Environmental Protection: Improved Inspections and Enforcement Would Better Ensure the Safety of Underground Storage Tanks
Released: 2001-05-09T00:00:00

Letter

Background

An underground storage tank is defined as a tank and any underground piping connected to the tank that has at least 10 percent of its combined volume underground. When the UST program was established, Congress and EPA excluded about 2 million tanks meeting this definition from coverage based upon their size, content, location, or regulation under other programs or laws. For example, certain tanks used to store heating fuel or small tanks used on farms and residences were excluded. Under EPA’s UST program, a tank owner must notify a designated state or local agency of any tank storing petroleum or hazardous substances. EPA and the states track and regulate these underground tanks, updating its databank as new tanks become active. Most regulated tanks store fuel for vehicles and are located at gas stations.

Although tank owners and operators are ultimately responsible for cleaning up contamination from leaks, the Congress created a trust fund in 1986 to help EPA and the states cover cleanup costs which tank owners and operators could not afford or were reluctant to pay. In instances where owners and operators would not pay, EPA or the relevant state could proceed with the cleanup and later seek reimbursement from the owners and operators. EPA derives about $70 million annually from the trust fund, most of which it distributes to states to implement its cleanup program. The trust fund is replenished primarily by revenue generated from a $0.001 per gallon tax on gasoline, diesel, and aviation fuel. At the end of fiscal year 2000, the balance in the fund was about $1.5 billion. States receiving support from the trust fund must spend it on cleanup and related activities, and cannot use the money for inspections or enforcement of leak detection and prevention requirements. States can keep any reimbursements from owners and operators for states’ cleanup costs and use these extra funds on future cleanups. EPA also awards states annual grants of about $187,000 each to help states cover some of the program’s inspection and enforcement costs, and spends about $6 million annually on its own headquarters and regional program implementation, management, and oversight activities.

In addition to setting equipment requirements for active tanks, EPA has established operational and maintenance requirements to help ensure that these tanks remain safe. These requirements specify actions that tank owners and operators are to take to prevent the spills, overfilling, and corrosion that typically cause leaks, such as periodic system testing. EPA has taken further steps to improve the UST program. For example, in recent years, MTBE —a gasoline additive designed to reduce emissions and raise octane—has been detected with increasing frequency in groundwater used for drinking water supplies. MTBE is a potential carcinogen and the effects of exposure include headaches, eye, nose and throat irritation, cough, nausea, dizziness, and disorientation. In recent years, water suppliers have incurred increasing costs to clean up MTBE contamination. In November 1998, EPA convened a panel of experts to help investigate reported releases of this fuel additive into some groundwater, including releases from tanks. In 1999, the agency also convened a focus group of nine industry representatives who provided comments on the current status of the tank program and leak prevention methods. Using information from these two groups and a variety of other sources, in October 2000, EPA announced a set of four program initiatives intended to: Achieve faster cleanups Evaluate the performance of tank systems Promote tank cleanups at abandoned and idled properties that are contaminated.

At the time of our review, EPA had just begun to assemble working groups to define the initiatives’ time frames and implementation details.

The Congress has introduced several legislative proposals to help states increase their capacity to inspect tanks and to enforce federal requirements intended to prevent problems with leaking tanks. For example, S. 2962, which was introduced in July 2000, would have allowed states, among other things, to spend a portion of the funds they receive from the tank cleanup trust fund on inspections and enforcement of leak detection and prevention requirements.

Most Tanks Have Been Upgraded With Leak- and Spill-Prevention Equipment, but Many Are Not Being Operated and Maintained Properly

Although most tanks have been upgraded with the federally required equipment to help prevent leaks, spills, and corrosion, the states and EPA regions report operations and maintenance problems that could lead to spills, leaks, and health risks. Consequently, some upgraded tanks still pose potential health risks. State and EPA officials believe that the tanks without the equipment are generally empty and inactive, but further investigation is needed to determine whether these tanks should be removed to guard against contamination or undergo cleanup. States also noted that owners, operators, installers, and inspectors need more training to help solve the operations and maintenance problems. As a result, EPA has included improved training and tank compliance in its program initiatives.

