United States       tiouo Waste Ana     tr/\ o i o-n-so-
Environmental Protection   Emergency Response    February 1993
Report to House
Appropriations Committee
on the Leaking Underground
Storage Tanks Program
                        Printed on Recycled Paper

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  REPORT TO HOUSE APPROPRIATIONS COMMKTTEE ON
THE LEAKING UNDERGROUND STORAGE TAP-IKS PROGRAM
                    PREPARED BY

         U.S. ENVIRONMENTAL PROTECTION AGENCY
       THE OFFICE OF UNDERGROUND STORAGE TANKS
                    February 1993

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                                      Contents
Executive Summary
1.     IntroductionTo USTs And EPA's Regulatory Program . . ...... ........ ..... • • •

       The Causes Of Releases  ..... ..... ..... ..... ...... ......... • •; .....  ^
       Portraying The Status Of Corrective Action   ............ ........ . • • • ......  •
       The Technical Requirements Of The UST Program ..... . .- ...... • • • ---- .....  3
             Leak Prevention .......... ...... ...... • ......... ..........  ^
             Corrective Action . ....... .........  ... * .......... . . . . ......
       The Financial Responsibility Requirements Of The UST Program ......... ....... j
       State Program Approval Requirements Of The UST Program ............. ......
       OUSTs Approach To Implementing The UST Program  •-••••• ----  ............  ^
             Establishing Compliance Monitoring And Enforcement Programs  ---- . .......  ^
                    Federal Release Detection Initiative ..... ...... ........ ......  J
                    Streamlined Enforcement . . . .............. • ..............  '
             Providing Federal Funds To States  ---- .. ---- • • • • • • • • • <  ..... ......
             Developing State Assurance Programs For Owners And Operators ........ ...  o
             Promoting Innovative Technologies  ......... ........... • • • • •

                                   '  '••                                .... .....  »
 2.     Costs of Cleanup  ...................... •• • • ;     *
                                                                                  .8
       Initial Estimates Of Costs ............. > ............. ....... ' ' '       9
       Factors Influencing Cost Data  ........  ............ ...... ....... ' °  '    9
       Examples Of Costs ---- .......... •  • • •  ..............  ...... *• " ' '.'. " 10.
       Efforts To Control Costs . . ................... • ........ '      ' ' '   . .   1 1
       Streamlining Corrective Action ............ .........•••••••••< ...... •   ^
              Streamlining Site Data ...... ............ .......  • ' ..... . . • • •
              Streamlining Corrective Action Procedures   . . . ...... . • • •• ...... ......   ^
              Benefits of Streamluimg ...... ..... .... ........ .  . . .  ..........

                                                                     ;. . . t .....   13
  3.     Conclusions ..... = ............. ...... ..... ...........
                                        Exhibits
                                                             i

  Exhibit 1      Program Trends in the Number of Confirmed Releases, Cleanups
               Initiated, and Cleanups Completed
  Exhibit 2      Growth Rate of Confirmed Releases, Cleanups Initiated, and Cleanups
               Completed
  Exhibits      UST State Program Approval Status            _   ^nnm
  Exhibit 4    i- Cumulative Appropriations to EPA  versus Cumulative Money
               Collected in the LUST Trust Fund
  Exhibit 5      Time Required to Complete Various Stages of Minnesota s UST
               Corrective Action Process

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                                  EXECUTIVE SUMMARY

       This report provides an overview of the regulatory program including key aspects of
implementation, cleanup costs and EPA's efforts to control them, and program needs and EPA's plans
to address them.

Overview of Underground Storage Tanks and Nature of the Problem

       As of 1992, about 1.6 million petroleum underground storage tanlcs (USTs) and 37,300
hazardous substance USTs are subject to the federal regulations.  Many USTs are used for retail
purposes or for private use. Large petroleum companies, mid-size marketers, and small "Mom and
Pop" gasoline service stations and convenience stores own motor fuel tanks.  Other facilities that use
USTs include public facilities and service sectors such as airports, schools!, and transit authorities.

