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                               EPA 510-R-92-002
          Report to Congress
 Underground Heating Oil and
        Motor Fuel Tanks
    Exempt from Regulation
Under Subtitle I of The Resource
Conservation and Recovery Act
             Prepared by:

     U.S. Environmental Protection Agency
     Office of Underground Storage tanks
           Washington, D.C.
               May 1990
                            Printed on Recycled Paper

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                               TABLE  OF  CONTENTS
                       Section
Page
    Executive Summary
1.  Study Approach
2.  Characteristics of the Population of Exempt Heating Oil
    and Motor Fuel Tank Systems
3.  Extent of Known Releases
4.  Potential Number and Volume of Releases
11
5.  Potential.Environmental and Human Health Effects from
    Releases
14
6.  State Regulation of Exempt Heating Oil and Motor Fuel
    Tank Systems                              ...
15
7.  Major Technical Findings
16
8.  Nontechnical Considerations in Developing Recommendations
18
9.  Recommendations
19
10. Summary
21

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                               EXECUTIVE SUMMARY
       This  report has  been prepared by the U.S.  Environmental Protection
Agency (EPA)  in response to a request by Congress  for additional information
about  underground heating oil and motor fuel tank  systems exempt from
regulation  under Subtitle I of the Resource Conservation and Recovery Act
(RCRA).   Section 9009(d) and (e)  of the 1984 Amendments  to RCRA require EPA to
study  certain exempt tank systems and to report  to the President and Congress
on whether  these tanks should be  subject to the  provisions of Subtitle I.
Subtitle  I  excludes  from regulation nine types of  tank systems,  including the
two  that  are  the focus of this report:1

       •     Tank systems used for storing heating  oil for consumptive use on
            the premises where stored;  and

       •     Farm or  residential tank systems of  1,100 gallons or less .capacity
            used for storing motor fuel  for noncommercial purposes.

This report is  submitted in fulfillment  of the requirements  of RCRA  Section
9000(d) and (e).   It is  accompanied by a background document providing
additional  detail on the issues and analyses addressed by this report.

      Heating oil tank systems are subdivided in this report into tank  systems
located at  (1)  farms,  (2)  residences,  and (3) nonresldential facilities.
Residential facilities  include apartment complexes, condominiums, townhouses,
and single-family homes.   Nonresidential facilities include  commercial,
institutional,  government,  manufacturing,  and military facilities.  Motor  fuel
tank systems  are  subdivided into  tank systems located at  (1)  farms and  (2)
residences.

      The estimated  population of exempt heating oil  and  motor fuel tanks'  in
the United  States  is about 3.1 million,  almost twice  the  number  of USTs
currently regulated  under  Subtitle I  (1.7 million).   This  total  population  is
subdivided  by sector as  follows:                        •
Heating Oil Tanks (2.7 million')

      (1)   Residential sector:

      (2)   Nonresidential sector:

      (3)   Farm sector:
1.9  million tanks (61%)

0.8  million tanks (25%)

0.04 million tanks  (1%)
     1 Unless explicitly specified,  hereafter the term "exempt tank systems"
refers only to these two types of tank systems.

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Motor Fuel Tanks (0.4 million)

      (1)   Farm sector:

      (2)   Residential sector:
0.3  million tanks (10%)

0.1  million tanks  (3%)
      Heating oil'tank systems, especially residential heating oil tank
systems, are concentrated in the Northeast; relatively few are located in the
West.  Farm heating oil tank systems are more uniformly distributed throughout
the country.  Exempt farm motor fuel tank systems are concentrated in the
North Central and West; the Northeast contains few of these tank systems.

      The technical characteristics of exempt heating oil and motor fuel tank
systems are best understood by comparison to regulated underground storage
tanks (USTs).  Some characteristics of exempt tank systems are similar to
those of regulated USTs:

      •     Most exempt tank systems and regulated USTs are constructed of
            steel and are not protected against corrosion;
            Existing populations of exempt tank systems and regulated
            have similar age distributions; and
                            USTs
      •     Exempt nonresidential heating oil tanks are generally similar to
            regulated tanks in size and gauge (thickness.) of steel.

Other technical characteristics show differences:

      •     Most exempt'residential and farm tank systems are smaller and made
            of lighter-gauge steel than most regulated USTs;

      •     Most exempt tank systems.(87 percent) store heating oils, but most
            regulated USTs store motor fuels;

      •     Although most exempt tank systems use suction pumps, about one-
            half of the regulated USTs use pressurized pumps that force
            product out of the tank system; and                      .

      •     Effective methods of leak prevention and detection are less
            commonly an integral part of exempt nonresidential tank systems
            compared with regulated USTs and are seldom a part of small exempt
            residential or farm tank systems.

      The annual rate of reported releases from exempt tank systems increased
substantially between 1970 and 1985, and the rate continues to increase.
Reports of releases from exempt tank systems occur most frequently from
nonresidential heating oil•facilities in the Northeast and involve releases of
fuel oil No. 2.  The documented data, case histories, and other information
collected during this study indicate that exempt tank systems and regulated
USTs tend to be made of similar material (steel), have similar age
distributions, and experience releases from similar causes.  The potential for
                                      111

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exempt tank systems to leak (if they are not protected against corrosion),
therefore, is likely to be similar to the potential for unprotected regulated
USTs to leak.

      Most releases from exempt heating oil or motor fuel tank systems travel
through the same routes as releases from regulated USTs and can result in
contamination of air, soil, surface water and, most significantly, ground
water.  The extent of soil and ground-water contamination is likely to be less
from sudden releases of heating oils over a short period of time than from
sudden releases of gasoline, because heating oils have a higher resistance to
flow and lower solubility than gasoline.  The greatest concern with releases
from exempt heating oil tank systems is not from sudden releases over a short
period of time, but from slow, protracted releases of unknown volume that go
unnoticed and undetected over a long period of time.  As with regulated USTs,
all of the products stored in exempt tank systems contain substances that can
cause adverse health effects.

