnels

• Septic tanks and systems for collecting

wastewater and storm water

• Flow-through process tanks (i.e., tanks that are

part of production processes and have a

steady flow of materials through the tank

during operation)

• Pipeline facilities

• Surface impoundments, pits, ponds, or

lagoons

• Storm water or wastewater collection systems

• Liquid traps or associated gathering lines

directly related to oil or gas production and

gathering operations.

Upon examination of the UST universe, EPA

determined that there were additional tanks that

should not be subject to the federal regulatory

program due to their size, content, location, or

regulation under other programs. As a result, EPA

excluded the following tanks:

• UST systems holding hazardous wastes listed

or identified under RCRA Subtitle C, or a

mixture of such wastes and regulated

substances
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 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

• Wastewater treatment tank systems that are

part of a wastewater treatment facility

regulated under CWA

• Equipment or machinery that contains

regulated substances for operational purposes,

such as hydraulic lift tanks and electrical

equipment tanks

• UST systems with a capacity of 110 gallons or

less

• UST systems that contain de minimis

concentrations of regulated substances

• Emergency spill or overflow containment UST

systems that are expeditiously emptied after

use.

EPA also identified tanks that did not warrant

exclusion, but should not be subject to full

regulation. As a result, EPA deferred certain tanks

from the requirements for design and installation,

operation, release detection, release reporting and

investigation, closure, and financial responsibility.

These deferred tanks include:

• Wastewater treatment tank systems

• UST systems containing radioactive material

regulated under AEA

• UST systems that are part of emergency

generator systems at nuclear power generation

facilities

• Airport hydrant fuel distribution systems

• UST systems with field-constructed tanks.

UST systems that store fuel solely for use by

emergency power generators are deferred from

the release detection requirements only.

In order to fully protect human health and the

environment, these deferred tanks are still subject

to release response and corrective action

regulations to ensure that any leaks from a

deferred UST system will be addressed and

cleaned up. Additionally, all deferred tanks are

subject to an interim prohibition which generally

requires that such tanks installed after May 8,

1985, comply with certain technical requirements

that provide basic protection of human health and

the environment.

■ Notification

Because of the vast number of USTs already in

existence when Congress enacted RCRA Subtitle I,

EPA found that developing UST regulations and

classifying the number of USTs in the United States

was an intensive task. EPA’s first action in

responding to this mandate was to establish a

notification system allowing tracking of existing

USTs, as well as providing a mechanism to identify

when a new UST was brought into operation. As

a result, owners and operators of UST systems that

were in the ground on or after May 8, 1986, were

required to notify the state or local agency of the

tank’s existence, unless the tank was taken out of

operation on or before January 1, 1974. Any

owner and operator who brings an UST into use

after May 8, 1986, must notify the designated

state or local agency of the existence of the tank

system within 30 days of bringing the tank into
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Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

use. In addition, any person who sells a tank

intended to be used as an UST must inform the

purchaser of the notification requirement.

■ Technical Requirements

In response to the scope of the UST problem

and Congress’ mandate, EPA issued technical

performance standards for all USTs and regulations

to require petroleum UST owners and operators

to have the financial means to pay for cleanups

and to compensate third parties. These standards,

codified in 40 CFR Part 280, encompass

provisions for UST:

• Design, construction, and installation

• Operation

• Release detection

• Release reporting, investigation, and

confirmation

• Corrective action

• Closure

• Financial responsibility.

New vs. Existing Underground Storage Tank

Systems

At the time EPA’s technical regulations for

USTs came into effect, many tanks were already

being used to store regulated substances. To

accommodate the thousands of USTs in

existence at the time the federal

regulations were established, EPA

built a certain amount of

flexibility into the UST program

to ensure that tanks already in

use were covered by the new

program, yet not immediately

subjected to the new, potentially

NEW VS. EXISTING TANKS

New tanks are those that are installed, or that have

commenced installation, after December 22, 1988.

These tanks are expected to be in compliance with

all of the technical standards upon installation.

Existing tanks are those that were in service, or for

which installation had commenced, on or before

December 22, 1988. Existing tanks have until this

date to meet the performance standards for new

tanks, meet the upgrading requirements for existing

tanks, or be taken out of service.

costly, design standards. To address this issue, EPA

made a distinction in the UST regulations between

new tanks and existing tanks. New USTs are those

that were installed or that had commenced

installation after December 22, 1988. These tanks

are expected to be in compliance with all of the

technical standards upon installation.

Existing USTs are those that were in service,

or for which installation had commenced, on or

before December 22, 1988. At the time the

regulations went into effect, approximately two

million tanks were considered existing. While EPA

felt that these tanks could pose the same threat as

new tanks, and thus should be subject to the same

standards as new tanks, the Agency granted a

period during which the existing tanks could come

into compliance with the regulations. This phasein or upgrading period expires December 22,

1998. At that time, existing tanks must either

meet the performance standards for new

tanks, meet the upgrading requirements for

existing tanks, or be properly closed.

