***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

1

Task Order No. 1010 – General Technical and Programmatic Support in 

Implementing the Energy Policy Act of 2005

Amendment 1, TDD #11

Task 3 – Conduct Analyses: Delivery Prohibition

December 18, 2006

EXECUTIVE SUMMARY 

The Energy Policy Act of 2005 required the U.S. Environmental Protection Agency

(EPA) to develop and publish guidelines that address the delivery prohibition processes 

and procedures that states receiving Subtitle I funding must follow. “Delivery

prohibition” means prohibiting the delivery, deposit, or acceptance of product (e.g., 

gasoline) to an underground storage tank (UST) that has been determined to be ineligible 

by EPA or a state implementing agency for such delivery, deposit, or acceptance. 

On August 7, 2006, EPA released the “Grant Guidelines to States for Implementing the 

Delivery Prohibition Provision of the Energy Policy Act of 2005.” Currently, EPA is 

considering developing a rule on delivery prohibition. The delivery prohibition 

regulations could possibly be applied to USTs located in states that receive Subtitle I

funding, states that do not receive this funding, and to Tribal lands. The regulations 

would be directed primarily at USTs containing petroleum or petroleum products.1

This report profiles industry sectors and facilities potentially affected by delivery

prohibition mechanisms. The industry profiles provide an overview of an industry’s size, 

activities, and market conditions. The report also estimates the number of USTs and 

facilities within these industry sectors, as well as the universe of USTs and facilities 

located in states and on Tribal lands.

Industry Sectors Potentially Impacted by Delivery Prohibition Guidelines

EPA reported 641,881 active USTs subject to federal regulation as of September 30, 

2006.2 Depending on which mechanisms are used to implement delivery prohibition, the 

following industry sectors could potentially be affected:

 Petroleum distributors, including: 1) terminals that supply refined petroleum 

products; 2) tank truck carriers; and 3) jobbers (also known as petroleum and 

petroleum product merchant wholesalers by the U.S. Census Bureau).

 

1

In 1988, EPA estimated that approximately 97 percent of tanks store gasoline and other petroleum 

products (heating oil, aviation fuel, used oil, etc.). The remaining three percent store chemicals, including 

hazardous substances. ICF Incorporated, Regulatory Impact Analysis of Technical Standards for 

Underground Storage Tanks, Volume 1, August 24, 1988, pp. 1-6. E2Inc.’s analysis of 13 state UST 

databases found that 96.5 percent of tanks store petroleum products, 1.8 percent store used oil, 0.3 percent 

store chemicals and hazardous substances, the contents of 1.1 percent are listed as other, and the contents of 

0.3 percent of tanks are listed as unknown.

2 EPA memorandum, “FY 2006 End-of-Year Activity Report,” dated November 14, 2006. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

2

 Motor fuel retailers, including: 1) convenience stores; 2) service stations; and 

3) “hypermarketers” (high-volume retailers such as superstores and cost clubs).

 General businesses, governments, and institutions owning or operating USTs that 

are needed to support economic activity at their facilities. 

Petroleum Distributors

Petroleum bulk stations and terminals: According to the 2002 Economic Census, 3,982 

stations and terminals provided petroleum or refined petroleum products to wholesale 

distributors or jobbers. Fuel is typically piped from the refinery to a terminal where it is 

stored and loaded onto trucks for distribution to service stations and other end users. 

Delivery prohibition mechanisms will likely not impact this industry directly, but could 

indirectly impact operations and processes with dispatchers, tank truck carriers, and/or 

jobbers.

Tank truck carriers: Trucks carry fuel from the terminal to the consumer. They are 

owned or leased by jobbers, major oil companies, or other commercial users. According 

to the National Tank Truck Carriers, there are 30,000 tank trucks involved in fuel 

delivery. Private fleets belonging to major oil companies comprise 20 percent of fuel 

tank transporters, for-hire common carriers make up 55 percent, and petroleum jobbers 

own 25 percent.3

Jobbers: According to the 2002 Economic Census, there are 3,216 establishments 

operated as petroleum and petroleum product merchant wholesalers, also known as 

jobbers. The petroleum jobber acts as a “middleman” between refineries and motor fuel 

retailers or commercial end users. Some jobbers transport fuel by tank truck directly 

from the regional pipeline terminal to their customers. Other jobbers keep inventories of 

products at private or leased tank farms. 

Motor Fuel Retailers

Motor fuel retailers include convenience stores that sell gasoline and other motor fuels as 

well as traditional service stations. The number of establishments in the motor fuel retail 

sector varies depending on the source. The 2002 Census Bureau identified 121,446 

establishments. The American Petroleum Institute (API) estimates that there are 169,000 

retail gasoline outlets.4 The National Association of Convenience Stores (NACS) 

conducts an annual survey of gasoline retail outlets, and identified 168,000 retail gasoline 

facilities.5 Based on an extrapolation of UST data from nine states to the nation, E2Inc. 

estimated 141,776 motor fuel retail facilities. For this report, E2 Inc. relied primarily on 

the NACS’s information because of their comprehensive statistics and analyses that 

illuminate market conditions and trends. 

 

3 E-mail correspondence from John Conley, National Tank Truck Carriers, December 2006.

4 American Petroleum Institute, “Growth: The Market Determines the Price.” Fact sheet. 

5 NACS, 2006 Gas Price Kit, “How Do Retailers Get – and Sell – Gasoline?, www.nacsonline.com
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

3

Most motor fuel retailers buy from jobbers. Large retail customers buy directly from 

major oil companies. Convenience stores sell 75 percent of gasoline in the U.S. 

Hypermarkets sell 8 percent. The remaining 17 percent of gasoline is sold by traditional 

service stations. Only 5 percent of gasoline retail operations are owned by major oil 

companies. 

General Business, Governments, and Institutions

USTs are owned and operated by other sectors in general business, governments, and 

institutions. They include:

 Agriculture;

 Commercial; 

 Communications and Utilities;

 Construction;

 Government (local, state, and federal);

 Institutions (such as hospitals, religious, and educational facilities);

 Manufacturing; 

 Mining;

 Services; and

 Transportation.

Estimated Universe of USTs and Facilities

Exhibit ES-1 presents the number of USTs and facilities for retail motor fuel sales, 

agriculture, commercial, communications and utilities, hospitals, manufacturing, and 

transportation. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

4

Exhibit ES-1. Number of Facilities and USTs by Industry Sector

Industry Sector NAICS Number of Facilities Number of Tanks

Retail Motor Fuel Sales 447 168,000 526,008

Petroleum Storage

Agriculture

(crop production and animal 

production)

111, 112 889 1,610

Commercial

(wholesale trade, retail trade, 

accommodation, and food 

services) 

42, 44-45, 72 

(excluding 447)

22,730 52,271

Communications and Utilities

(wired telecommunications 

carriers; and electric power 

generation, transmission, and 

distribution)

5171, 2211 6,972 10,223

Institutional

(hospitals only)

622 2,330 3,812

Manufacturing 31-33 9,261 15,259

Transportation

(air, water, truck, transit, 

pipeline, and airport 

operations)

481, 483-486, 

48811

8,559 15,140

Used Oil Storage Not calculated Not calculated

Chemical Storage Not calculated Not calculated

This list of industry sectors is not comprehensive. The industry sector categories were 

limited by publicly available information. Many other sectors, such as construction, 

mining, and government, use USTs to support their activities. 