State Compliance With Federal Equipment Requirements Is High but Still Varies Considerably

Based on state responses to our survey, we estimate that about 89 percent of the 693,107 regulated tanks, or 616,865 tanks, had been upgraded with the federally required equipment by of the end of fiscal year 2000. Compliance rates among the states varied, as the following figure illustrates.

In comparison, EPA data indicated that about 70 percent of the tanks that its regions regulate on tribal lands had also been upgraded, but this varied among the regions as well. For example, four regions reported upgrades in more than 90 percent of their tanks, while a fifth region reported that only 36 percent out of its 736 tanks complied with federal requirements.

The accuracy of the states’ tank compliance estimates varies, however, because some are based on more reliable data than others are. For example, 29 states base their estimates on periodic physical inspections of all of their tanks. Other states base their overall compliance rate estimate on inspections of only a subset of their tanks or on information provided by owners and operators that certifies that their tanks had been upgraded. The accuracy of EPA compliance data for tanks on tribal lands also varies. For example, one region reported it lacked data to know the actual location of some of the 300 tanks it was supposed to regulate on tribal lands and therefore could not verify whether these tanks had been upgraded.

We estimate that the remaining 11 percent, or about 76,000, of the regulated tanks may not be upgraded. Seventeen states and the three EPA regions we visited reported that they believe that most of these tanks were either empty or inactive, while five states reported that at least half of their non-upgraded tanks were still in use. EPA program managers surmised that many states most likely assume that the empty or inactive tanks pose less risk and therefore allocate fewer resources to their care. However, states also reported that they generally do not discover tank leaks or contamination around tanks until the empty tanks are removed from the ground during replacement or closure. Therefore, unless EPA and the states address the issue of empty or inactive tanks in a timely manner, this potential source of contamination may be overlooked.

Tank Operations and Maintenance Problems Increase the Risk of Contamination

We estimate that 29 percent of regulated tanks, or 201,001 tanks, are not being operated and maintained properly. Operations and maintenance problems varied across the states, as the following map illustrates.

States reported a variety of operations and maintenance problems that surfaced during routine inspections of underground storage tanks: 19 states reported frequent problems with the equipment intended to 15 states reported that leak detection equipment was frequently turned off or improperly maintained, and 7 states reported frequent problems with the equipment to prevent spills and overfilling.

States also reported that the majority of operational compliance problems occurred at tanks owned by small, independent businesses; non-retail and commercial companies, such as cab companies; and local governments. EPA and the states attribute operations and maintenance problems to insufficient training for all staff implementing tank requirements, including owners, operators, installers, removers, and inspectors. Owners and operators are responsible for making sure that they and their staffs acquire adequate training. However, the owners and operators from these smaller businesses and local government operations may find it more difficult to afford adequate training for themselves and their staff, especially given the high employee turnover, or give training a lower priority. States and EPA must also ensure that their own inspectors receive proper training. However, 47 states reported the need for additional training for their staff, and 41 requested additional technical assistance from the federal government to provide such training.

EPA’s expert and industry panels also called on the agency to take additional measures to address the problems surrounding tank operations, maintenance, and staff training. The expert panel concluded that releases were more likely to occur in smaller, independently owned tanks because owners and employees may have less training in performing operational and maintenance activities. The panel recommended the creation of expanded programs to train and to license tank staff. The industry group also identified the need to better address operations and maintenance problems and to provide better training. The group discussed various training methods that EPA could pursue, such as developing instructional videos for operators and inspectors, and suggested the establishment of a national program to certify tank staff and inspectors.