While the standards for existing USTs

are often identical to those for new

USTs, there are limited circumstances

where the standards for new USTs

would be impracticable for existing

USTs to implement immediately.

This chapter will focus primarily
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 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

on the standards for new USTs, contrasting them

with the standards for existing USTs where

appropriate.

Design, Construction, and Installation

Proper installation is crucial to ensuring the

structural integrity of both the tank and its piping.

Therefore, owners and operators of tank systems

must certify on their UST notification form that the

tank system was installed in accordance with the

manufacturer’s instructions and in accordance

with practices developed by nationally recognized

associations, such as the Petroleum Equipment

Institute (PEI).

Tanks are also required to be designed and

constructed in such a way as to protect them from

corrosion. This can be accomplished by

constructing the tank of materials that do not

corrode, such as fiberglass-reinforced plastic, or

outfitting a steel tank with a thick layer of

noncorrodible material. A third option, known as

cathodic protection, uses sacrificial anodes or a

direct current source to protect steel by halting the

naturally occurring electrochemical process that

causes corrosion (see Figure IV-1). Piping that

routinely contains product, and that is in contact

with soils, must meet similar corrosion protection

standards.

Owners and operators of USTs must also

ensure that any substance stored in the UST does

not react in such a way that it threatens the

integrity of the tank. For this reason, the tank and

piping must be made of, or lined with, a material

that is compatible with the substance stored in the

tank.

In order to remain in service after December

22, 1998, existing tanks that are not constructed

with noncorrodible material are required to install

corrosion protection as part of the upgrading

requirements. This may be in the form of

cathodic protection, an interior lining of

Figure IV-1: CATHODIC PROTECTION

noncorrodible material, or a combination of the

two. Corrosion protection in the form of cathodic

protection is also required for piping.

In addition to these design standards, tank

systems are subject to general requirements to

ensure proper operation and maintenance.

Operation

The general operating requirements provide

owners and operators with a set of standards to

ensure that routine daily operations are conducted

safely. Theses requirements are geared primarily

toward the prevention of spills, overfills, and

corrosion.

Spill and Overfill Protection

Spill and overfill protection requirements

include common-sense procedures, such as

ensuring that there is enough room in the tank to

receive a delivery of gasoline before the delivery is

UST corrosion is caused by an electric current that is created

when bare metal is placed in soil. Cathodic protection prevents

such corrosion. The above impressed current system sends

electric current from anodes, through the soil to the UST system

to protect the tank by overcoming the corrosion-causing current

normally flowing from the tank.

Rectifier

Tank

Current Path

Impressed

Current

Anode

Grade

Soil
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Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

standards for product transfer are based on

standards developed by nationally recognized

associations.

All tank systems are subject to the general

operating standards for spill and overfill control.

New tanks must have catchment basins and

overfill protection devices when they are installed.

Existing tanks must install spill and overfill

protection devices by December 22, 1998, as part

of their upgrading requirements. The only

exception to these requirements is that USTs,

either new or existing, which never receive

product transfers of more than 25 gallons at a

time, do not have to meet the spill and overfill

design standards.

Corrosion Protection

Both new UST systems and existing UST

systems that have been upgraded with corrosion

protection must follow guidelines for the

operation and maintenance of the corrosion

protection equipment. The regulations require

that corrosion protection systems be properly

operated and maintained to ensure that no

releases occur. In addition, UST systems with

cathodic protection must be periodically inspected

and tested to ensure that the equipment is

operating properly. Finally, the owner and

operator must keep records documenting

compliance with these operation, maintenance,

and inspection requirements.

Release Detection

EPA included release detection requirements

in the UST regulations to detect releases from

leaking tanks before they pose threats to or

damage human health and the environment. All

new USTs are required to have release detection

(also referred to as leak detection) for tanks and

piping when they are installed. Existing USTs were

Shutoff Valve

Fill Pipe

Float

Figure IV-2: OVERFILL PROTECTION

An UST owner and operator can meet overfill protection

requirements by using an overfill protection device. Such

devices either shut off delivery once the product has

reached a certain level in the tank, or sound an alarm that

notifies the delivery driver that the tank is almost full. For

example, an automatic shut off device (or fill pipe device)

has one or two valves that are operated by a float

mechanism. When the product reaches a certain level in the

tank (i.e., when the float mechanism reaches a certain level),

the device will shut off the flow of product into the tank.

made, and watching the entire delivery to prevent

spilling or overfilling. In addition, spills and

overfills must be eliminated or minimized by

installing certain equipment. For example,

catchment basins can contain small amounts of

product that are spilled when the delivery hose is

disconnected from the fill pipe. Overfill

protection devices either shut off delivery once

the product has reached a certain level in the

tank, or sound an alarm that notifies the delivery

driver that the tank is almost full (see Figure IV-2).