      In making recommendations, EPA considered not only the technical
information regarding exempt tank systems,  but also other, factors that could
influence the appropriateness of federal regulations.  First, EPA considered
the burden that federal regulation of exempt tank systems would add to the
states' existing resources to implement EPA's current UST regulations.
Second, EPA considered the diversity of exempt tank owners, including their
knowledge of and ability to comply with 'federal environmental regulations.
Third, EPA considered the economic efficiency of targeting resources through
educational and technical assistance programs to those areas of the nation
where the problems with exempt tank systems are the greatest versus
establishing a uniform national program.

      Based upon the above considerations,  EPA concluded that the solution to
the problems with exempt tank systems does not lie in uniform federal
regulation of these systems at this time.  Instead, a feasible long-term
solution, based on banning the installation of new unprotected tank systems',.
educating owners and operators on the risks posed by exempt -tank systems, and
helping states build on their existing UST programs by providing technical
support, should be pursued.

Recommendations

      EPA recommends that the heating oil and motor fuel tanks exempted in
Sections 9001(A) and (B) of RCRA be addressed by the following actions:

      n     Subject all exempt heating oil and motor fuel tank sectors studied
            in this investigation to a ban on the installation of new
            unprotected tank systems similar to the Interim Prohibition of
            Section 9003(g).  The ban would apply to all owners, operators,
            and installers of exempt heating oil and motor fuel tank systems.

      a     Except for the above ban on the installation of new unprotected
            tank systems, continue the Subtitle I exemption for those heating
            oil and motor fuel tank systems that are currently exempt.
                                      IV

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      •     Authorize EPA, to develop educational and technical assistance
            programs specifically targeted to exempt heating oil and motor
            fuel tank systems designed to:

                  Educate owners and operators (as well as industry groups
                  such as fuel distributors) on proper tank management and the
                  risks posed by exempt tank systems;  and

                  Assist state and local governments in developing and
                  implementing their own regulatory programs as needed.

      EPA believes that the problem posed by exempt heating oil and motor fuel
tank systems will best be addressed by the three recommendations above.   If
these recommendations are accepted .and established, EPA will monitor their
effectiveness and evaluate the necessity for undertaking further actions.

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                             REPORT  TO  CONGRESS:

      UNDERGROUND  HEATING  OIL AND  MOTOR  FUEL TANKS  EXEMPT FROM REGULATION
        UNDER SUBTITLE I OF THE RESOURCE CONSERVATION AND RECOVERY ACT
      This report has been prepared by the U.S. Environmental Protection
Agency (EPA) in response to a requirement by Congress for additional
information about underground heating oil and motor fuel tank systems that are
exempt from regulation under Subtitle I of the Resource Conservation and
Recovery Act (RCRA).   Section 9009(d) and (e) of the 1984 Amendments to RCRA
require EPA to study certain exempt tank systems and report to the President
and Congress on whether these tanks should be subject to the provisions of
Subtitle I.   Subtitle I excludes from regulation nine types of tank systems,
including the two that are the focus of this report:

      •     Tank systems used for storing heating oil for consumptive use on
            the premises where stored; and

      •     Farm or residential tank systems of 1,100 gallons or less capacity
            used for storing motor fuel for noncommercial purposes.2

    •  In response to the above requirement,  EPA has prepared this report to
Congress.  A supporting background document, "Underground Heating Oil and
Motor Fuel Tanks Exempt from Regulation Under Subtitle I of RCRA:  Background
Document for a Report to Congress," provides additional detail on exempt tank
characteristics; size and geographic location of the population of tank
systems; the known extent and assessed potential for tank systems to leak; the
potential health risks associated with exposures to released products;  and the
current extent of state and local regulation of exempt tank systems.  In
addressing these issues, the background document compares exempt tank systems
to USTs regulated under Subtitle I.

      This report to Congress is organized into the following ten sections:

      1.    Study Approach;
      2 The following structures  or tank.systems  are also excluded from
regulation under Subtitle I, but are not addressed in this study:  septic
tanks;  pipeline facilities regulated under certain other federal and state
laws; surface impoundments,  pits, ponds, or lagoons; storm water or wastewater
collection systems; .flow-through process tanks; liquid traps or associated
gathering lines directly related to oil or gas production and gathering
operations; and storage tanks situated on or.above the surface of the floor in
underground areas.   Subtitle I exempts all of these tank systems by excluding
them from the definition of an underground storage tank (UST).   When used in
this report,the term "exempt tank system" refers  only to exempt heating oil
and motor fuel tanks, while the term "regulated UST" refers only to
underground storage tanks regulated under Subtitle I.

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       2.
Characteristics of the Population of Exempt Heating Oil and Motor
Fuel Tank  Systems;  '  .
       3.

       4.

       5.

       6.


       7.

       8.

       9.

       10.
Extent of Known Releases;

Potential Number and Volume of Releases;

Potential Environmental and Human Health Effects from Releases;

State Regulation of Exempt Heating Oil and Motor Fuel Tank
Systems;

Major Technical Findings

Nontechnical Considerations Used for Developing Recommendations;

Recommendations;  and

Summary.
The  source  and derivation of the  findings provided in Sections 1 through 7 are
explained in  the background document  and its  appendices.

1.   STUDY APPROACH

      The background  study leading  to this report was conducted in three
stages.  First, EPA assessed the  size, geographic location, and other
characteristics of the population of  exempt tank systems, including the extent
of known releases from exempt tank  systems, using standard survey research
techniques.   Second,  this  assessment  was.reviewed by federal and state
government  officials  and underground  tank systems industry representatives
Finally, additional analyses, using supplemental data provided by these
representatives, were thereafter  conducted to address comments received from
this review.   The findings  of this  report are based on the background study.