For the government sector, the UST Compliance Act required each federal agency to 

provide Congress and EPA with information on the number, location, and compliance 

status of federally-owned or operated USTs by August 8, 2006.6 State agencies are 

required to provide information about federal, state, and local USTs to EPA by August 8, 

2007.7 To date, the U.S. Department of Defense (DoD) has identified 4,355 USTs on 

DoD land, of which 4,314 are owned and operated by DoD. It estimates that 30 percent 

 

6

Section 1528(b), “Federal Facilities,” of Title XV, Subtitle B, of the Energy Policy Act of 2005 (i.e., the 

UST Compliance Act) required that “each Federal agency that owns or operates one or more underground 

storage tanks, or that manages land on which one or more underground storage tanks are located, shall 

submit to the Administrator, the Committee on the Energy and Commerce of the United States House of 

Representative, and the Committee on the Environment and Public Works of the Senate a compliance 

strategy report.”

7The UST Compliance Act requires states to submit a report to EPA on compliance of federal, state, and 

local government-owned tanks.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

5

of these tanks have not been inspected.8 The U.S. Department of Energy estimates that it 

owns or operates 170 USTs containing petroleum or petroleum products.9 Other federal 

agency reports were not publicly available or could not be located through Internet 

searches. 

E

2

Inc.’s analysis did not attempt to estimate the number of tanks and facilities containing 

non-petroleum products. However, an analysis of 13 state UST databases indicates that 

96 percent of tanks and 93 percent of facilities store petroleum products. In addition, 1.8 

percent of tanks and 4.4 percent of facilities store used oil. A small percentage of tanks 

and facilities (0.3 percent) store chemicals or hazardous substances. The content of 1.1 

percent of tanks and 1.8 percent of facilities is designated as “other.” In addition, the 

content 0.3 percent of tanks and 0.4 percent of facilities is designated as unknown.

The Number of USTs and Facilities in States and on Tribal Land

Appendix A lists the number of active USTs and facilities in each of the 50 states (and 

six territories), except those located on Tribal lands. The appendix also provides the 

percentage of UST facilities in significant operational compliance with UST release 

detection and release prevention regulations. Collectively, states have 635,450 active 

tanks at 239,859 facilities.10 Sixty-five percent of recently-inspected USTs in these states 

were found to be in significant operational compliance with federal UST requirements. 

In early 2006, E2Inc. performed an analysis to inform EPA’s tribal strategy working 

group about the status of USTs on Tribal land.11 This analysis identified 2,951 active 

regulated USTs on Tribal land. Of these active tanks, 857 had not been inspected since 

December 1998. Of these 857 tanks, 641 had never been inspected.

 

8U.S. Department of Defense, Underground Storage Tank Compliance Strategy Report, Report to Congress 

and EPA, August 2006, p. 5.

9 U.S. Department of Energy, U.S. Department of Energy Underground Storage Tank (UST) Compliance 

Strategy Report, July 31, 2006.

10 The number of active USTs for most of the states is based on EPA’s report on UST corrective action 

measures for end-of-year FY 2006. This report provides all of the data on regulatory compliance rates. E2

Inc. obtained the number of active USTs and facilities for 13 states from an analysis of their online UST 

databases. From these 13 databases, E2Inc. calculated a tank to facility ratio of 2.65. For the remaining 

states and territories, the number of active facilities was calculated by dividing the number of active tanks 

in each state by this ratio. 

11E2

Inc., Tribal Strategy Technical Analysis Summary, draft report prepared for OUST, March 24, 2006. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

6

1. INTRODUCTION 

The Energy Policy Act of 2005 required the U.S. Environmental Protection Agency

(EPA) to develop and publish guidelines that address the delivery prohibition processes 

and procedures that states receiving Subtitle I funding must follow. “Delivery

prohibition” means prohibiting the delivery, deposit, or acceptance of product (e.g., 

gasoline) to an underground storage tank (UST) that has been determined to be ineligible 

by EPA or a state implementing agency for such delivery, deposit, or acceptance. 

On August 7, 2006, EPA released the “Grant Guidelines to States for Implementing the 

Delivery Prohibition Provision of the Energy Policy Act of 2005.” 12 Currently, EPA is 

considering developing a rule on delivery prohibition. The delivery prohibition 

regulations could possibly be applied to USTs located in states that receive Subtitle I

funding, states that do not receive this funding, and to Tribal lands. The regulations 

would be directed primarily at USTs containing petroleum or petroleum products.

This report profiles industry sectors and facilities potentially affected by delivery

prohibition mechanisms. The industry profiles provide an overview of an industry’s size, 

activities, and market conditions. The report also estimates the number of USTs and 

facilities within these industry sectors, as well as the universe of USTs and facilities 

located in states and on Tribal lands. 

1.1. Scope of work

As part of this work, EPA’s Office of Underground Storage Tanks (OUST) asked E2Inc. 

to perform two subtasks:

 UST Industry Profile – Characterize the universe of potentially impacted UST 

facilities by NAICS code, states, and Indian Country.

 UST Facility Profile – Characterize representative UST facilities by size, number 

of USTs per facility, and other relevant factors of operation potentially impacted 

by the potential action.

Although the profiles characterize potentially impacted industries and facilities, they do 

not estimate compliance costs or economic impacts associated with carrying out delivery

prohibition mechanisms.

1.2. General Approach

E

2

Inc. compiled information from several government and industry sources, including 13 

state UST databases, to characterize potentially affected industry sectors and the universe 

of USTs and facilities. Specifically, E2 Inc. reviewed and analyzed information from the 

following resources:

 

12 U.S. EPA, Grant Guidelines to States for Implementing the Delivery Prohibition Provision of the Energy 

Policy Act of 2005, August 2006, www.epa.gov/oust.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

7

EPA

 OUST’s delivery prohibition grant guidelines (final 8/7/06 version).

 OUST’s corrective action measures reports, especially the FY2006 End-of-Year 

Activity Report (11/14/06).13

 OUST’s Web site for information on legal definitions, regulations, and state 

programs.

 EPA’s Economic Analysis Resource Report, which provides guidance on the 

content of industry profiles.14 E

2

Inc. also benchmarked industry profiles 

previously developed by EPA to support regulatory analyses. 

 EPA’s sector notebook summaries for the ground transportation industry and the 

petroleum refining industry. 

 The report, Regulatory Impact Analysis for Financial Responsibility 

Requirements for Petroleum Underground Storage Tanks, prepared in 1988 to 

support regulatory analysis and rulemaking for the UST program.

Government Agencies

 The U.S. Census Bureau’s 2002 data on the economy, agriculture, and 

transportation. 

 The Energy Information Agency’s reports and statistics on the petroleum 

industry.

 The U.S. General Accounting Office’s 2001 report on the compliance status of 

USTs across the country.

15

State Agencies

 E

2

Inc. conducted an internal survey of the online UST databases publicly 

available from UST programs in 50 states and the territories. Based on this 

survey, we identified 13 databases of USTs that provided tank, facility, and 

industry sector information. The states were Alabama, Alaska, Delaware, Florida, 

Georgia, Maryland, Massachusetts, Minnesota, Missouri, Nevada, Tennessee, 

Virginia, and Wisconsin. E2Inc. extrapolated the data from these states to 

estimate the national universe of regulated USTs and facilities for seven industry

sectors.

Industry Associations

 Summaries of interviews conducted by E2Inc. in November 2005 with the 

American Petroleum Institute (API), the National Tank Truck Carriers (NTTC), 

and the Petroleum Marketers Association of America (PMAA) on the potential 

impacts of delivery prohibitions on their industries. These interviews were 

supplemented with additional reviews of their Web sites and e-mail 

correspondence. 