As with design and installation requirements,
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 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

Water Table

Inventory Control or

 Manual Tank Gauging

Water Table

Tank Tightness Testing

Inventory Probe for

Automatic Tank Gauging

Ground Water

Monitoring Well

Line Leak Detector

Vapor

Monitoring

Well

Figure IV-3: RELEASE DETECTION METHODS

Secondary

Containment

with

Interstitial

Monitoring

required to meet release detection requirements

for tanks and piping no later than December

1993.

There is no single release detection system

that is best for all sites, nor is there a particular

type of release detection that is consistently the

least expensive. Identifying the best leak

detection choice for an UST depends on a

number of factors, including cost (both initial

installation cost and long-term operation and

maintenance cost), facility configuration (such as

the complexity of piping runs and tank systems),

ground water depth, soil type, seasonal rainfall

and temperature ranges, availability of

experienced installers, and other variables best

evaluated by professionals.

Based on these and other factors, petroleum

UST owners and operators can choose any of

these seven release detection methods (see Figure

IV-3):

• Interstitial monitoring

• Automatic tank gauging systems

• Vapor monitoring

• Ground water monitoring

• Statistical inventory reconciliation (SIR)

• Manual tank gauging for small USTs

• Other methods meeting performance

standards.

The federal UST program also includes

different release detection requirements for

hazardous substance tanks as well as for

underground piping for all USTs. Lastly, the

federal regulations contain recordkeeping

provisions requiring owners and operators to

document compliance with the release detection

standards.

UST owners and operators can provide release detection for their tanks using several different methods. These include secondary

containment with interstitial monitoring, automatic tank gauging, vapor monitoring, ground water monitoring, and SIR (not pictured).

In some cases, owners and operators can combine either inventory control or manual tank gauging with tank tightness testing.

Owners and operators must also provide release detection for piping, including automatic line leak detectors for pressurized piping.
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Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

Interstitial monitoring involves the use of

secondary containment, such as a barrier, outer

wall, vault, or liner around the UST or piping to

prevent leaking product from escaping into the

environment. Alternatively, tanks can be

equipped with inner bladders to provide

secondary containment. If product escapes from

the inner tank or piping, it will then be directed

towards an interstitial monitor located between

the walls.

Automatic tank gauging systems use a probe

in the tank that is wired to a monitor to provide

information on product level and temperature.

These systems automatically calculate the changes

in product volume that can indicate a leaking

tank.

Vapor monitoring measures product fumes in

the soil around the UST to check for leaks. This

method requires installation of carefully placed

monitoring wells. Owners and operators can

perform vapor monitoring on a periodic basis, or

continuously, using permanently installed

equipment.

Ground water monitoring senses the

presence of liquid product floating in ground

water. This method requires installation of

monitoring wells at strategic locations in the

ground near the tank and along the piping runs.

To discover if leaked product has reached ground

water, owners and operators can periodically

check these wells by hand, or monitor them

continuously with permanently installed

equipment. This method cannot be used at sites

where ground water is more than 20 feet below

the surface.

With statistical inventory reconciliation,

owners and operators use sophisticated computer

software to conduct a statistical analysis of

inventory, delivery, and dispensing data. These

data are then analyzed to determine if any

product has been released.

Owners and operators of USTs with a capacity

of 1,000 gallons or less can use manual tank

gauging as the sole method of release detection

for the life of the tank. Manual tank gauging

requires owners and operators to keep the tank

undisturbed for at least 36 hours each week,

during which time the contents of the tank are

measured. At the end of each week, owners and

operators analyze the test results to determine if

the tank is leaking.

Any other release detection technology can be

used if it meets a performance standard of

detecting a leak of 0.2 gallons per hour with a

probability of detection of at least 95 percent and

a probability of false alarm of no more than five

percent.

These seven release detection methods are

monthly monitoring methods, and eventually, all

UST owners and operators will have to use at least

one of them. It may, in some cases, require a

significant investment of time and resources for

owners and operators to get these release

detection methods in place. In the interim, UST

owners and operators can combine either

inventory control or manual tank gauging with

tank tightness testing. The length of time that

owners and operators can use these temporary

methods depends on whether their UST meets the

standards for new or upgraded tanks, when the

UST was upgraded to meet corrosion protection

requirements and, in some cases, the size of the

tanks.

• Inventory control with tank tightness testing —

This method combines monthly inventory

control with periodic tank tightness testing.

Inventory control involves taking

measurements of tank contents, recording the

amount of product pumped each operating

day and reconciling these data at least once a

month. Tank tightness testing describes a

variety of methods used to determine if a tank
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 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

is leaking; most of these methods involve

monitoring changes in product level or volume

in a tank over a period of several hours.

• Manual tank gauging with tank tightness

testing — Owners and operators of tanks with

a capacity of 2,000 gallons or less can

temporarily use monthly manual tank gauging

with periodic tank tightness testing.