      The exempt tank systems reported here are divided into two major types:
motor fuel  tank systems and heating oil tank systems.  Exempt motor fuel tank
systems are subdivided into  tank  systems located at (1) farms and (2)
residences.   Exempt heating oil tank  systems are subdivided into .tank systems
used at (1) farms, (2) residences,  and (3) nonresidential facilities.
Residential facilities include apartment complexes,  condominiums,  townhouses,
and single-family homes.  Nonresidential facilities include commercial,
institutional, government, and manufacturing facilities.  The distinction
between motor  fuels and heating oils  and the breakdown of sectors  among farms,
residences, and nonresidential facilities in this report correspond generally
to the language of the statutory  exemption.

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2.  CHARACTERISTICS OF THE POPULATION OF EXEMPT HEATING OIL AND MOTOR FUEL
TANK SYSTEMS3

      Population.   The estimated population of exempt tanks in the United
States is about 3.1 million, almost twice the number of USTs currently
regulated under Subtitle I.   The 3.1 million total population of exempt tanks
breaks down into the following sectors:
Heating Oil Tanks (2.7 million')

      •     Residential sector:

      •     Nonresidential sector:

      •     Farm .sector:

Motor Fuel Tanks (0.4 million)

      •     Farm sector:

      •     Residential sector:
1.9  million tanks (61%)

0.8  million tanks (25%)

0.04 million tanks (1%)



0.3  million tanks (10%)

0.1  million tanks (3%)
These estimates are based on information obtained from the U.S. Departments of
Commerce (Bureau of Census), Agriculture, and Energy; state UST programs; and
underground storage industry officials.4

      Geographic Concentration.  Exhibit 1 illustrates the geographic
concentration of exempt tank systems  (excluding residential motor fuel tank
systems); Exhibit 2 illustrates the distribution by individual, use sectors.
Heating oil tank systems, in general, are concentrated in the Northeast;
relatively few are located in the West.  That is especially true of
residential heating oil tank systems.  Farm heating oil tank systems are more
uniformly distributed throughout the  country.  Exempt farm motor fuel tank •
systems are concentrated in the North Central and West; the Northeast contains
the fewest of these tank systems.  The geographic concentration of exempt
residential motor fuel tank systems could not be established with available
data.

     Technical and Operational Characteristics.  The technical and operational
characteristics of exempt heating oil and motor fuel tank systems are better
understood if compared and contrasted to those of regulated USTs, as
illustrated in Exhibit 3.  The similarities and differences with respect to
key technical and operational characteristics for exempt tank  systems and
regulated USTs are summarized below.
     3 A tank system is defined to include the tank and its connected piping,
underground ancillary equipment, and containment system, ,if any.

      4 A full description of the derivation of these estimates can be found
in Appendix A of the Background Document.

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                                    Exhibit 1
            Geographic Concentration of Exempt Heating Oil and
                         Motor Fuel Tank Systems
                                                   a
                                                          54%
      Source: See background document.
       & Totals for the West include Alaska and Hawaii.
S84032-7J

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                                       Exhibit 2
             Geographic Concentration of Exempt Heating Oil and
                   Motor Fuel Tank Systems By Use Sector0
 Residential Heating OH Tank Systems (61%)b
                             64%
                             Northeast
     Farm Heating Oil Tank Systems (1%)1
                             Northeast
                    South
Nonresidential Heating Oil Tank Systems (25%f
                                                                              43%
                                                                               Northeast
                                                                      South
     Farm Motor Fuel Tank Systems (toyo)1
                                                                   38%
                                                                 North Central  LA Northeast
Source: See background document
 a Totals for West include Alaska and Hawaii.                                        .
 b Numbers in parentheses are the percentage that each use sector contributes to the universe of exempt
  heating oil and motor fuel tank systems.
S84032-41

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                             Exhibits
    Similarities (*) and Differences (-) Between Characteristics
          of Exempt Tanks Systems and Regulated USTs
        Heating Oil Tanks
   Other Petroleum Tanks
      Nonresidential

* mostly bare steel
* usually over 15 years old
* similar to regulated USTs in
  size and thickness of steel
- usually suction pumping
- most frequently fuel oil No. 2;
  however, fuel oils Nos. 4, 5, or
  6 are common
     Regulated USTs

 *  usually bare steel
 *  usually over 15 years old
 -  50% pressure pumping
        Residential

* mostly bare steel
* usually over 15 years old
- smaller and thinner steel than
  most regulated USTs
- usually suction pumping
- usually fuel oil No. 2
Exempt Farm and Residential

 * mostly bare steel
 * usually over 15 years old
 - smaller and thinner steel than
   most regulated USTs
 - usually suction pumping

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       Similarities:
            Most  exempt  tank systems and regulated USTs are  constructed of
            steel and are  not protected against  corrosion;

            Existing  exempt  tank  systems and  regulated USTs  have similar age
            distributions  (usually over 15 years old); and

            Exempt nonresidential heating oil tanks are similar to regulated
            tanks in  size  and gauge (thickness)  of steel.
      Differences:
       9     Most exempt residential and farm tank systems have a storage
            capacity of less  than 1,100 gallons.  These tanks, therefore, tend
            to be much smaller and made of lighter-gauge steel than most
            regulated USTs;

       •     Although most exempt tank systems store heating oils (87 percent,
            based on our population estimates), most regulated USTs store
            motor fuels;

       •     Although most exempt tank systems use suction pumps, about one-
            half of the regulated USTs (including most of the retail motor
            fuel facilities)  use pressurized pumps.  The.use of suction pumps
            results in negative pressure on the feed lines; if a leak occurs,
            air and water are therefore drawn in, instead of product being
            pumped out; and

       n     Effective methods of leak prevention and detection are less
            commonly an integral part of exempt nonresidential tank systems
            compared to regulated USTs and are seldom a part of small exempt
            residential or farm tank systems.