 

13 EPA, FY 2006 End-of-Year Activity Report, November 14, 2006, www.epa.gov/oust/cat/

14 EPA, Economic Analysis Resource Document, Industry Profile chapter, 

http://epa.gov/ttn/ecas/econdatat/Rmanual2/4.0.html

15 U.S. General Accounting Office, Improved Inspections and Enforcement Would Better Ensure the Safety 

of Underground Storage Tanks, May 2001.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

8

 Industry journals and association Web sites, especially information publicly

available from The National Association of Convenience Stores (NACS). 

E

2

Inc. and Abt Associates Inc.

 A review of a March 2006 draft report prepared for OUST, entitled Tribal 

Strategy Technical Analysis Summary.

 A report prepared by Abt Associates Inc. (Abt) for EPA’s Office of Emergency

Management, entitled Regulatory Analysis for the Proposed Revisions to the Oil 

Pollution Prevention Regulation (November 2005). This report provided a model 

for extrapolating national facility estimates from a small sample of state data.

E2 Inc. relied heavily on expert interviews, 2002 census data, and secondary sources to 

characterize the facilities and USTs for terminals, tank truck carriers, jobbers, and motor 

fuel retailers. The estimates for USTs and facilities in six other industry sectors 

(agriculture; commercial; communications and utilities; hospitals; manufacturing; and 

transportation) are based on extrapolating data from a subset of 13 state UST databases to 

the nation. Appendix B outlines E2 Inc.’s methodology. Given existing data availability

and time constraints, the analysis was restricted to the industry sector categories 

identified in these databases. For example, E2 Inc. did not find publicly available data 

that would enable characterization of other industry sectors that likely own or operate 

USTs, such as construction or mining. 

1.3. Organization of This Report

This report has four sections and two appendices:

 Section 1 – Introduction discusses the scope of work and the general approach for 

developing the industry and facility profiles.

 Section 2 – Regulatory Background summarizes the delivery prohibition 

guidelines, defines USTs, and briefly discusses the history of compliance at 

USTs. The section also summarizes potential delivery prohibition mechanisms 

and identifies potentially impacted entities. Lastly, this section discusses previous 

estimates to characterize the universe of USTs and UST facilities. 

 Section 3 – Industry Profiles characterizes the industries potentially affected by

delivery prohibition programs, including: 1) bulk petroleum stations and 

terminals; 2) tank truck carriers; 3) jobbers; 4) motor fuel retailers; and 5) other 

sectors that own and operate regulated USTs. This section also presents the 

estimates of the number of USTs and facilities within these sectors. 

 Section 4 – Facility Profiles summarizes the number of USTs per facility for 

different industry sectors. It also identifies the number of active USTs and 

facilities by state, and active USTs located on Tribal land. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

9

 Appendix A summarizes the number of active USTs and facilities for each state, 

except those located on Tribal land. This summary also includes EPA’s FY 2006 

statistics on the percent of UST facilities in significant operational compliance 

with UST release detection and release prevention regulations.

 Appendix B summarizes the methodology used to extrapolate national numbers of 

USTs and facilities for seven industry sectors (motor fuel retail, agriculture, 

commercial, communications and utilities, hospitals, manufacturing, and 

transportation) from 13 state UST databases.

2. REGULATORY BACKGROUND

2.1. Summary of the Delivery Prohibition Guidelines

Section 1527 of the Underground Storage Tank Compliance Act adds section 9012 –

Delivery Prohibition – to Subtitle I of the Solid Waste Disposal Act. As addressed by

EPA’s delivery prohibition guidelines, “Underground storage tank owners and operators 

and product deliverers are responsible for not delivering, depositing, or accepting 

regulated substances to an underground storage tank identified as ineligible to receive 

product.”16

The guidelines allow states to consider not prohibiting the delivery if it would jeopardize 

the availability of fuel in any rural and remote areas. The rural and remote designation 

would apply for only 180 days following the date of determination that an UST is 

ineligible to receive a regulated substance.

The guidelines are aimed at states receiving Subtitle I funding. EPA is considering 

delivery prohibition regulations that would be applied to all regulated USTs and UST 

facilities.

 

2.2. Definition of an Underground Storage Tank

RCRA Subtitle I defines an UST as any tank that is 10 percent or more beneath the 

surface of the ground. This includes the underground pipes connected to the tank. Under 

the UST regulations at 40 CFR part 280 and 281, EPA regulates only tanks that hold 

petroleum or hazardous substances. Other tanks are covered under other regulations, 

such as tanks holding hazardous materials, which are regulated under Subtitle C. In 

addition, the following USTs do not need to meet federal requirements for USTs: 

 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.

 

16 EPA Guidelines, p. 6.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

10

 Septic tanks and systems for collecting storm water and wastewater. 

 Flow-through process tanks. 

 Tanks of 110 gallons or less capacity. 

 Emergency spill and overfill tanks.

The UST regulations and definitions are summarized on OUST’s Web site and other EPA 

documents.17 

Delivery prohibition mechanisms will concern USTs that are in active use. Our technical 

analysis considers an UST to be active if it is currently in use or temporarily out of use. 

Throughout the technical analysis, “tank” is used to refer only to USTs, not aboveground 

storage tanks.

2.3. Compliance History

EPA reported 8,361 confirmed releases during fiscal year 2006 for roughly 642,000 

active tanks in the states, territories, and on Tribal lands.18 EPA also reported that 62 

percent of recently-inspected facilities were found to be in significant operational 

compliance with UST release detection regulations and release prevention regulations. 

According to EPA, states are allowed to report compliance rates based on state 

requirements that are more strict than the federal requirements. States also have different 

approaches to inspection. EPA has found that “some states focus on suspected noncompliant facilities, while other states conduct random inspections. In FY2006, many

states focused on inspections on previously uninspected facilities in response to the 

inspection requirements in the Energy Policy Act of 2005.”19

A May 2001 report by the U.S. General Accounting Office (GAO) surveyed EPA and 

states on inspection and enforcement of UST regulations. The report estimated that 80 

percent of 616,865 regulated tanks had received federally required equipment upgrades 

by September 2000. The GAO also estimated that roughly 29 percent, or 201,000 tanks, 

were not properly operated or maintained.20 The GAO found that “almost half the states 

and several EPA regions do not physically inspect all tanks for compliance with federal 

requirements. Instead, these states and regions estimate compliance rates based on 

inspections of selected tanks or on tank owners’ self-certification that their tanks are in 

compliance.”21

2.4. Potential Mechanisms to Implement Delivery Prohibition

 

17 EPA, Introduction to Underground Storage Tanks: RCRA Subtitle I (40 CFR Part 280), January 2002.

18 U.S. EPA, “UST Corrective Action Measures for End of Year FY 2006 (Cumulative as of September 30, 

2006),” November 14, 2006.

19 Ibid., “UST Compliance Measures for End-of-Year FY 2006 (as of 9/30/06),” p. 2

20 U.S. General Accounting Office, Improved Inspections and Enforcement Would Better Ensure the Safety 

of Underground Storage Tanks, May 2001, p. 2.

21 Ibid., p. 3.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

11

In Fall 2006, E2Inc. identified potential alternatives for delivery prohibition mechanisms 

that EPA may propose in a federal delivery prohibition regulation. As shown in Exhibit 

2-1, E2 Inc. identified five alternatives, which could directly or indirectly impact UST 

owner/operators, tank truck carriers, jobbers, and possibly terminals. 

Exhibit 2-1. Potential Delivery Prohibition Alternatives

Alternative Description Affected Entities

Red Tag (fill 

pipe)

A red tag on the fill pipe indicates that 

the UST is not eligible for product 

delivery.