Hazardous Substance USTs

Hazardous substance USTs must meet

different release detection requirements. New

USTs must employ secondary containment with

interstitial monitoring. By enclosing such tanks

with a second wall, leaks can be detected quickly

and contained before harming the environment.

Existing USTs are not required to comply with

these standards until December 22, 1998, as part

of their upgrading requirements. Until that time,

owners and operators of existing hazardous

substance USTs can use any of the previously

discussed release detection methods for

petroleum USTs.

Piping

Underground piping for all USTs (both new

and existing petroleum and hazardous substance

tanks) that routinely contains a regulated

substance is also subject to release detection

standards. Pressurized piping requires automatic

line leak detectors and an additional monitoring

method, such as an annual line tightness test or

certain previously mentioned monthly monitoring

methods for tanks. Suction piping may or may not

require release detection, depending on how such

piping is designed. For example, suction piping

that has enough slope to allow product to drain

back into the tank does not require release

detection. However, suction piping that is subject

to release detection requirements must use a

periodic line tightness test or certain monthly

monitoring methods for tanks.

Recordkeeping

The release detection recordkeeping

requirements include maintaining results of any

sampling, testing, or monitoring, as well as

maintaining documentation of all calibration,

maintenance, and repair of release detection

equipment. These record retention provisions are

applicable to new and existing petroleum and

hazardous substance tanks and piping.

Release Reporting, Investigation, and

Confirmation

UST release detection requirements are

intended to prevent petroleum and hazardous

substances from leaking into the environment.

Unfortunately, many releases have already

occurred and may occur in the future. As a result,

the UST regulations stipulate procedures for

investigating and confirming suspected releases

from petroleum and hazardous substance USTs,

and reporting such releases to the implementing

agency. All UST owners and operators must be

attentive to a variety of warning signals that

indicate an UST may be leaking. These include

evaluation of results of release detection

monitoring and testing, observation of any unusual

operating conditions at the pump (such as erratic

or overly slow product flow), and evidence of

product leakage into the environment (e.g., the

presence of petroleum in nearby surface water or

wells). Upon observing such warning signals, the

owner and operator must immediately report the

suspected release to the implementing agency.

The owner and operator must then determine if

the suspected release is an actual release by

conducting tightness testing of the entire UST

system to determine a possible source. The owner
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Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

and operator must also measure for the presence

of contaminants in soil or ground water, and

determine the source of the release if such

contamination has been discovered.

If the results of tank tightness testing or the site

inspection (or both) indicate that no release has

occurred, then no further investigation is required.

If, however, the results of these investigations

indicate that a release has occurred, the owner

and operator must respond by immediately

stopping the release and repairing or replacing any

damaged equipment. If an owner and operator

chooses to repair rather than replace a damaged

pipe or tank, EPA requires the repair person to

follow standard industry codes, such as codes

established by the American Petroleum Institute

(API), for correct repair practices. In addition, the

owner and operator must take steps to clean up

the release through the UST corrective action

program.

Corrective Action

Corrective action for UST systems is designed

to ensure that releases of regulated substances do

not threaten human health and the environment.

While corrective action procedures are comprised

of a series of steps, the exact action to be taken

and the level of response required vary depending

on the severity of the release and the nature of the

containment.

Response to confirmed releases consists of

short-term and long-term stages. The initial stage

of the response consists of short-term actions to

stop and contain the leak or spill and steps to

ensure that the leak or spill poses no immediate

hazard to human health and safety, such as

removing explosive vapors and other fire hazards.

The owner and operator must also remove as

much product from the UST system as necessary

to prevent any further release; begin to recover

any free (released) product; and provide a report

to the implementing agency that includes a

description of the initial actions taken, an

assessment of the extent of contamination, and a

plan on how they will clean up the release.

Based on data collected during the initial site

characterization, the implementing agency will

decide whether further action is warranted. Some

leaks and spills will require additional long-term

attention to correct the problem. In these cases,

the implementing agency will request a corrective

action plan from the owner and operator that

describes how they will clean up contaminated

soil and ground water. The implementing agency

will then evaluate the plan to determine if it will

adequately protect human health and the

environment, taking into account such factors as

the type of substance released, potential impacts

on drinking water, and other site-specific

concerns. Once the corrective action plan is

approved, the owner and operator must

implement the plan and report the results of the

cleanup to the implementing agency.

One methodology that helps implementing

agencies address UST sites requiring corrective

action is risk-based decision-making (RBDM).

EPA encourages states to incorporate RBDM into

the implementation of their corrective action

programs. RBDM is a process that uses risk and

exposure assessment concepts to help UST

implementing agencies establish enforcement

priorities. Because of the vast number of leaking

USTs and the limited financial and human

resources available to implement corrective action

at these sites, RBDM is an important tool in

expediting assessments and cleanups at

contaminated sites. It is also used to tailor the

cleanup response to the level of risk posed by a

particular site. For example, implementing

agencies may use RBDM to categorize or classify

sites, to aid in establishing cleanup goals, and to

decide on the necessary level of oversight.
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 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

Closure

If an UST is taken out of service for any period

of time, the owner and operator must close the

UST system according to certain procedures in

order to ensure adequate protection of human

health and the environment. Closure can be done

on either a temporary or permanent basis.