       Information regarding technical characteristics of exempt tank systems
was obtained from the UST'notification/registration data bases in California,
Maine, and Montana (these states require notification of exempt tank systems).
These  data were augmented with information obtained from interviews with
representatives from state and local governments, and the underground storage
industry.

3.  EXTENT OF KNOWN RELEASES

       The most comprehensive  source of documented information.available on
releases from exempt heating  oil and motor fuel tank systems and regulated
USTs is EPA's "State and Local Release Incident Survey" (referred to as the
"National Data Base").   This data base provides information on releases from
1,978  exempt heating oil tank systems and 25 exempt motor fuel tank systems
that were reported to state and local government agencies between 1970 and
1985.

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      Reports of releases;from regulated USTs are more common than reports of
releases from exempt tank systems'. .-.The National Data Base  includes data on
roughly five times as many reported releases from regulated USTs as from
exempt tank systems.  The disparity in the number of reported releases from
regulated USTs and exempt tank systems may, in part, be attributed to the
following factors: (1) gasoline, the product stored most frequently in
regulated USTs, has greater mobility in the environment and volatility than
heating oils, the product stored most frequently in exempt  tank systems; (2)
state and federal regulations on regulated USTs are more prevalent than
regulations concerning exempt tank systems; (-3) regulated UST owners are more
aware of the need to monitor their tank systems for releases; and (4) the
increased use of leak detection devices for regulated USTs.

      The annual rate of reported releases from exempt tank systems increased
substantially from 1970 to 1984 (Exhibit 4), and the rate continues to
increase.  For example, the National Data Base includes only 425 reports of
releases from exempt tank systems nationwide in 1984, compared with:

      •     237 reported releases in Maine during 1986;

      ••     295 reported releases in Maryland over a 2-year period beginning
            late 1985; and

      •     An estimated 1,500 releases of heating oil from exempt tank
            systems reported in New York over a 2-year period beginning late
            1985.
                        '               '           t?                 "     -
Thus, the number of reported releases in just these three states in 2 years
exceeds the number of incidents reported for the entire nation over the
previous 15 years.                        •

      The increase in the number of reported releases is probably attributable
to a combination of factors:  (1) the recent increase in the awareness by tank
owners and operators that their tanks may leak and possibly threaten public
health and safety; (2) the development of new environmental protection
programs and the increase in staffing of existing programs  at the state and
local level during the 1970s and 1980s (in fact, few programs kept track of
such problems before 1970); and (3) the large number of underground heating
oil tank systems installed during the 1950s and 1960s that have now reached
the age at which tank failures are increasingly likely to occur.

      Reports of releases from exempt tank systems occur most frequently in
the Northeast and most often involve releases of fuel oil No. 2.  The National
Data Base reveals that 79 percent of the reported releases  from exempt tank
systems are from nonresidential facilities (Exhibit 5), even though this
sector comprises only 25 percent of the total number of exempt tank systems.
Host of the remaining reported releases from exempt tank systems are from
residential heating oil tank systems;  very few releases have been reported
from exempt farm or residential motor fuel tank systems.   Some of the reasons
for the disproportionate number of reported releases from exempt
nonresidential heating oil tank systems compared with exempt residential tank

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                                      Exhibit 4
          Number of Reported Releases from Exempt Tank Systems
          500-
          450-
          400-
          350-
          300-1—
 Number
          250
   of
Incidents 200
          150
          1004—
           50
            o
till
                                                                   I   II
               1970 '71  '72  '73  '74  '75  '76  '77  '78  '79  '80  '81  '82 '83 '84
                                           Year
      Source: EPA State and Local Release Incident Survey. (Data for 198i> are excluded because
      information is available for only part of the year.)

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                                 Exhibit 5.
            NUMBER OF REPORTED RELEASES FROM EXEMPT TANK SYSTEMS BY SECTOR
Product

Heating Oils:
Fuel Oil #1
Fuel Oil n
Fuel Oil #4
Fuel Oils #5
and #6
Unspecified ,
Motor Fuels
TOTALS
(%)
Source: EPA State

Residential

5
222
10
5
155
21
418
(21)
and Local Release
Sector
Total
Farm Nonresidential3

0
6
0
0
5
4
15
«D
Incident

67
752
123
253
375
b
1,570
(79)
Survey, 1970 -
number (%)

72
980
133
258
535
25
2,003
(100)
1985.

(4)
(49)
• (7)
(13)
(27).
(1)
(100)

     a This category includes commercial, institutional,  government, and manufacturin|
facilities.
       These USTs  are not exempt from Subtitle I regulation.
                                          10

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systems are that (1) nonresidential systems typically release larger
quantities, which makes detection of releases easier; (2) state and local
regulation of these tank systems is more extensive than of federally exempt
residential or farm tank systems; and (3) nonresidential owners and operators
are more familiar with leak detection practices and rele.ase reporting
requirements.

     Releases from exempt tanks do have the potential to cause long-term
damage.  Most reported releases from both exempt tank systems and regulated
USTs amount to 500 gallons or less; releases of less thsm 100 gallons, are
common.  In some instances, however, large quantities of stored product have
been released from tanks in either population.  Furthermore, some releases
from exempt tank systems have occurred over a protracted period of time, and
the contamination from such releases has persisted in the environment for
years  despite attempts to clean up the site through corrective actions
(Exhibit 6).  The list of examples provided in Exhibit 6 is not intended to be
comprehensive or even representative of documented releases, but illustrates
the potential for releases from exempt systems to result: in long-term damages.