 UST owner/operators

 Tank truck carriers

 Jobbers

Green Tag (fill 

pipe)

A green tag indicates that the UST is 

eligible for delivery.

 UST owner/operators

 Tank truck carriers

 Jobbers

Green Permit A permit is displayed at a conspicuous 

place at the UST facility to identify 

whether the UST or facility is eligible to 

receive product.

 UST owner/operators

 Tank truck carriers

 Jobbers

Electronic Roster An electronic roster (posted on the 

Internet or sent by e-mail) notifies 

product deliverers and dispatchers that an 

UST is not eligible for delivery.

 UST owner/operators

 Tank truck carriers 

 Jobbers

 Terminals (indirectly)

Technological Each UST has a barcode that identifies its 

eligibility status. The product deliverer 

scans this information prior to deposit.

 UST owner/operators

 Tank truck carriers 

 Jobbers

2.5. Previously Developed Estimates

In 1988, EPA completed an extensive regulatory analysis of technical standards for 

USTs. In that analysis, EPA identified several characteristics of the affected population 

of tanks, including industry sectors, facility characteristics, tank characteristics, and 

financial conditions for firms owning USTs.22 In addition, during the 1980’s, EPA’s 

Office of Toxic Substances performed a statistical study to assess the number of tanks, 

the number of establishments with tanks, the number of tanks that failed tightness tests, 

and factors contributing to leaks.23 

3. INDUSTRY PROFILES

The delivery prohibition requirements would be directed primarily at USTs containing 

petroleum or petroleum products. USTs containing petroleum products are found in the 

 

22 ICF Incorporated, Regulatory Impact Analysis of Technical Standards for Underground Storage Tanks, 

Volume 1, August 24, 1988, prepared for U.S. EPA, Office of Underground Storage Tanks.

23U.S. EPA, Underground Motor Fuel Storage Tanks: A National Survey, EPA 560/5-86-013, May 1986. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

12

retail motor fuel marketing sector and in several other industry sectors. Industry sectors 

potentially affected by delivery prohibition regulations include:

 Petroleum distributors, which include: 1) petroleum bulk stations and terminals24; 

2) tank truck carriers; and 3) jobbers.

 Motor fuel retailers, which include: 1) convenience stores; 2) service stations; 

and 3) hypermarketers (high volume retailers such as superstores and cost clubs).

 UST owner/operators in other sectors that store petroleum to support economic

activities at their facilities. 

Throughout this report, the terms “firm” and “company” are used interchangeably and 

refer to a specific business owner. In addition, the terms “facility” and “establishment” 

are used interchangeably. As defined by the U.S. Census Bureau, “an establishment is a 

single physical location at which business is conducted and/or services are provided. It is 

not necessarily identical with a company or enterprise, which may consist of one 

establishment or more.” 

3.1. Overview of the Fuel Distribution Industry

Crude oil is refined into gasoline and other petroleum products, and the majority of 

gasoline is shipped first by pipeline to storage terminals, and then loaded into trucks for 

delivery to individual gas stations and end users. Jobbers buy petroleum products from 

oil refiners and resell them to residential, industrial, or commercial consumers like gas 

stations, convenience stores, trucking companies, and farming operations. Large 

consumers are able to buy directly from terminals.

The fuel distribution industry comprises four sectors: 1) bulk stations and terminals; 2) 

tank truck carriers; 3) jobbers; and 4) motor fuel retail sales. Each of these sectors is 

profiled using the following information:

 Industry definition

 Industry activities

 Industry size and concentration

 Geographic distribution

 Market conditions

Exhibit 3-1 shows the number of facilities and USTs for this industry.

 

24 The Census Bureau defines petroleum bulk stations as establishments with bulk storage capacity from 

10,000 to 100,000 gallons for stations receiving supplies by tanker, barge, or pipeline, and those with 

capacity from 100,000 to 2,100,000 for stations getting supplies from other sources. Terminals have bulk 

storage capacity exceeding 100,000 gallons in facilities receiving supplies by tanker, barge, or pipeline, and 

those whose capacity exceeded 2,100,000 gallons for facilities receiving supplies from other sources. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

13

Exhibit 3-1. Number of Facilities and USTs by Industry Sector

Industry Sector NAICS Total Number of 

Facilities

Number of USTs Data Sources

Fuel Distribution 

Petroleum Bulk 

Stations and 

Terminals

4247 3,982 Not applicable  2002 Economic 

Census

 Literature review

Tank Truck 

Carriers (private 

and for-hire)

4842201 

4842301

Approx. 30,000 

trucks

Not applicable  Interview with 

National Tank Truck 

Carriers Association 

(NTTC)

 EPA Sector 

Notebook 

 Literature review

Jobbers 42472 3,216 Unknown  2002 Economic 

Census

 Literature review

 Interview with 

Petroleum Marketers 

Association of 

America (PMAA)

Retail Motor 

Fuel Sales

4471  API 

 Fact sheets 

 Tank to facility ratio 

calculated from 9 

state UST databases

Convenience 

stores (75%)

447110 110,895 347,212  The National 

Association of 

Convenience Stores 

(NACS) fact sheets 

 Facility/tank ratio 

calculated from 9 

state UST databases

Traditional service 

stations (17%)

447190 53,245 166,710  NACS fact sheet on 

market share

 Facility/tank ratio 

calculated from 9 

state UST databases

Hypermarketers 

(8%)

45291 3,860 uncertain  NACS fact sheet on 

market share

 Retail Subtotal 168,000 526,008
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

14

3.2. Petroleum Bulk Stations and Terminals

3.2.1. Industry Definition

This industry consists of companies that supply a wide range of petroleum products from 

bulk storage facilities to jobbers and other wholesalers. Two types of firms operate in the 

industry: refineries that engage in wholesale distribution of their products, and other 

merchants that buy and sell products, either from refineries or importers.25 

The U.S. Census Bureau defines a petroleum bulk station as an establishment with bulk 

storage capacity from 10,000 to 100,000 gallons for stations receiving supplies by tanker, 

barge, or pipeline, and those with capacity from 100,000 to 2,100,000 for stations 

obtaining supplies from other sources. Terminals have bulk storage capacity exceeding 

100,000 gallons in facilities receiving supplies by tanker, barge, or pipeline, and those 

whose capacity exceeded 2,100,000 gallons for facilities receiving supplies from other 

sources. 

Current alternatives to implement delivery prohibition requirements will not directly

impact this industry, although comments from the National Tank Truck Carriers 

suggested that EPA send lists of prohibited tank facilities to gasoline distribution 

terminals.26 

3.2.2. Industry Activities

Companies in this industry have one primary activity: selling petroleum and petroleum 

products to wholesale merchants. These wholesale merchants include jobbers who serve 

retail motor fuel outlets and other petroleum product consumers as well as large 

superstores and cost clubs (hypermarketers) who sell gasoline to their customers. 

3.2.3. Industry Size and Concentration

The 2002 Census reported 3,982 petroleum bulk stations and terminals companies that 

distributed petroleum products to wholesale distributors and jobbers. Annual revenue 

was $92.6 million with 58,197 employees nationwide. The industry is highly

concentrated with the 50 largest companies controlling 77 percent of total industry

revenue. 

3.2.4. Geographic Distribution

Texas, Minnesota, and California have the highest number of establishments. 