Temporary Closure

If the owner and operator plan to bring the

tank system back into service at a later date, they

may close the tank temporarily. Temporary

closure requires the owner and operator to

continue to operate and maintain the corrosion

protection system and, if any product remains in

the tank, to maintain the leak detection system.

During temporary closure, the tank remains

subject to release response and corrective action

requirements. If the owner and operator take the

UST out of service for longer than three months,

they must leave the vent lines open and

functioning, and cap and secure all other lines

attached to the tank.

Permanent Closure

Tanks cannot be temporarily closed for a

period longer than 12 months unless they meet

the requirements for new or upgraded tanks. If

the tank does not meet these requirements, or if

the owner and operator decide to discontinue

using the tank altogether, they must permanently

close the UST system.

Permanent closure involves

a number of steps

designed to ensure that

the tank will pose no

threats to human

health or the

environment after

it is closed.

These steps

include notifying

the implementing

agency of the intent to close the tank, assessing

the tank and surrounding area to determine if any

releases have occurred, initiating corrective action

to clean up any such releases, removing all liquids

and accumulated sludges from the tank, and

either removing the tank from the ground or filling

it with an inert solid material, such as concrete or

sand (if state and local regulations allow it).

Changes In Service

In some cases, an owner and operator may

decide to use a formerly regulated UST system to

store a nonregulated substance. This is considered

a change in service. Before making this change,

the owner and operator must notify the

implementing agency, empty and clean the tank,

conduct a site assessment to determine if a release

has occurred, and initiate corrective action if

appropriate.

For both tank closures and changes in service,

the owner and operator must maintain results of

the site assessment for at least three years, or mail

the results to the implementing agency.

Financial Responsibility

When Congress amended RCRA Subtitle I in

1986, it recognized that UST corrective action

could be very expensive, and as a result, some

UST owners and operators might not be able to

pay for such cleanups. Similarly, Congress

discovered that releases from USTs had the

potential both to inflict severe damage on

neighboring property and threaten human health.

In response to these concerns, Congress directed

EPA to establish UST financial responsibility

requirements to ensure that owners and operators

would have the financial resources to pay for any

necessary corrective action, as well as compensate

third parties for bodily injury and property damage

(known as third-party damages) resulting from

leaking USTs.
IV-13

Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

The UST financial responsibility regulations

apply only to petroleum UST owners and

operators. State and federally owned and

operated USTs are exempt from these

requirements because it is assumed that such

entities already have the financial resources to pay

for corrective action and liability expenses.

The UST financial responsibility requirements

require coverage in both per occurrence and

annual aggregate amounts.

Per Occurrence Coverage

Per occurrence means the amount of money

that must be available to pay for the costs from

one leak. These requirements are based on

whether a facility markets (i.e., sells) petroleum to

the public and the volume of petroleum handled

at a facility. All petroleum marketers, and facilities

that handle an average of 10,000 gallons of

petroleum per month, are required to

demonstrate at least $1 million in per occurrence

coverage. Petroleum nonmarketers are required

to demonstrate at least $500,000 in per

occurrence coverage (see Figure IV-4). For

example, owners and operators of gas stations,

which are considered marketers because they sell

petroleum to the public, would need to

demonstrate $1 million in per occurrence

coverage for their USTs. On the other hand,

owners and operators of USTs used to fuel

vehicles that are rented to the public, which are

considered nonmarketers, would need to

demonstrate $500,000 in per occurrence

coverage if their average monthly throughput was

less than 10,000 gallons.

Annual Aggregate Coverage

Annual aggregate is the total amount of

financial responsibility coverage required to pay

for the costs of all leaks that might occur in one

year. These requirements are based on the

number of USTs owned and operated at all

locations. Owners and operators of over 100

USTs are required to demonstrate at least $2

million in annual aggregate coverage. Owners

and operators of 100 or less tanks are required to

demonstrate at least $1 million in annual

aggregate coverage (see Figure IV-5).

Mechanisms

Financial responsibility mechanisms are the

different ways an UST owner and operator can

show that funds are available to pay for corrective

action and liability requirements. An owner and

operator must demonstrate financial responsibility

through one or more of the following

mechanisms:

• State assurance funds — Most states have

established programs that can help pay for

cleanup and third-party liability costs resulting

from leaking USTs. Generally, the state

assurance funds are funded by gasoline taxes,

tank fees, or a combination of both. The

terms and conditions of the state assurance

funds vary greatly, and participation can either

UST owner and operator

Petroleum 

marketer

Petroleum 

Nonmarketer 

Monthly average 

throughput of 10,000 

gallons or less 

Monthly average 

throughput of over 

10,000 gallons

$1 million per 

occurrence $500,000 

per occurrence 

$1 million 

 per occurrence

Figure IV-4:

PER OCCURRENCE COVERAGE
IV-14

 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

• Insurance or risk retention group coverage —

An UST owner and operator can take out an

insurance policy to cover the corrective action

and liability coverage requirements. Owner

and operators can also use risk retention

groups, which are entities formed by

businesses or individuals with similar risks to

provide insurance coverage for those risks.