To date, EPA has provided states with a number of training sessions and helpful tools designed to address these issues, including operations and maintenance checklists and manuals, and other publications and guidance. EPA has also publicized its training initiatives and operations and maintenance guides, which companies and the states have found to be successful. For example, the American Petroleum Institute now offers recommended practices on underground storage tank management and is in the process of developing operations and maintenance training for members. The state of California now requires training courses for all tank owners, operators, installers, and inspectors. EPA has entered a cooperative agreement with a university in another state to provide similar training.

One of EPA’s tank program initiatives is intended to improve training and tank compliance with federal equipment, operational, and maintenance requirements. With this initiative, EPA wants to encourage EPA regions and the states to improve the quality of their tank compliance data so that the agency can compile an accurate and consistent compliance measure, get states to commit to annual targets so that substantially more tanks will be in compliance with federal requirements by the end of 2005, and provide owners, operators, and inspectors with the technical assistance, improved guidance, and training needed to achieve compliance.

EPA program managers said the agency is currently working out the details of how it will implement and achieve this initiative. At the time of our review, the agency had set up a working group of state and EPA representatives whose initial tasks, among other things, will be the establishment of compliance targets.

Most States Do Not Inspect All Tanks Frequently Enough or Have All the Enforcement Tools Needed to Correct Problems

Twenty-two states and one of the three EPA regions we visited do not know the extent to which their tanks comply with federal requirements, because limited staff and resources inhibit the physical inspection of all affected tanks. Most states and industry stakeholders support establishing a federal requirement for periodic inspections, but the states would need more inspectors to ensure compliance. Likewise, only 24 states have the authority to prohibit fuel delivery to a non-compliant tank—the most effective enforcement tool. The law governing the tank program does not give EPA clear authority to regulate fuel delivery. Most states reported that they need either additional enforcement authority or resources. EPA plans to address inspection and enforcement issues under its initiatives, and the Congress could consider actions to allocate additional funds to help states with their tank inspection and enforcement activities.

Most States’ Tank Inspections Are Too Infrequent to Ensure Compliance

According to EPA’s program managers, only physical inspections can confirm whether tanks have been upgraded and are being properly operated and maintained. The managers stated that tanks should ideally be inspected on an annual basis to ensure that problems are being identified and resolved quickly. However, if a state or region lacks the resources to inspect tanks annually, all tanks should be inspected at a minimum of at least once every 3 years. Twenty-nine states reported that they inspected all of their tanks on a regular basis, but only 19 states—and two of the three EPA regions we visited—inspected all tanks at least once every 3 years.

Twenty-two states do not inspect all of their tanks on a regular basis, and therefore, some tanks may never be inspected. These states typically target tanks for inspection based on factors such as a tank’s proximity to groundwater or the number of complaints lodged against it. Overall, we estimated that states and EPA inspected about 185,000 tanks in fiscal year 2000. However, 17 states inspected only 10 percent of their tanks or less that year.

The possibility of a tank inspection provides tank owners and operators incentive to comply with federal requirements. If tank owners and operators did not think that their tanks would be subject to inspection, some might be less concerned about ensuring compliance, although others might comply for fear of being held liable for any damage from spills and contamination. Nevertheless, broader and more frequent inspection coverage would provide EPA and the states with more complete compliance data, which could then be used to better target their enforcement actions and improve tank compliance. However, states and EPA would need to hire additional staff to conduct more frequent inspections—every tank at least once every 3 years. For example, based on current staffing levels, inspectors in 11 states would have to visit more than 300 facilities a year to inspect all of their tanks within this time frame. However, this number exceeds EPA’s estimate of 200 facility visits that a qualified inspector can make in one year.

Most states use their own employees to conduct inspections. Therefore, an increase in the number of inspectors may be dependent on whether their state legislatures consent to granting them additional hiring authority and funding. A few states supplement their programs by delegating inspection responsibilities to local government employees, such as local fire department personnel. Three states allow tank owners and operators to hire licensed or state-certified private inspectors who report the results of their inspections back to the state. EPA has issued a guidebook to states on the use of such third party inspectors. However, program managers caution that this approach raises the potential for a conflict of interest on the part of the inspectors. For example, the managers said that inspectors may not readily identify tank violations for fear that tank owners or operators may not rehire them for future inspections.