 

25 IBIS World , abstract, “Petroleum Bulk Stations and Terminals in the U.S.,” September 29, 2006.

26 Interview with John Conley, National Tank Truck Carriers by E2

Inc. on November 1, 2005 regarding 

proposed delivery prohibition guidelines.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

15

3.3. Tank Truck Carriers 

3.3.1. Industry Definition

Trucks carry fuel from the terminal to the consumer. They are owned or leased by

jobbers, major oil companies, or commercial users. The industry comprises private fleets 

and common (for-hire) carriers. Private fleets own the fuel they carry while common 

carriers receive a freight rate payment to deliver fuel to the fuel owner’s customers. 

3.3.2. Industry Activities

Tank truck carriers typically hold 8,500 to 10,000 gallons in several compartments. 

Different grades of gasoline are blended in the truck’s compartments using special 

additive packages. When the tanker truck reaches a motor fuel station, the truck operator 

unloads each grade of gasoline into the appropriate USTs.27

Many USTs have automatic tank sensors that gauge the fuel level and send an electronic 

message to a dispatcher when a delivery is needed; the dispatcher then sends this order to 

a truck. Some stations continue to use a measuring stick to gauge the level of fuel in the 

USTs, although this is becoming a rare practice. 

According to the API, many major oil companies have only one to two dispatchers in the 

country, with trucks sent on-demand.28 At the other end of the spectrum, some 

companies are so small that the owner serves as the dispatcher. The amount of time 

between a fuel order and delivery depends on the urgency, the location of the truck, and 

the distance of the station from the terminal. For on-demand orders, a truck can arrive 

within hours. The most technologically advanced carriers are able to electronically notify 

a driver of his destination while he is in line at the terminal. Sometimes a driver can be 

told to alter the truck’s destination while en route. 

Most petroleum terminals have a cardlock system, similar to those used at self-service 

gas stations. The wholesale distributor (usually a jobber) maintains an account with the 

terminal. At the time of pickup, the tank truck driver inserts a card into a machine that 

acknowledges the jobber’s identity, dispenses the desired amounts of fuels, and calculates 

the jobber’s bill for the shipment.29 

Common carriers and private trucks carry between three and six loads a day, depending 

on how far stations are from the terminal.30 The main regional difference in the fuel 

distribution industry is between urban and rural areas. In urban areas, the distance 

between the terminal and stations is shorter, so fuel delivery trucks can make many

deliveries per day. Urban jobbers make many deliveries per day while rural jobbers 

 

27 Energy Information Agency, Where Does My Gas Come From?, brochure, 

htttp://www.eia.doe.gov/neic/brochure/gas04/gasoline.htm.

28 Interview with Prentiss Searles, American Petroleum Institute, November 1, 2006.

29 AMC Insurance Web site, www.amcinsurance.com/html/fuel_jobber.html

30 E-mail from John Conley, National Tank Truck Carriers, December 4, 2006.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

16

typically make two deliveries per week. As shown in Exhibit 3-2, common carriers 

average 82 miles per shipment while private fleets average 37 miles.

In general, major oil companies and convenience store chains with private fleets only

deliver fuel to stations that they own. Many of the majors are moving out of retail motor 

fuel sales, and therefore, fuel trucking. Jobbers usually own and operate a fleet of 

delivery trucks although they also hire common carriers, in part because of the liability

associated with hauling gasoline and, in some cases, to focus on their own retail 

operations. 

Exhibit 3-2. Shipment Characteristics for Tank Truck Carrier Industry, 

Commodity Flows for Gasoline and Aviation Turbine Fuel

Segment Value ($M) Tons (thousands) Average Miles per 

Shipment

For-Hire 62,840 (37%) 106,424 (22%) 82

Private 106,424 (63%) 375,843 (78%) 37

Total 169,264 482,267

Source: U.S. Census Bureau, 2002 Economic Census: Transportation, 2002 Commodity Flow 

Survey, p. 21.

3.3.3. Industry Size and Concentration

According to a 1997 sector analysis developed by EPA for the trucking industry, trucking 

companies are diverse, ranging from large employers to private self-employed 

transporters.31 The Census Bureau and industry associations do not provide a precise 

estimate of the ownership and size of the petroleum tank truck industry. As shown in 

Exhibit 3-2, the 2002 Census Bureau’s commodity flow survey indicates that private 

fleets carry 78 percent of the volume of gasoline and turbine aviation fuel. In addition, 

the National Tank Truck Carriers estimates that there are roughly 30,000 fuel trucks 

operating across the country.

32

 The major oil companies own 20 percent of these trucks, 

common carriers make up 55 percent of the fleet, and jobbers own the remaining 25 

percent.33 Common carrier companies carrying petroleum products range in size from 

five trucks to hundreds.34 

3.3.4. Geographic Distribution

Information about the geographic distribution of petroleum tank truck ownership, either 

private fleets or common carriers, was not publicly available. EPA’s 1997 sector analysis 

of the general trucking industry found that trucking facilities were represented across the 

nation, but most heavily concentrated in the midwestern states of Minnesota, Wisconsin, 

 

31 EPA, Sector Notebook for the Ground Transportation Industry, September 1997.

32 Interview conducted with John Conley, National Tank Truck Carriers, November 11, 2005.

33 E-mail from John Conley, National Tank Truck Carriers, December 6, 2006.

34 Interview conducted with John Conley, National Tank Truck Carriers, November 11, 2005.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

17

Illinois, Indiana, Michigan, and Ohio. EPA also found that California, Texas, Ohio, 

Florida, and New York had the largest number of trucking establishments with payrolls.35 

3.3.5. Market Conditions

In terms of profitability, large and efficient transporters were netting close to a half-cent 

per gallon on gasoline deliveries in 1987.36 Over the past few years, the tank truck 

industry has been greatly affected by diesel prices and consumer demand for gasoline and 

other petroleum products. In addition, the industry has faced steep increases in insurance 

premiums. A February 2002 article in the Modern Bulk Transporter stated that “all 

trucking companies are facing extraordinary increases in premium costs, some as much 

as $8,700 per truck, compared to a cost of $880 per truck a few years ago.”37

3.4. Jobbers

3.4.1. Industry Definition

Petroleum jobbers (the Census Bureau refers to them as “petroleum and petroleum 

product merchant wholesalers”) serve as the “middleman” that move petroleum products 

from terminals to gas stations and other end users. 

3.4.2. Industry Activities

In 2002, the average jobber sold roughly 12 million gallons of petroleum products per 

year. Jobbers operate in a vertically integrated industry, with jobbers engaged in four 

types of activities: 

 Bulk storage plant operations: Jobbers often have multi-year contracts with 

suppliers that specify minimum quantities and provide incentives for higher 

volumes purchased. Jobbers store supplies at bulk plants (tank farms) from which 

they distribute product to their customers. Jobbers that are situated more 

conveniently to petroleum terminals will often have less extensive bulk plant 

operations since drivers will typically pick up their fuels right at the “rack” (the 

regional pipeline terminal) and deliver them directly to customers. Inventories at 

bulk plants typically turn over every 10 days. 

 Fuel transportation: Jobbers deliver petroleum products either from their own 

storage facilities using their private trucks or by hiring common carriers. They

may also distribute products directly from their suppliers’ regional terminal. In 

order to streamline deliveries and minimize their inventories, large jobbers use 

computer and information technology that facilitates communications with 

 

35 EPA, Sector Notebook for the Ground Transportation Industry, September 1997, p. 23.

36 Donald M. Smith, “The Economics of Truck Ownership: Can Jobbers Still Make Money Hauling 

Petroleum?,” National Petroleum News, November 1, 1987.