• Surety bond — A surety bond is a guarantee

by a surety company that it will meet the

obligations of the UST owner and operator in

the event of a failure to satisfy corrective

action or liability requirements. If the owner

and operator fails to pay the costs specified in

a bond, the surety company is liable for the

costs, but the owner and operator must then

repay the surety company. The owner and

operator must also establish a standby trust

fund into which any payments made by the

surety company will be deposited. EPA or the

states then use this trust fund to cover the

respective costs.

• Letter of credit — A letter of credit, issued by

a financial institution (such as a bank), is a

contract between the UST owner and

operator, the issuer, and the implementing

agency. Under the terms of this agreement, if

the UST owner and operator fails to pay for

corrective action or liability, the implementing

agency will direct the issuer to deposit such

payments into a standby trust fund.

• Trust fund — Under a trust fund, aggregate

funds for UST corrective action and liability

are held and administered by an impartial

third party (usually a bank). By placing such

money in an independent fund, the funds will

not be commingled with the owner’s and

operator’s other assets, and will always be

available on the event that a release occurs, or

a claim is made.

Figure IV-5:

ANNUAL AGGREGATE COVERAGE

100 or 

fewer tanks

$1 million

annual aggregate 

UST owner and operator 

Over 100 tanks 

 $2 million 

annual aggregate 

be mandatory or voluntary. Participating UST

owners and operators, in good standing with

their state assurance fund, can use that fund to

demonstrate financial responsibility.

• Financial test of self-insurance — Some

companies are of such size and financial

strength that they have the assets to absorb the

costs incurred by UST corrective action and

liability. As a result, such owners and

operators can demonstrate their financial

strength by using the financial test of selfinsurance to satisfy the UST financial

responsibility requirements.

• Corporate guarantee — While not all

companies will be able to meet the financial

test requirements, they may be owned by a

company (either corporate parent or

grandparent), may have a sibling company, or

may have a “substantial business relationship”

with another company that has the financial

standing and ability to meet the financial test

requirements. In these cases, an UST owner

and operator may arrange to have their

corporate parent, corporate grandparent,

sibling corporation, or firm with a substantial

business relationship meet the UST financial

responsibility requirements on their behalf and

provide them with a corporate guarantee.
IV-15

Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

possession of the property, becoming the owner of

the property and the tanks on it. Financial

institutions feared that they would then be subject

to the UST regulations, including financial

responsibility for corrective action and third-party

liability. Until recently, this potential for lending

institutions to be held liable for releases from

USTs, known as lender liability, greatly hampered

the ability of UST owners and operators to secure

the capital necessary to make tank improvements,

upgrade the UST, or comply with other

requirements.

EPA published the lender liability regulations

in 1995. The rule provides lenders with an

exemption from all federal UST regulatory

requirements provided that the lender, or secured

creditor, does not participate in the management

or operation of the UST system. This means that

the lender is exempt from corrective action

requirements and liability for cleanup costs of

contaminated property, both prior to and after

foreclosure, as long as the lender does not engage

in petroleum production, refining, or marketing,

does not manage or operate the UST, and does

not store petroleum in the UST after foreclosure.

STATE UNDERGROUND STORAGE

TANK PROGRAMS

States play a central role in the administration

of the UST program. Because of the size and

diversity of the UST regulated community, states

and local governments are in

the best position to oversee

the regulation of USTs.

Congress intended for states to

take over the day-to-day

administration of the UST

program from the federal

government; therefore, RCRA

Subtitle I allows EPA to

approve state UST programs to

operate in lieu of the federal

These financial responsibility mechanisms

were developed to meet the needs of the private

sector. Many local government UST owners and

operators had difficulty demonstrating compliance

with these mechanisms because of slight

differences in their financial management and

accounting practices. As a result, EPA

promulgated four additional options that local

governments could choose to demonstrate UST

financial responsibility. These mechanisms are:

• Bond rating test

• Financial test

• Guarantee

• Dedicated fund.

While the bond rating and financial tests are

modeled after the UST financial test of selfinsurance, the guarantee is similar to the corporate

guarantee, and the dedicated fund is similar to the

trust fund, these mechanisms were all tailored to

meet the special needs of local governments.

LENDER LIABILITY

Many UST owners and operators must secure

loans from financial and other institutions to

comply with environmental regulations, such as

UST upgrading and maintenance requirements.