4.  POTENTIAL NUMBER AND VOLUME OF RELEASES

     Judging from the documented data, case histories, atnd other information
collected during this study, there is little reason to believe that exempt
tank systems are significantly less likely to release their stored products
than are regulated USTs.  The observed differences between regulated USTs and
exempt tank systems in the number of reported releases in the National Data
Base reflects differences in the detection and reporting of releases rather
than a difference in the actual number of releases.         .

     The most commonly cited causes of releases for both regulated USTs and
exempt tank systems are (1) structural failure (including design and
fabrication defects, loose fittings, and valve and mechanical failures), (2)
corrosion,  (3) spills, and (4) overfills.  The evidence reveals that external
corrosion is a more common cause of tank failure than is internal corrosion. .
External corrosion  is caused primarily by the external ssoil and site-specific
conditions rather than by the contents of the tanks.  It; has been suggested
that regulated USTs are more likely to corrode than exempt tank systems
because stray electrical currents are a significant cause of tank corrosion
and there are more  stray electrical currents in urban areas where regulated
USTs tend to be concentrated.  Others have suggested that small exempt
residential and farm tank systems are more likely to fail as a result of
corrosion because these systems  typically have thinner-walled tanks made of  .
lighter-gauge steel.  The data concerning the age of tanks when releases are
reported, however,  do not support either of those two hypotheses.  Because
both populations of underground  tanks are made of similar material (steel) and
are not commonly protected against corrosion, have similar age distributions,
                                       11

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                              Exhibit 6

    EXAMPLES OF INCIDENTS WHERE LARGE OR PROTRACTED RELEASES  FROM
 EXEMPT TANK SYSTEMS HAVE OCCURRED AND PERSISTED IN THE ENVIRONMENT
Maryland. Department of Environment officials report that cleanup and
containment action has continued for one exempt tank system release case
for 14 years.'  The release was first detected when a nursing home
switched from fuel oil No. 6 to fuel oil No. 2 and found that consumption
greatly increased.  The consumption increase was actually due to leakage;
an estimated total of 300,000 gallons of product has been released into
the soil from the tank system, 280,000 gallons of which has been
recovered.

Massachusetts.  The Barnstable County Health and Environmental Department
(HED) has documented a large release of fuel oil No. 2 from a 275-gallon
exempt heating oil tank system serving a private residence.  The leak
contaminated 15 cubic yards of soil, an on-site well, and a nearby pond.
The extent of damage led HED officials to believe product was released
over an extended period, possibly as long as 10 years.  Corrective .action
is expected to cost $80,000 and will include removing the underground
tank and contaminated soil and installing monitoring wells and a product
recovery system.

Minnesota.  In 1975 the Pollution Control Agency received a complaint of
oil seepage into a basement, but the source of the release could not be
determined at that time.  Later, when the source (a creamery) was found,
product recovery wells recovered 4,000 gallons of fuel oil No. 5, and the
source --a leaking 14,000-gallon underground heating oil tank (which had
a hole) -- was removed.  Twelve years later, oil seeping into nearby
basements is still being reported, and the state has determined that the
recovery efforts need to continue.

    A second case, also requiring ongoing remedial action, involved a
commercial heating oil tank system that released 10,000 gallons of fuel
oils No. 2 and No. 5 and caused extensive contamination of soil and
ground water.  Fuel oil No. 5 had not been used for several years before
the leak was detected, indicating the release and ground-water
contamination persisted over a long period of time.  The state has
conducted site remediation, but does not believe the problem has been
fully resolved, even 10 years after the initial report of the spill.
Source:  See Section 3 of Background Document.
                                 12

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and experience releases at about the same age, their potential to leak appears
to be similar.5

     Even though the potential to release stored substances appears to be
similar for exempt tank systems and regulated USTs, it is difficult to
ascertain whether the total amount released would be greater for regulated
USTs or the exempt tank systems.  The total amount of product released is a
function of total amount stored (including tank capacity and the number of
refills), the rate of release, and the duration of the release.  The combined
effect of these different factors is difficult to ascertain; their individual
effects are briefly discussed below.

     The storage capacity of exempt residential and farm tank systems is
typically less than 1,100 gallons, which is much less than that of many exempt
nonresidential heating oil facilities.  The storage capacity of exempt
nonresidential tank systems is quite similar to that of regulated USTs.  In
the case of a sudden catastrophic release, the potential amount released is
expected to be similar for exempt nonresidential tank systems and regulated
USTs, but much less for most exempt residential and farm USTs.

     The rate of release of a stored substance from exempt tank systems is
expected to be slower than the rate of release from regulated USTs for two
reasons.  First, exempt tank systems typically store heating oils while  .
regulated USTs typically store gasoline.  Heating oils have a higher viscosity
(resistance to flow) than gasoline and, all else being equal, would typically
drain more slowly.  Second, exempt tank systems typically use suction pumps to
deliver the stored substance from the tank to the delivery point, but
regulated USTs more frequently use. pressure pumps.  When a leak occurs in the
piping, a frequent location of releases, the products stored in exempt tank
systems, typically under negative pressure in the supply line, would not be
forced out.  Instead, air and/or water would be sucked in.  In contrast, the
products stored in regulated USTs, typically under much higher positive
pressure, are forced out-with pressure once a leak develops.  Because of the
viscosity and pressure differences, therefore, the rate at which product is
released:, from regulated USTs is greater than that from exempt tank systems.