37 Mary Davis, “Tank Truck Carriers Struggling with Insurance Industry Crisis,” Modern Bulk 

Transporter, February 1, 2002. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

18

customers and onboard computers for delivery trucks. These communications 

technologies allow them to deliver more gasoline directly from the terminal. As a 

result, they avoid the risk and expense of holding their own inventory. About 50 

percent of all gasoline is distributed straight from the rack. 

 Motor fuel retailing: Some distributors sell gasoline at their own retail stores. 

Others retail petroleum by supplying and owning the pumps, USTs, and other 

equipment used by independent convenience stores. They then share in the 

gasoline profits under special purpose leases.

 Refining: A small number of jobbers own and operate small refineries. 

 

Exhibit 3-3. Key Statistics for the Petroleum Wholesale Distribution Industry 

(excluding Liquefied Petroleum Gas)

Statistic 2002 Census Data

Number of Establishments 3,216

Number of Companies 2,624

Industry Revenue ($ billions) 111.3

Refined Petroleum Products Sold

(million gallons per year)

11.5

Employment 34,752

Source: 2002 Economic Census

3.4.3. Industry Size and Concentration

In 2002, approximately 2,624 companies operated as jobbers with annual revenue of 

around $111 billion. The industry is highly concentrated with the 20 largest firms 

holding 68.5 percent of the market. As shown in Exhibit 3-4, jobbers have a wide range 

of annual revenue. Revenue can vary significantly from year to year because of the 

variability of crude oil prices. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

19

Exhibit 3-4. Distribution of the Number of Facilities Owned by Firms of Various 

Sales Size Engaged in Wholesale Petroleum Distribution (Excluding Liquefied 

Petroleum Gas)

Annual Sales of Firm Number of Firms Number of Facilities

Less than $250,000 326 330

$250,000 to $499,999 213 213

$500,000 to $999,999 251 255

$1,000,000 to $2,499,999 355 369

$2,500,000 to $4,999,999 260 275

$5,000,000 to $9,999,999 233 251

$10,000,000 to $24,999,999 289 323

$25,000,000 to $49,999,999 149 197

$50,000,000 to $99,999,999 92 171

Over $100,000,000 74 449

Firms not operated for the 

year

382 383

Total 2,624 3,026

Source: 2002 Economic Census

Exhibit 3-5. Distribution of Size of Firms Engaged in Wholesale Petroleum 

Distribution

Number of Facilities per 

Firm

Number of Firms Number of Facilities

Firm only (no bulk tank 

facilities)

1,988 1,988

1 509 509

2 69 138

3-4 29 93

5-9 12 80

10-24 11 190

More than 25 6 218

Total 2,624 3,216

Source: 2002 Economic Census

3.4.4. Geographic Distribution

Texas has the greatest number of jobbers with 397 establishments that earned 35 percent 

of the nation’s annual revenues in 2002. Texas was followed by Georgia, California, 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

20

Missouri, New York, and Colorado, whose petroleum product wholesale operations 

captured another 25 percent of the market.

3.4.5. Market Conditions 

According to Census Bureau statistics, the number of companies in the petroleum 

wholesale industry has steadily declined since the early 1980s. In 1982, there were 6,287 

firms in the business. By 2002, the number of firms had thinned to 2,684. The major oil 

companies that supply jobbers are consolidating. Contracts with suppliers, which last 

three to ten years, typically require jobbers to purchase minimum levels of product. As a 

result, they are merging to secure their supplies. As stated by one analyst, “the 

wholesalers that manage to survive were expected to be those with the greatest 

technological sophistication, those with strong relationships with the major oil companies 

and retailers, and especially those that can bolster their distribution operations with valueadded services.” 38

However, as shown in Exhibit 3-5, the majority of jobbers are small, single unit 

operations. Jobbers make their profits on the spread between the purchase price and 

selling price, and on the volume of product sold. Small jobbers often lack the economies 

of scale to afford sophisticated electronic communications and logistics technology to 

make their distribution activities more efficient. Large wholesale purchasers can 

negotiate bigger price discounts from suppliers. The fixed cost of their bulk holding 

facilities can also be spread over a larger volume of product. 

Large consumers of petroleum products often bypass jobbers. The convenience store 

industry is consolidating to create larger companies that can buy directly from refiners. 

In addition, new hypermarketers, like Wal-Mart and Costco, do not need jobbers to serve 

as brokers with refineries and terminals. In addition, by offering lower gasoline prices, 

these superstores are able to attract customers away from retail stores owned by jobbers. 

On the horizon, Internet companies are teaming with jobbers to create business-tobusiness retailing of petroleum products online, which could potentially change the way

petroleum is marketed and sold.39 

3.5. Motor Fuel Retail Sales

3.5.1. Industry Definition

The motor fuel industry comprises convenience stores that sell gasoline as well as 

gasoline service stations that sell gasoline and lubricating oils. 

3.5.2. Industry Activities

 

38 Reference for Business Web site, www.referenceforbusiness.com/industries/Wholesale-Trade

39Bob Vavra, “The Urge to Merge,” National Petroleum News, June 1, 2000.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

21

Motor fuel stations are owned and operated by four kinds of companies: major oil 

companies, jobbers, independent convenience store chains, and hypermarketers. 

Various business arrangements exist between station owners and operators. A company 

can own the site and the USTs, lease the site and own the USTs, or lease both the site and 

the USTs. An oil company can own and operate a service station, own the station and 

lease it to a dealer to operate it, or a dealer can own and operate the station with an 

agreement to sell a certain brand of fuel under that brand’s name. This latter arrangement 

gives the oil company or jobber a guaranteed supply outlet for their petroleum products. 

Sixty-two percent of fuel stations operate under the brand of a major oil company. A 

typical lessee dealer operates one to two stores.40 

A company’s suppliers and size dictate its options for obtaining gasoline. Branded 

independent retailers must go to a specific refiner. Larger unbranded independent 

retailers typically have contracts with a specific refiner, and sometimes multiple refiners. 

Particularly high-volume retailers can purchase gasoline on demand at the terminal. The 

cost of each delivery varies, especially when wholesale prices are fluctuating. As a 

result, large unbranded retailers often purchase gasoline futures to lock in prices for 

future delivery on a specific date. This hedging practice allows retailers to manage their 

costs as they ride out volatile prices. However, as noted by the Energy Information 

Agency, whether a company is branded, unbranded, has long-term contracts, or buys onthe spot market, “during tight supply periods and rising wholesale prices, even the time of 

day that wholesale product was purchased can play a role in determining the retail 

price.”41

The average UST has a capacity of 8,000 to 10,000 gallons so the typical retailer receives 

a gasoline shipment every day or so. Large retailers can sell three to four times their tank 

capacity and receive multiple shipments per day. Convenience stores sell, on average, 

about 3,500 gallons of gasoline per store per day.

42

 

Exhibit 3-6. Key Statistics for the Petroleum Wholesale Distribution Industry 

(excluding Liquefied Petroleum Gas)

Statistic 2002 Census Data

Number of Establishments 121,446

Number of Companies 66,681

Industry Revenue ($ billions) 249.1

Gasoline Sold (billions of gallons) 143.5

Employment 926,792

Source: 2002 Economic Census except gasoline volumes, which are from the 

Association for Convenience & Petroleum Retailing.