Officials in 40 states said that they would support a federal mandate requiring states to periodically inspect all underground storage tanks. Some states expect that such a mandate would provide them the leverage they need to obtain additional staff and funding from their state legislatures. EPA’s industry panel likewise supported a requirement for periodic—annual if possible—inspections and a set of inspection standards to promote consistency across the states.

Most States and EPA Lack the Most Effective Enforcement Authority

EPA’s program managers stated that the most effective enforcement programs employ a variety of authorities or tools, including the ability to (1) levy a fine against a violator; (2) issue field citations to owners or operators at the time of the inspection for less serious violations; and (3) prohibit fuel deliveries to non-compliant tanks. Some states have also filed civil and criminal actions for more egregious violations, although these tend to be more time-consuming and costly.

Only 8 of the 49 states that are responsible for enforcement activities reported having all three tools—levying fines, issuing citations, and prohibiting deliveries—at their disposal. As the following figure illustrates, 30 states reported that they did not have the authority to issue field citations and 27 reported that they did not have the authority to prohibit fuel deliveries. These variances indicate that a tank owner or operator in one state could be fined for a violation, while an owner or operator in another state could be forced to cease operations for a similar violation. In total, 27 states said they needed additional enforcement authorities, while 46 said they could use additional enforcement resources.

EPA regions can levy fines or issue citations but cannot prohibit fuel delivery to non-compliant tanks. According to the program managers, EPA believes, and we agree, that the law governing the tank program does not give it clear authority to regulate fuel distributors. They also noted that the regional enforcement of tanks located on tribal land was more difficult because of the agency’s focus on respecting tribal sovereignty. For example, program managers in two regions stated that they could not impose any sanctions against tribal owners; they could only issue notices of compliance problems. Managers at EPA headquarters confirmed that regional program managers needed to obtain headquarters approval before any enforcement action could be taken against a tribal owner.

The expert panel and industry group raised similar concerns about the effectiveness of program enforcement. The expert panel recommended that the states be granted the authority to prohibit fuel deliveries to non- compliant tanks and obtain additional resources. The industry group, which maintained that the fear of being shut down provided an incentive for owners and operators to comply with federal requirements, saw a need for more uniform and consistent enforcement across the regions and states.

EPA and Congressional Initiatives Could Improve Inspection and Enforcement Effectiveness and Increase Available Resources

EPA is developing several initiatives to encourage states to improve their tank programs. A state must first demonstrate that it has the capabilities and enforcement procedures in place to ensure effective program compliance before EPA will approve a state program. EPA regions oversee the states and conduct annual reviews of their activities, focusing their efforts on more problematic states, such as those that inspect fewer tanks. The regions also have the opportunity, to some extent, to use the state grants as a means to influence state program implementation. According to EPA program managers, regions can also conduct inspections in states and, if necessary, take enforcement action.

Program managers acknowledged that UST-specific resources are limited, problems with inspections and program enforcement continue, and more work is necessary. In EPA’s initiative to improve tank compliance with federal requirements, the agency has said that it will attempt to obtain state commitments to increase their inspection and enforcement activities if they do not meet their compliance targets through 2005. However, EPA does not plan to address the variation in enforcement authorities among states. EPA has announced that it may elect to supplement enforcement in those states that fall significantly below their targets, although the agency may be constrained by available resources.

The Congress may wish to consider whether it can help address EPA and state resource limitations to develop better inspection and enforcement programs. The Congress could provide states more funds from the general treasury. The Congress could also increase the trust fund allotments it grants to states and give the states the flexibility to use some of these funds on inspections and enforcement rather than cleanup—an action the Congress has considered taking in the past. Officials in 40 states said that they would welcome such funding flexibility. The Congress may have to include some safeguards, however, to ensure that this reallocation of funds does not interfere with tank cleanup progress.