These owners and operators often use the

property on which the UST is located as collateral

in order to secure the loan.

Financial institutions have

historically been reluctant to

extend loans to UST owners

and operators for fear of

later incurring UST cleanup

liability. For example, if a

bank held property as

collateral for a service station

that later became bankrupt,

the lender would take
IV-16

 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

UST program provided they are at least as

stringent as the federal program and ensure

adequate enforcement.

In order to be approved, a state program must

meet three requirements. First, the state program

must set standards for eight performance criteria

that are no less stringent than federal standards.

These include the standards for:

• New UST system design

• General operating requirements

• Release detection

• Upgrading

• Release reporting

• Corrective action

• Financial responsibility

• Closure.

Second, the program must contain provisions

that ensure adequate enforcement of the UST

regulations. This means that the state must have

adequate legal authority to implement and

enforce the regulations, including the authority to

inspect records and sites, require monitoring and

testing, and assess penalties. In some cases, states

will have to enact additional laws in order to have

adequate authority. The state program must also

include opportunities for public participation in

the state enforcement process.

Finally, the state program must regulate at least

the same universe of USTs covered by the federal

program, although many states may choose to

implement programs that are broader in scope

than the federal program. For example, a state

may regulate all heating oil tanks, even though the

federal UST program excludes tanks used for

storing heating oil for consumptive use on the

premises where stored. In such cases, EPA does

not review or approve the portion of the program

that is broader in scope than the federal program.

EPA can, however, approve requirements that are

more stringent than the federal program. For

example, a state may receive approval from EPA

to implement release detection requirements that

are more stringent than those contained in the

federal regulations.

Because state programs operate in lieu of the

federal program, owners and operators in states

that have an approved UST program do not have

to comply with two sets of statutes and

regulations. Once their programs are approved,

states have the lead role in UST program

enforcement; therefore, owners and operators

need only comply with their state regulations to

be in full compliance with all requirements. For

states without approved programs, EPA works in

conjunction with state officials to enforce the

federal UST regulations. These states may have

MOAs with their EPA Regional Office that allow

them to implement specific parts of the UST

regulations on behalf of EPA. Such agreements

outline the nature of the state’s responsibilities

and oversight powers, and the level of

coordination between the state and the EPA in

implementing the program.

INSPECTIONS AND ENFORCEMENT

RCRA Subtitle I provides authority for federal

and state personnel to request pertinent

information from tank owners and operators;

inspect and sample tanks; monitor and test tanks

and surrounding soils, air, surface water, and

ground water; respond to violations of tank

standards through civil or administrative actions;

and seek injunctive relief when human health or

the environment are endangered.

EPA may issue compliance orders for any

violation of the Statute or regulations. A violator

who fails to comply with the order may be subject
IV-17

Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

UST inspectors issue field citations at the time

they identify violations. Field citations are not

issued for serious violations. They are issued in

cases where the violation is a first-time violation

and is clear-cut, easily verifiable, and easily

correctable. A field citation couples a fine with a

requirement to correct the violation within 30

days. If a facility does not address the violation

within 30 days, however, follow-up enforcement

actions can assess additional penalties.

Apart from inspections, outreach and

education are among of the most commonly used

ways to familiarize UST owners and operators

with the UST regulations and promote

compliance. EPA and states produce and

distribute a wide variety of informational

materials, including booklets, leaflets, videos, and

slide shows, designed to assist owners and

operators in complying with the UST

requirements. EPA and states also conduct

seminars and workshops and use inspections as

opportunities to explain the requirements and

offer assistance. In addition, EPA works closely

with trade associations representing tank owners

and operators to provide compliance assistance

information to their members.

LEAKING UNDERGROUND

STORAGE TANK TRUST FUND

As part of SARA, Congress also created the

Leaking Underground Storage Tank Trust Fund.

The LUST Trust Fund has two purposes. First, it

provides money for overseeing corrective action

taken by a responsible party, usually a contractor

hired by an owner and operator of the leaking

UST. Second, the LUST Trust Fund provides

money for cleanups at UST sites where the owner

and operator is unknown, unwilling or unable to

respond, or which require emergency action.

HOW DO STATE UST PROGRAMS OPERATE?

Because state programs operate in lieu of the

federal program, owners and operators in states that

have an approved UST program do not have to

comply with two sets of statutes and regulations.

Once their programs are approved, states have the

lead role in UST program enforcement; therefore,

owners and operators need only comply with their

state regulations to be in full compliance with all

requirements.

to a civil penalty of up to $27,500 per tank per

day of noncompliance. In addition, any owner

and operator who knowingly fails to notify or

submits false information may be subject to civil

penalties of up to $11,000 for each tank for which

notification is not given or false information is

submitted. Furthermore, any owner and operator

who fails to comply with any regulatory

requirement under Subtitle I, may be subject to

civil penalties of up to $11,000 per tank, for each

day of violation. Criminal penalties are not

authorized under Subtitle I.