 

40 http://www.abbunitedstates.com/glossary_gas_convenience.asp

41 Energy Information Agency, www.eia.doe.gov

42 NACS, 2006 Gas Price Kit, “How Do Retailers Get – and Sell – Gasoline?, www.nacsonline.com
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

22

3.5.3. Industry Size and Concentration

The motor fuel retail industry is a diverse market comprising several thousand 

convenience stores and traditional gasoline service stations. The number of 

establishments varies depending on the source. The 2002 Census Bureau identified 

121,446 establishments. The API estimates that there are 169,000 retail gasoline 

outlets.43 NACS conducts an annual survey of gasoline retail outlets, and identified 

168,000 retail gasoline facilities.44 Based on an extrapolation of UST data from nine 

states to the nation, E2Inc. estimated 141,776 motor fuel retail facilities. For this report, 

E2 Inc. relied primarily on the NACS’s information because of their comprehensive 

statistics and analyses. 

According to industry surveys conducted by the NACS, in 2004, 110,895 convenience 

stores sold 75 percent of the gasoline in the U.S. Major oil companies owned only 2.6 

percent of convenience stores selling gasoline.45 Also in 2004, 55 percent of the 

convenience stores selling gasoline were one-store operations, compared to only 13 

percent operated by a company with 500 or more stores. The typical business has an 

independent owner/operator. In addition, as of July 2005, 3,860 hypermarketers sold 8 

percent of gasoline. Traditional service stations sell the remaining 17 percent. The major 

oil companies own less than five percent of all retail gasoline stations.

According to the 2002 Census Bureau, the industry is not especially concentrated with 

the 50 largest firms holding 33.2 percent of the market. 

 

43 American Petroleum Institute, “Growth: The Market Determines the Price.” Fact sheet. 

44 NACS, 2006 Gas Price Kit, “How Do Retailers Get – and Sell – Gasoline?, www.nacsonline.com

45NACS, NACS 2006 Gas Price Kit, www.nacsonline.com
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

23

Exhibit 3-7. Distribution of the Number of Facilities Owned by Firms of Various 

Sales Size Engaged in Motor Fuel Retail Sales

Annual Sales of Firm Number of Firms Number of Facilities

Less than $250,000 5,094 5,117

$250,000 to $499,999 6,762 6,796

$500,000 to $999,999 11,273 11,394

$1,000,000 to $2,499,999 19,123 19,892

$2,500,000 to $4,999,999 8,838 10,394

$5,000,000 to $9,999,999 2,899 5,907

$10,000,000 to $24,999,999 1,317 6,771

$25,000,000 to $49,999,999 432 5,882

$50,000,000 to $99,999,999 190 5,448

$100,000,000 to $249,999,999 86 5,237

Over $250,000,000 72 27,851

Firms not operated for the 

entire year

10,595 10,757

Total 66,681 121,446

Source: 2002 Economic Census

Exhibit 3-8. Distribution of Size of Firms Engaged in Retail Motor Fuel Sales

Number of Facilities per 

Firm

Number of Firms Number of Facilities

Single unit firm (0) 60,673 60,673

1 1,705 1,705

2 1,571 3,142

3-4 1,088 3,663

5-9 781 5,052

10-24 543 8,012

25-49 184 6,272

50-99 63 4,376

More than 100 73 28,551

Total 66,681 121,446

Source: 2002 Economic Census
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

24

3.5.4. Geographic Distribution

According to the 2002 Census, the number of gasoline outlets is distributed throughout 

the country. Texas, California, and Florida have the highest numbers of establishments 

and employees, and account for approximately 24 percent of the U.S. sales revenue. An 

analysis conducted by the California Energy Commission on the impacts on rural 

counties of upgrading the state’s UST program found that the number of fuel stations 

could adequately serve some communities, while other communities were poorly

served.46 

The major oil companies have closed gasoline stations at a rate that is more than twice as 

fast as the national average. The presence of the major companies declined from 

presence in 32 states in 1984 to 23 states by 1997. The number of major companies is 

expected to fall as consolidation in the industry continues. Rather than focus their 

geographic scope, fast-growing independent refiners have expanded their operations. 

Refiners owning gasoline outlets increased their scope from 14 states in 1990 to 24 states 

in 1997.

47

 Citgo, a wholly-owned subsidiary of the Venezuelan state oil company

PdVSA, expanded its operations from 31 states in 1984 to 48 states in 1997. Similarly, 

Tosco, a company based in Connecticut, went from having no retail outlets in 1990 to 

presence in 37 states in 1997.48

In addition, hypermarketers were particularly successful in a number of mostly southern 

states, including Texas, where they held more than 14 percent of the market by 2002, 

followed by Washington (13.9 percent), Arkansas (11.4 percent), Tennessee (11 percent), 

and Kentucky (10.2 percent).49

3.5.5. Market Conditions

As stated by API, “Competition in the retail sector is intense. The overwhelming trend 

has been the increasing efficiency with which gasoline is delivered to the consumer.” 

During the early 2000s several factors negatively affected the industry, including weak 

economic conditions, decline in consumer spending, and unstable gasoline prices. 

According to NACS data, retailer gross margins have steadily eroded over the past 

several years. In 2004, margins hit 6.9 percent, their lowest level since 1984 when they

were 6 percent. Also in 2004, a retailer’s average gross margin (before expenses) was 

12.7 cents per gallon. NACS states that typical net profits per gallon are a “few cents at 

most.” As a result, although motor fuel sales accounted for 66.5 percent of convenience 

store sales, it contributed only 36.6 percent of total store gross margins.

 

46 California Energy Commission, Impacts of the Underground Storage Tank Upgrading Program on 

Petroleum Product Supplies in Rural California, December 1998.

47Energy Information Agency, http://www.eia.doe.gov/emeu/finance/usi&to/downstream/dtab05.html

48Energy Information Agency, http://www.eia.doe.gov/emeu/finance/usi&to/downstream/dtab05.html

49 Reference for Business, http://www.referenceforbusiness.com/industries/Retail-Trade/Gasoline-ServiceStations.htm.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

25

The market has also experienced more competition as hypermarketers and independent 

oil companies entered the retail gasoline sector.

3.6. General Industry Requiring Petroleum Storage

Non-retail motor fuel tanks are owned by firms engaged in agriculture, mining, 

construction, manufacturing, transportation, communications and utilities, trade, and 

services, and by government entities. Exhibit 3-9 shows the number of facilities and 

tanks for six industry sectors. 

Exhibit 3-9. Number of Facilities and Tanks for Non-Retail Industries

Industry Sector NAICS Total Number of 

Facilities

Number of USTs

Agriculture

(crop production and 

animal production)

111, 112 889 1,610

Commercial

(wholesale trade, retail 

trade, accommodation, and 

food services)

42, 44-45, 72 

(excluding 447)

22,730 52,271

Communications and 

Utilities

(wired telecommunications 

carriers; and electric power 

generation, transmission, 

and distribution)

5171, 2211 6,972 10,223

Institutional 

(hospitals only)

622 2,330 3,812

Manufacturing 31-33 9,261 15,259

Transportation

(air, water, truck, transit, 

pipeline, and airport 

operations)

481, 483-486, 

48811

8,559 15,140

This list of industry sectors is not comprehensive. The industry sector categories were 

limited by publicly available information, particularly by the industry sector breakdowns 

provided by state UST databases. Many other sectors, such as construction, mining, and 

government, use USTs to support their activities. 

For the government sector, the UST Compliance Act required information on the number, 

location, and compliance status of federal USTs by August 8, 2006,

50 and state and local 

 

50Section 1528(b), “Federal Facilities,” of Title XV, Subtitle B, of the Energy Policy Act of 2005 (i.e., the 

UST Compliance Act) required that “each Federal agency that owns or operates one or more underground 

storage tanks, or that manages land on which one or more underground storage tanks are located, shall 

submit to the Administrator, the Committee on the Energy and Commerce of the United States House of 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

26

USTs by August 8, 2007.51 The U.S. Department of Defense (DoD) has identified 4,355 

USTs on DoD land, of which 4,314 are owned and operated by DoD. It estimates that 30 

percent of these tanks have not been inspected.52 The U.S. Department of Energy

estimates that it owns or operates 170 USTs containing petroleum or petroleum 

products.53 Other federal agency reports were either not publicly available or could not 

be readily found through Internet searches. 