Upgraded Tanks Continue to Leak, Although the Extent of the Problem Is Unknown

Despite the equipment requirements, a number of states reported that some of the upgraded tanks leaked last year, while other states did not know whether this was happening with their tanks. EPA has launched studies to determine the extent of the leaks, the effectiveness of the current equipment, and whether the existing equipment standards should be strengthened. States and other stakeholders believe that further equipment requirements are needed and support EPA’s efforts.

In fiscal year 2000, EPA and the states confirmed a total of more than 14,500 leaks or releases from tanks subject to federal regulation, although they were uncertain whether the releases occurred before or after the tanks had been upgraded. According to our survey, 14 states said they had traced newly discovered leaks or releases to upgraded tanks that year, while another 17 states said that they seldom or never detected such leaks. Twenty states, however, could not confirm whether or not their upgraded tanks leaked.

States that reported leaks attributed them to poor operations and maintenance, although 33 states suggested that improper equipment installation may have caused some leaks . The remaining states were uncertain about the possible causes of continuing leaks.

EPA is concerned that upgraded tanks may still be leaking and recognizes the need to collect better data to determine the extent and cause of this problem, including whether the current equipment requirements are sufficient to prevent leaks. Several states and three EPA regions have studies underway to try to determine the extent and source of leaks. Researchers studying tanks in California’s Santa Clara County suspected that 13 of the 16 tanks they reviewed had undetected leaks after the tanks had been upgraded, although they could not conclusively determine whether the leaks and releases came from tanks before or after they had been upgraded. To resolve this problem, California launched a new statewide study to trace leaks coming from newly installed upgraded tanks, which the state expects to be completed by the end of June 2002.

Researchers with the Santa Clara study concluded that tanks with upgraded equipment do not provide complete protection against leaks, and tank monitoring systems, even when properly operated and maintained, cannot guarantee the detection of leaks. Other stakeholders expressed similar concerns about leaking tanks. The expert panel recommended that the agency evaluate the performance of current tank system design and equipment requirements and revise them where necessary to better prevent leaks. The industry group also called on EPA to strengthen the requirements, such as require additional leak containment systems and double-walled tanks. In response, EPA, as one of its four tank program initiatives, plans to undertake a nationwide effort to assess the adequacy of existing equipment requirements to prevent leaks and releases.

Conclusions

The states and EPA cannot ensure that all active tanks have the required leak-, spill-, and overfill-protection equipment installed, nor can they guarantee that the installed equipment is being properly operated and maintained. While the states and EPA regions focus most of their limited resources on monitoring active tanks, empty or inactive tanks require attention to ensure that no soil and groundwater contamination has occurred. Half of the states have not physically inspected all of their tanks and several others have not conducted frequent enough inspections to ensure the tanks’ compliance with program requirements. Moreover, most states and EPA lack authority to use the most effective enforcement tools and many state officials acknowledged that additional enforcement tools and resources were needed to ensure tank compliance. EPA has the opportunity to correct these limitations within its own regions and to help states correct them through its new tank program initiatives. However, the agency has yet to define many of the implementation details, so it is difficult to determine whether the proposed actions will be sufficient to ensure more inspection coverage and more effective enforcement, especially within the states. The Congress has an opportunity to help alleviate the states’ resource shortages by providing additional funding for inspections and enforcement or more flexibility to use existing funds to improve these activities.

Recommendations for Executive Action

To better ensure that underground storage tanks meet federal equipment, operations, and maintenance requirements to prevent leaks and contamination that pose threats to public health, we are making four recommendations to the Administrator, EPA. First, we recommend that EPA address the remaining non-upgraded tanks by working with the states to (1) review available information and determine those empty or inactive tanks that pose the greatest potential health and environmental risks, 2) set up time tables for the owners, states, or EPA to remove or close these tanks in accordance with federal procedures, and (3) take enforcement actions against owners and operators who continue to operate tanks without the required equipment.