At all levels of government, regulatory

agencies are granted some discretion in

determining when to impose penalties. In the

UST program, inspectors often issue a notice of

violation or a warning letter to first-time violators

when a facility is inspected, provided that the

violations are not egregious. These informal

enforcement actions are less resource-intensive for

the states and are usually effective in promoting

compliance. States and EPA generally reserve

their strongest enforcement tools for use on

facilities whose owners and operators have not

been responsive to informal enforcement actions,

facilities whose violations pose significant threats

to human health and the environment, or facilities

who have a history of noncompliance. Federal

enforcement authorities include the use of field

citations and administrative or judicial (or both)

enforcement actions.
IV-18

 SECTION IV Managing Underground Storage Tanks — RCRA Subtitle I

The LUST Trust Fund is financed through an

excise tax on gasoline, diesel, and aviation fuels.

As of March 1997, about $1.8 billion had been

collected, $655 million of which has been given to

EPA. About $560 million has been dispersed to

state programs for state officials to use for

administration, oversight, and cleanup work. The

remaining LUST Trust Fund money has been used

by EPA for administrative activities: negotiating

and overseeing cooperative agreements;

implementing programs on Native American

lands; and supporting EPA Regional and state

offices.

To receive money from the LUST Trust Fund, a

state must enter into a cooperative agreement

with the federal government to spend the money

for its intended purpose. Every state has a

cooperative agreement with EPA. LUST Trust Fund

money is divided among EPA Regional Offices

based on a formula that uses state data. In fiscal

year 1995, each state received a base allocation

plus additional money depending on the

following: the number of confirmed releases in the

state; the number of notified petroleum tanks; the

number of residents relying on ground water for

drinking water; and the number of cleanups

initiated and completed as a percentage of total

confirmed releases.

States use LUST Trust Fund money to oversee

corrective action by a responsible party and to

clean up sites where no responsible party can be

found. Less than five percent of all cases have

been without a responsible party. To date, states

have used about one-third of their LUST Trust

Fund money for administration, one-third for

oversight and state-led enforcement, and onethird for cleanups.

SUMMARY

Across the United States, a wide range of

persons, from large and small businesses to private

entities, store regulated substances (petroleum and

CERCLA hazardous substances) in USTs. An UST

is defined as a tank and any underground piping

connected to that tank that has at least 10 percent

of its combined volume underground.

Not all tanks storing regulated substances are

subject to the UST regulations, as some tanks are

specifically exempted from the regulations due to

their regulation under other laws.

In an effort to protect human health and the

environment from releases from regulated USTs,

EPA promulgated technical performance standards

designed to ensure safe design, operation,

maintenance, and closure. These standards,

codified in 40 CFR Part 280, encompass

provisions for UST:

• Design, construction, and installation

• Operation

• Release detection

• Release reporting, investigation, and

confirmation

• Corrective action

• Closure

• Financial responsibility.

When the UST regulatory program came into

existence, there were over two million tanks

already in the ground. To accommodate these

USTs, EPA built flexibility into the regulatory

program to allow such tanks to upgrade during a

phase-in period. As of December 22, 1998, such

LEAKING UNDERGROUND STORAGE TANK

TRUST FUND

The LUST Trust Fund provides money to states to

oversee corrective action by a responsible party and

to clean up sites where the owner and operator is

unknown, unwilling, or unable to respond, or which

require emergency action.
IV-19

Managing Underground Storage Tanks — RCRA Subtitle I SECTION IV

existing tanks must either meet the performance

standards for new tanks, meet the upgrading

requirements for existing tanks, or be taken out of

service.

The UST technical requirements may be

expensive to comply with. As a result, many

owners and operators secure loans from private

lending institutions. However, if owners and

operators default on such loans, banks may

foreclose on property containing such USTs. By

default, the bank may become responsible and

liable for compliance with the federal UST

requirements, including the cleanup of all

releases. In order to shield lending institutions

from such requirements, and remove the

disincentive for issuing such loans in the first

place, EPA promulgated a lender liability provision

to exempt lending institutions from the UST

requirements provided they do not manage or

operate the UST.

The UST program also includes state program

approval provisions that are designed to help

facilitate the delegation of UST program

implementation to the states. This provides states

the authority to ensure proper compliance with

the federal standards, and allows states with

approved programs to have primary enforcement

responsibility. In order for a state to receive

approval, its program must be no less stringent

than the federal program, cover the same universe

of tanks covered by the federal program, and

provide for adequate enforcement of the state

UST program. The UST program also includes

provisions regarding inspections and enforcement.

 Finally, the UST program includes a LUST

Trust Fund. Under the LUST Trust Fund, EPA

disperses money to states that have cooperative

agreements with the Agency to provide money for

overseeing corrective action taken by a

responsible party and to provide money for

cleanups at UST sites where the owner and

operator is unknown, unwilling or unable to

respond, or which require emergency action.