       The duration of releases typically can be expected to be shorter for
gasoline than for heating oils because gasoline is (1) more volatile (thus
fumes are more readily noticed); (2) released faster (thus making-decreases in
volume stored more readily apparent for leak detection methods such as
     5 There has been an increase in the use of noncorrodible tanks and an
improvement in the leak prevention and detection practices of regulated USTs
since 1985, presumably as a result of voluntary compliance with the Interim
Prohibition and the implementation of the federal UST rule.  The similarities
between exempt tank systems and regulated USTs discussed in this report,
therefore, may well decrease each year if exempt tank systems continue to be
exempt from regulation.
                                      13

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inventory monitoring); and  (3) more mobile in the environment  (thus increasing
the number of sites that contamination may reach where it is easily detected).

       Although  the first two  factors --  the amount and rate of product
released -- favor a potentially greater volume of released product from
regulated USTs than from exempt heating oil tank systems, these two factors
are offset by the higher likelihood of protracted releases from exempt tank
systems.  Protracted releases may go undetected over a long period of time,
during which significant amounts of product may be released.   It is difficult,
therefore, to draw conclusions regarding differences between these two
populations in terms of the potential volume released.

5.  POTENTIAL ENVIRONMENTAL AND HUMAN HEALTH EFFECTS FROM RELEASES

       The products stored  in both regulated USTs and exempt tank systems
contain substances that can cause adverse health effects.  Releases of heating
oil and motor fuels from exempt tank systems can lead to adverse human health
impacts as a result of exposure to contaminated air, soil, surface water, and,
most significantly, ground water.  As discussed above, the extent of soil and
ground-water contamination is likely to be less from sudden releases of
heating oils from exempt tank systems than from sudden releases of gasoline
from regulated USTs.

       Most releases from exempt tank systems travel through many of the same
routes as releases from regulated USTs.   Releases can saturate soils and
dissolve in ground water.  Volatile components of stored products can also
vaporize and contaminate the air.  The most likely routes of human exposure to
the water-soluble components of petroleum products stored in exempt tank
systems are through drinking, bathing, and other direct contact with
contaminated water, and by breathing vaporized contaminants during showering.
Releases can also seep into basements, forming pools that can produce
additional points where humans can come into direct contact with the released
products.  Humans can also be exposed through contact with contaminated soil.
This exposure can occur when fluctuations in the water table cause released
petroleum products to rise to the surface, during construction operations,  and
during the cleanup of a release.

       Releases from exempt tank systems can lead to human exposures to a
number of different substances, including gasoline,  diesel fuel,  and several
grades of heating oils.  The range of known harmful effects from the three
basic categories of petroleum product stored in exempt tank systems is
summarized below.  Prolonged exposure to low levels of contamination is likely
to be of the most concern,  because high levels of contamination are likely to
be detected more quickly through bad taste or smell enabling precautionary
measures to prevent exposure to be taken promptly.

       Gasoline.  Gasoline is the most mobile of all the fuels and, thus, is
likely to be transported to places where humans,  animals,  and property can be
exposed to health and safety risks.   For example,  releases of gasoline
commonly reach ground water, and vapors  commonly accumulate in basements  and
other areas where they create a safety hazard from fire and explosion.
                                      14

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Gasoline has been the subject of extensive study under EPA's Subtitle I
regulatory program, and is classified as a probable human carcinogen.  As a
result, the study that led to this report and the accompanying background
document focus primarily on heating oils, the petroleum products stored most
frequently in exempt tank systems.

       Middle Distillates.  Diesel fuel, kerosene, fuel oil Nos. 1 and 2, and
some blends of fuel oil No. 4 are broadly classified as middle distillates.
(Kerosene is not classified as an exempt heating oil, but its technical
specifications and constituents are very similar to those of fuel oil No. 1.)
These products are stored more frequently in exempt tank systems than are
gasoline or residual fuels, and although middle distillates are slightly less
mobile than gasoline, they are still likely to contaminate ground water.
Diesel fuel and fuel oil No. 2 have been reported to be weak to moderate
carcinogens in skin painting studies with laboratory animals.  In addition,
several components of the middle distillates are known to cause other adverse
health effects.  The constituents of middle distillates, however, have not
been well studied, and the toxicities of the constituents identified may not
be representative of the true toxicity of the middle distillates.

       Residual Fuels.  These stored products include fuel oil Nos. 5 and 6,
and most blends of fuel oil No. 4.  Although residual fuels contain
significant amounts of two probable human carcinogens and they often contain
blending agents that have been shown to be potent carcinogens in laboratory
animals, the higher viscosity (resistance to flow) reduces the chance that
releases of residual fuels will reach ground water in large concentrations.
The low water solubilities of most constituents of residual fuels also make it
more likely that the extent of dissolved ground-wate.r contamination from
residual fuel would be less than that from gasoline and middle distillate
releases.  Therefore, releases of residual fuels probably pose less of a
threat to human health than gasoline or middle distillates.   The potential for
residual fuels to contaminate ground water does exist,  however,  especially if
releases occur near a sewer line or in fractured bedrock.   In addition,
residual fuels are difficult to clean up after a release and are likely to
persist in the environment longer than other fuels.

6.  STATE REGULATION OF EXEMPT HEATING OIL AND MOTOR FUEL TANK SYSTEMS'

       During February 1988 EPA examined statutes and regulations from 34
states to determine the current level of regulation of exempt heating oil and •
motor fuel tank systems by states (the remaining 16 states did not have UST
statutes available for review).  This review revealed that at least 21 states
currently consider exempt tank systems to be a problem and have included them
to some extent in their regulatory framework.  Of the 34 states reviewed:

       •      Twenty states have some regulations  for exempt heating oil tank
              systems  (panel 1 of Exhibit 7) ;

       •      Ten states have some regulations for exempt motor fuel tank
              systems  (panel 2 of Exhibit 7);
                                      15

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                                                   Exhibit 7

                State Regulation of Exempt Heating Oil and Motor Fuel Tank Systems
(1)   States with Some Regulations for Exempt Heating
                   Oil Tank Systems
                                            (2) States with Some Regulations for Exempt Motor Fuel
                                                                 Tank Systems
(3)
States with Some Regulations for All
      Exempt Tank Systems
(4)  States with No Regulations for Exempt Tank Systems
aThis information pertains to the 34 states reviewed. The following states did not have an UST statute available for review and do not appear in any
of the categories of this exhibit: AL, AK, AR, CO, GA, ID, IN, MS, MO, NV, OK, OR, PA, TN, WA, and VW.
 Source: See background study for this report.