Second, we recommend that EPA supplement the agency’s more general training support, such as providing manuals and materials, by having each region work with each of the states in its jurisdiction to determine specific training needs and tailored ways to meet them.

Third, we recommend that EPA negotiate with each state to reach a minimum frequency for physical inspections of all its tanks. Periodic physical inspections of all tanks will provide states better data on non- compliant tanks, and that, in turn, will help states better enforce federal requirements.

Fourth, we recommend that EPA present to the Congress an estimate of the total additional resources the agency and states need to conduct the training, inspection, and enforcement actions necessary to ensure tank compliance with federal requirements. EPA can base the estimate on the information regions obtain from their annual state reviews and grant negotiations.

Matters for Congressional Consideration

The Congress may consider taking the following actions to strengthen EPA’s and the states’ ability to inspect tanks and enforce federal requirements. First, the Congress may want to increase the resources available to the UST program and base the amount of the increase on a consideration of the Administrator’s estimate of additional resources needed. One way to do this would be to increase the amount of funds the Congress provides from the trust fund and to authorize states to spend a limited portion of these monies on training, inspection, and enforcement activities to detect and prevent leaks, as long as this does not interfere with tank cleanup progress.

Second, the Congress may want to (1) authorize EPA to establish a federal requirement for the physical inspections of all tanks on a periodic basis, (2) authorize EPA to prohibit the delivery of fuel to tanks that do not comply with federal requirements, and (3) establish a federal requirement that states have authority to similarly prohibit fuel deliveries.

Agency Comments

We provided a draft of this report to EPA for review and comment. We subsequently met with the Deputy Director and staff of the Office of Underground Storage Tanks who generally agreed with our conclusions and that our recommendations had merit. The agency noted that implementation of the recommendations would depend on a variety of factors, including the willingness of state legislatures to grant the state tank programs the necessary authorities and support. In terms of obtaining additional enforcement tools, EPA agrees that prohibiting the delivery of fuel to non-compliant tanks can be a valuable and effective enforcement tool. The agency does not believe that it currently has the authority to require those state programs that operate under their own laws to incorporate this tool. The agency was also reluctant to make the process of awarding state grants too dependent on the states meeting additional federal requirements, such as minimum frequencies of inspections, because this could seriously jeopardize some states' ability to qualify for grants, thus taking critical resources from these programs. EPA noted that it has recently begun an initiative to try to obtain more complete data from all of the states on, among other things, tank compliance with federal requirements. The agency is establishing compliance performance measures and asking states to provide data on their performance against these measures in their mid-year program reports to EPA, the first of which are due by the end of May 2001. The agency also suggested a number of technical changes that we incorporated.

In addition to the state survey and work in the EPA regions, we (1) reviewed key tank studies and reports published by EPA, local governments, industry, and private organizations, (2) reviewed available EPA and state data on compliance rates, inspections, and enforcement actions, and (3) obtained the views of EPA’s tank program managers and key environmental association and industry officials. We conducted our work between June 2000 and April 2001 in accordance with generally accepted government auditing standards.

Unless you announce its contents earlier, we plan no further distribution of this report until 3 days after the date of this letter. At that time, we will send copies of the report to appropriate congressional committees and interested Members of Congress. We will also send copies of this report to the Honorable Christine Todd Whitman, Administrator, EPA, and the Honorable Mitchell E. Daniels, Jr., Director, Office of Management and Budget. In addition, we will make copies available to others on request.

If you or your staff have any questions about this report, please contact me at (202) 512-3841. Key contributors to this report were Jim Donaghy, Eileen Larence, Gerald Laudermilk, Ingrid Jaeger, and Fran Featherston.

Appendix I: Survey of State Tank Program Managers