3.6.1. Methodology Used to Estimate Universe of Facilities and USTs

E

2

Inc. estimated the universe of potentially affected facilities for the six industry sectors 

by adapting a methodology used by EPA in its regulatory analysis for the proposed 

revisions to the Spill Prevention, Control, and Countermeasure (SPCC) regulation.54 This 

methodology involves extrapolating a small sample of state data to a national estimate of 

facilities.

First, E2Inc. surveyed available UST data from the Web sites of 50 states. E2Inc. 

identified 13 state UST databases that provided industry sector information that could be 

downloaded from the public Web sites. These states were Alabama, Alaska, Delaware, 

Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, Nevada, Tennessee, 

Virginia, and Wisconsin.55

Because of existing data availability and time constraints, the six industry sector 

categories were determined by the availability of state data.56 Not all states provided the 

same sector information. NAICS codes were assigned to each industry sector based on 

the types of companies listed in the UST databases. 

Once NAICS codes were assigned to each of the six general industry sectors, E2Inc. used 

2002 Census data to estimate the total number of establishments (facilities) in that sector 

for the appropriate states. The 2002 Census also provided the total number of 

establishments for that industry sector in the nation. For each industry sector, E2Inc. 

divided the total number of UST facilities (from the state datasets) by the total number of 

facilities for those same states (from the 2002 Census). This calculation provides the 

percentage of facilities in those states that have USTs. E2Inc. assumed that this 

percentage held true for the nation. For each industry sector, the national number of UST 

 

Representative, and the Committee on the Environment and Public Works of the Senate a compliance 

strategy report.”

51The UST Compliance Act requires states to submit a report to EPA on compliance of federal, state, and 

local government-owned tanks.

52U.S. Department of Defense, Underground Storage Tank Compliance Strategy Report, Report to 

Congress and EPA, August 2006, p. 5.

53 U.S. Department of Energy, U.S. Department of Energy Underground Storage Tank (UST) Compliance 

Strategy Report, July 31, 2006.

54EPA, Regulatory Analysis for the Proposed Revisions to the Oil Pollution Prevention Regulation (40 CFR 

Part 112), November 2005.

55Abt Associates, Inc. also provided 11 datasets obtained in 2005 from state agencies for the SPCC 

regulatory analysis. Five of these databases were used in the analysis.

56The SPCC methodology identified industry sectors by matching owner information in the state databases 

with the Dun & Bradstreet Market Spectrum database. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

27

facilities was calculated by multiplying this percentage by the national number of 

facilities in that sector (from the 2002 Census).

E

2

Inc. estimated the number of active tanks in each industry sector by multiplying the 

estimated number of UST facilities by the tank/facility ratio calculated for each sector 

from the state databases.

3.7. Non-Petroleum USTs and Facilities

Exhibit 3-10 shows the percentages of tanks containing petroleum and non-petroleum 

substances based on information available from 13 state UST databases. For these states, 

E

2

Inc. found that 96 percent of tanks and 93 percent of facilities store petroleum 

products. In addition, 1.8 percent of tanks and 4.4 percent facilities store used oil. The 

remainder is chemicals, hazardous substances, or unknown.

Exhibit 3-10. Petroleum and Non-Petroleum USTs and Facilities

(based on 13 states)

Substance % of Tanks % of Facilities

Petroleum 96.54 93.20

Used Oil 1.83 4.36

Chemicals 0.04 0.05

Hazardous 

Substances

0.27 0.26

Unknown 0.26 0.36

Other 1.07 1.77

These statistics are comparable to estimates developed for the 1988 regulatory analysis 

where EPA estimated that about 97 percent of tanks stored petroleum products (heating 

oil, aviation fuel, used oil, etc.). The remaining three percent stored chemicals, including 

hazardous substances.57 

 

57 ICF Incorporated, Regulatory Impact Analysis of Technical Standards for Underground Storage Tanks, 

Volume 1, August 24, 1988, p. 1-6.
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

28

4. FACILITY PROFILE 

4.1. Size of Facilities

Exhibit 4-1 provides the number of tanks per facility for seven industry sectors. 

Exhibit 4-1. Number of Tanks per Facility for Selected Industry Sectors

Industry Sector Number of Tanks per 

Facility

Retail Motor Fuel Sales 3.13

Petroleum Storage

Agriculture 1.81

Commercial (wholesale and retail trade) 2.30

Communications and Utilities 1.47

Institutional (hospitals only) 1.64

Manufacturing/Industrial 1.65

Transportation 1.76

Used Oil Storage 1.11

Chemical Storage 2.35

4.2. Number of Active Tanks and Estimated Facilities by State

Appendix A lists the number of active tanks and facilities in each of the 50 states (and six 

territories), except those located on Tribal lands. The appendix also provides the 

percentage of UST facilities in significant operational compliance with UST release 

detection and release prevention regulations. Collectively, these states have 635,450 

tanks at 239,859 facilities. Sixty-five (65) percent of recently-inspected USTs in these 

states were found to be in significant operational compliance with federal UST 

requirements.

The number of active tanks for most of the states is based on EPA’s report on UST 

corrective action measures for end-of-year FY 2006. This report provides all of the data 

on regulatory compliance rates. E2Inc. obtained the number of active tanks and facilities 

for 13 states from an analysis of their online UST databases. From these 13 databases, E2

Inc. calculated a tank to facility ratio of 2.65. The number of active facilities for the other 

states was calculated by dividing the number of active tanks in each state by this ratio. 

4.3. Number of Active Tanks on Tribal Land

In early 2006, E2 Inc. performed a technical analysis to inform EPA’s tribal strategy 

workgroup about the status of USTs located on Tribal lands. The analysis focused on 

active tanks regulated under RCRA Subtitle I that were either currently in use or 

temporarily out of use. 
***DRAFT, DELIBERATIVE MATERIALS – DO NOT RELEASE OUTSIDE OF EPA***

Delivery Prohibition DRAFT – Do not cite or quote

DRAFT Preliminary Analyses December 18, 2006

29

E2 Inc. based its analysis on data received from the EPA regional offices. All regions 

provided data except for Region 3, which had no USTs on Tribal land. The data included 

owner, owner type (e.g., local government, state government, federal government, 

private, or commercial), tribe, tank location, number of regulated active tanks, date of last 

inspection, and other information of interest to the working group. The regions were not 

asked to provide information on the number of facilities or tanks owned or operated by 

specific industry sectors. 

The analysis identified 2,951 active regulated USTs on tribal land; 857 of these tanks had 

not been inspected since December 1998. Of these 857 USTs, 641 had never been 

inspected. Approximately one third (988 USTs) are owned by a government entity. 

Tribal governments own 670 USTs, local non-tribal government agencies own 136 USTs, 

state government agencies own 65 USTs, and federal government agencies own 117 

USTs on tribal land.

Exhibit 4-2. Status of Tanks on Tribal Land

Tank Status by Region

0

200

400

600

800

1000

1 2 3 4 5 6 7 8 9 10

Region

Number of Tanks

Regulated active tanks

on tribal land not

inspected since Dec.

1998

Regulated active tanks

on tribal land never

inspected

Regulated active tanks

on tribal land