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       •       Six states have  some  regulations  for  all  exempt tank systems
               (panel  3  of  Exhibit 7);  and

       •       Thirteen  states  have  no  regulations for i exempt  heating oil and
               motor fuel tank  systems  (panel  4  of Exhibit 7).

       Although some  states require only  that owners and  operators  of exempt
tank systems report and clean up releases, others impose a variety  of
technical standards (such as material of construction and leak detection) for
new and existing tank systems.   Many of the state regulations governing exempt
heating oil tank systems,  however,  cover only those tank systems with a
capacity equal to or greater than a specified size,  most commonly 1,100
gallons.

       State regulation of exempt tank systems  is generally more extensive in
those states where the greatest number of exempt tank systems are located.
For example, all of the states in the Northeast, except Pennsylvania and
Delaware, have some regulations regarding exempt heating oil tank systems
(exempt heating oil tank systems located in the Northeast comprise almost 50
percent of all exempt tank systems).

 7.  MAJOR TECHNICAL FINDINGS

       A large number of heating oil and motor  fuel tank  systems are  exempt
from regulation under Subtitle I of RCRA (about 3.1 million),  and the majority
of these (2.7 million) are used for storing heating oil.  The exempt heating
oil tank sector consists largely of 1.9 million residential tanks,  which are
geographically concentrated in the Northeast,  and 0.8 million nonresidential
tanks, which are more evenly distributed throughout the nation.  Farm and
residential motor fuel tank systems account for most of the remaining exempt
tanks included within the. ,«cope of this study (0.4 milllion) .

       Exempt residential heating oil tanks range in size from small  275-
gallon tanks at single family dwellings to very large tanks at apartment
buildings;  however, the vast majority of.tanks are small,  with capacities less
than 1,100 gallons.  Although exempt nonresidential tank systems may also vary
in size, they tend to be much larger than exempt residential tank systems and
are similar in size to regulated USTs.   Both residential and nonresidential
exempt tank systems tend to be constructed with unprotected bare steel,  are
similar in age to regulated USTs, and are likely to corrode and fail, just as
are regulated USTs.

       Products released from exempt tank systems can ^contaminate ground-
water resources -.ind cause adverse effects on human health and the environment.
Releases of heating oils travel through the same routes in the environment as
releases of gasoline from regulated USTs;  however,  releases of gasoline tend
to be transported more quickly and are more easily detected.   Although the
amount of product potentially released over a short period of time is similar
for exempt nonresidential tanks and regulated tanks, the biggest problems with
releases from exempt heating oil tank systems are from slow protracted
                                      17

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releases of unknown volume that go unnoticed and undetected for long periods
of time.

        Some states have already begun  to address the problems associated with
exempt tank systems.  At least 20 states currently have some regulations on
exempt heating oil tank systems, and 10 states have some regulations on exempt
motor fuel tank systems.  Regulation of exempt heating oil tank systems is
most prevalent in the Northeast, where the greatest number of these tanks are
located.

8.  NONTECHNICAL CONSIDERATIONS IN DEVELOPING RECOMMENDATIONS

        In making recommendations, EPA  considered not only the technical
information regarding exempt tank systems, but also other factors that could
influence the effectiveness of federal regulations.  First,  EPA considered the
burden that federal regulation of exempt tank systems would add to the states'
existing resources to implement EPA's current UST regulations.  Second, EPA
considered the diversity of exempt tank owners, including their knowledge of
and ability to comply with federal environmental regulations.  Third, EPA
considered the economic efficiency of targeting resources through a
nonregulatory program to'those areas of the nation where the problems with
exempt tank systems are the greatest against establishing a uniform national
program.

       While developing the Subtitle I regulatory program, EPA concluded that
federal regulation's must be implemented principally at the state and local
level, rather than at the federal level.  EPA reached this conclusion because
the number of tank systems to be regulated was large,  and most of these USTs
were owned and operated by small businesses that were not accustomed to
dealing with complex regulations.  These considerations are even more
important for exempt tank systems because of their even larger number and more
diverse characteristics.  Hence, EPA believes that regulations designed to
address the problems associated with exempt tank systems should satisfy the
following requirements: (1) the regulations must be implemented at the state
and local level; (2) the regulations must be kept simple and understandable in
order to facilitate implementation; and (3) the regulations must be perceived
as reasonable by the regulated community in order to encourage voluntary
compliance.

       Using the above criteria, EPA concluded that the problems associated
with exempt tank systems should be addressed differently from those associated
with USTs currently regulated under Subtitle I for four reasons:

        •      A majority  of the  exempt tank systems are owned and operated by
              homeowners  who have  limited technical expertise and financial
              resources to  comply with federal regulations.

        •      There  are fewer  established channels, such as  routine
              inspections by fire marshals,  for ensuring compliance  by exempt
              tank owners.   Creation of such channels  for ensuring compliance
              would require enormous expenditures.
                                      18

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        •      Developing uniform federal regulations for the entire nation
              .may not be warranted because the 'types of exempt tank systerns--
               and the associated problems-- vary throughout the U.S.  For
               example,. small residential heating oil tank systems are
               concentrated in the Northeast; farm motor fuel tank systems are
               concentrated in the. North Central and West.

        •      States and many local governments have established UST
               regulatory programs that did not exist at the time Subtitle I
               was developed.  These programs now provide states an
               opportunity to target additional resources to address exempt
               tanks wherever needed instead of relying on uniform federal
               regulations.   Many of these programs have in fact begun to
               regulate exempt tank systems (see Section 6).

        For the reasons cited above,  EPA concluded that the solution to the
 problems with exempt tank systems does  not lie in uniform federal regulation
 of these systems  at this time.   Instead,  a feasible long-term solution,  based
 on banning the installation of  new unprotected tank systems,  educating owners
 and operators on  the risks  posed by  exempt tank systems,  and helping states
 build on the existing UST programs by providing technicsil support,  should be
 pursued.

        The technical and nontechnical considerations discussed in Sections 7
 and 8 have prompted EPA to  develop a set of three recommendations,  which are
 discussed below in Section  9.

 9.  RECOMMENDATIONS

        EPA recommends that the  motor fuel and heating oil tanks exempted in
 Sections 9001(A)  and (B) of RCRA be  addressed by the following Congressional
 actions:                                                         f

 (1)  Ban the Installation of New Unprotected Tank Systems

      •  EPA recommends that all  exempt heating oil and motor fuel tank sectors
.studied in this investigation be subject to a ban on the. installation of new
 unprotected tank  systems similar to  the Interim Prohibition  of Section 9003(g)
 of RCRA.  The ban would apply to all owners,  operators,  and  installers of
 exempt heating oil and motor fuel tank systems and should read:  •

        "No person may install an underground tank system for the purpose of
 storing heating oil or motor.*fuel unless the tank system:

        (A)    Will prevent releases due to corrosion or, structural failure
               for the operational life of the tank system;

         (B)    Is cathodically protected against corrosion, constructed of
               noncorrodible material, steel clad with a noncorrodible
                                       19

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                material,  or designed in a manner to prevent the  release  of
                heating oil or motor fuel;  and

      ,   (C) '    Is constructed or lined- with material that  is  compatible  with
                the substance to be stored."

        Rationale:  The majority of currently used  exempt tank systems are
 constructed of unprotected bare  steel and, therefore, will eventually corrode
 and leak.  A prohibition on the  installation of new unprotected tanks provides
 a long-term solution to the problem by reducing the potential for new tank
 systems to fail because of corrosion or structural defect.   The positive
 effects of a ban on the installation of unprotected underground tank systems
 have already been demonstrated in the case of regulated USTs, where such a ban
 has led to a documented dramatic increase in the installation of protected
 tank systems in the last four years.  This action would have a minimal impact
 on owners and operators,  would not require significant amount of federal
 administration, and would not interfere with the opportunity for state and
 local governments to tailor their regulatory programs to meet their specific
 needs.
 (2)     Except for the Ban on the Installation of New Unprotected Tank
        Systems. Continue the Subtitle I Exemption for Heatlnp Oil and Mot
        Fuel Tank Systems
        EPA recommends that Congress continue to exempt from Subtitle  I
 regulation those heating oil  and motor  fuel  tank systems  that are currpntly
 exempt.                                                                   J

        Rationale:  Exempt tank systems  tend  to be geographically
 concentrated;  therefore,  uniform federal regulations may  not be appropriate
 for all  states.   Furthermore,  establishment  of uniform federal regulations may
 impose a significant burden on state UST programs  and  direct resources away
 from the existing Subtitle  I  regulatory program.   Lastly, implementing federal
 regulations for  this very large population would require  excessive resources
with little assurance that  the  regulated community would  comply with the
regulations.   EPA believes  that these resources  would be better spent by
providing  federal assistance.to state and local  governments to expand upon
their existing programs.
       Establish Educational and Technical Assistance Programs for Exempt
       Tank Systems
       EPA recommends that Congress provide the Agency the authority to
develop educational and technical assistance programs specifically targeted to
exempt heating oil and motor fuel tank systems.  These programs would be
designed to:

       •      Educate owners and operators, as well as industry groups, such
              as fuel distributors, on the risks posed by exempt tank systems
              and how these risks can be reduced by adopting proper tank
              management practices; and
                                      20

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        •      Assist  state  and local  governments  in  developing  and
              implementing  their  own  regulatory programs.

        Rationale:  Because  of  the sector's unique characteristics, EPA
believes resources can most effectively be used by providing information and
outreach programs encouraging the proper management of exempt tank systems.
States concerned with exempt tank systems can develop their programs to best
address their specific needs.  EPA could assist states in meeting those needs.


10.  SUMMARY

        EPA believes that the problems posed by exempt heating oil and motor
fuel tank systems can best be addressed by establishing a ban on the
installation of new unprotected tank systems and developing federal
educational and technical assistance programs tailored to the characteristics
of the owners and operators of exempt tank systems and the on-going efforts of
state UST programs.  Consequently, EPA makes the following three
recommendations:                                   ;

        •      Establish a ban  on  installation of new unprotected underground
              heating oil and  motor fuel tank systems to address the major
              technical problem leading to tank failure;

        •      Continue the  current exemption for heating oil and motor fuel
              tank systems, because the unique characteristics of these
              sectors make  the  implementation of federal regulations
              Inappropriate; and

        •      Establish educational and technical assistance programs to
              disseminate information to owners of exempt tank systems
              regarding proper  tank management and to provide technical
              assistance to state and local governments to develop their
              regulatory programs, as needed.

If these three recommendations  are accepted and established,  EPA will monitor
their effectiveness and evaluate the necessity for^ undertaking further
actions.
                                      21

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