       When petroleum or hazardous substance tanks leak, the products they release can contaminate
surface and ground water, cause fires and explosions, and expose people lo substances causing
adverse health effects (e.g., benzene, a carcinogen).  Corrosion of tanks and piping, improper system
installation, spills and overfills during product delivery, and piping failures can cause releases.

       Confirmed releases are being reported to implementing agencies at a rate of about 1,000 per
week;  at the state level, individual site managers are overseeing up to 400 cases at a time.  The
number of releases is expected to level off at-about 320,000 releases during fiscal year 1995. (EPA
estimates that about twenty percent of the regulated universe of 1.6 million USTs is leaking.) With
current resources, states and responsible parties are initiating cleanups at about 36,000 sites per year
and completing cleanups at about 16,000 sites per year.

       State or local agency cleanup program staff oversee increasing caseloads of active cleanups,
usually conducted by responsible parties. (Responsible parties conduct approximately 97 percent of
all leaking underground storage tank (LUST) cleanups.) State personnel lace increasing backlogs of
sites awaiting a response and additional demands for guidance  and  oversight.

The Federal Regulations

       The regulations have three major components: Technical requirements for new and existing
tanks and piping, state  program approval (SPA)  requirements,  and  financial responsibility
requirements for UST owners and operators.                     .     •''

       On September 23, 1988, EPA published its final technical  and state approval regulations for
USTs containing regulated substances.  EPA designed the technical regulations to reduce the chance
of releases from UST systems, to increase the likelihood of finding releases quickly when they do
occur, and to secure prompt cleanup.  The state program approval  requirements specify program
components states must have to obtain state program approval  to enable them to operate in lieu of the
federal program.  As of December 1992, EPA approved  10 state programs.  Twenty-two additional
states submitted completed or nearly complete SPA applications. Forty-seven states and territories
have technical regulations for USTs.                                                   -

       The financial responsibility regulations,  published on October 26,11988, require thai UST
owners or operators  demonstrate the ability to pay the costs of corrective action and compensation .-i
third parties for injuries or damages resulting from the release of petroleum from USTs.

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OUST's Approach to Implementing the UST Program

       In managing the national program, the Office of Underground Storage Tanks (OUST) has
adopted a decentralized model that empowers state and local programs.  Under this model, the state
operates under a signed agreement with EPA to implement and manage provisions of the national
UST program at the state level. The national program provides technical suppOrt arid assistance to
states in streamlining their cleanup and prevention programs.  This arrangement allows states to run
programs that are tailored to the needs and demands of their own regulated communities, while EPA
offers implementation support to states, including financial support.

       The LUST Trust Fund was created to help pay for the cleanup of petroleum releases from
USTs where this cleanup cannot or will not be accomplished by the owner or operator or to oversee
responsible party cleanups. The Trust Fund has collected about $900 million as of the end of Fiscal
Year 1992.  Approximately $400 million has been appropriated to EPA through Fiscal Year 1993.

Costs of UST Cleanups and Efforts to Control Costs

       Costs of remediating or cleaning up  releases can vary greatly and can be influenced by several
factors including the volume of the release, the extent of contamination,  geologic characteristics, level
of cleanup required,' and reporting requirements of the states. Prompt responses to releases can help
to reduce cleanup costs.  In cases where groundwater is affected, the costs of cleaning up releases are
increased significantly."                     •"                                       ,

       Sample cost data from states are provided to offer a snapshot of the actual costs being
incurred for cleaning up UST releases.   Actual costs of cleanup are variable and still somewhat
unpredictable.  Costs of remediating LUSTs can generally be grouped into two cost classes-sites with
soil contamination and sites with groundwater contamination. The costs for remediating sites with
soil contamination generally vary between $10,000 and $125,000.  Costs for remediating sites with
groundwater contamination can range from $100,000 to over $1 million depending on the extent of
contamination.                                                                    ,

       Because of the high costs of cleanup, limited state and federal funds, and concern about small
owners and operators having the funds to pay for cleanup, it is essential to identify opportunities for
reducing costs and.streamlinmg corrective action processes.  One of  OUST's top priorities is assisting
in the streamlining of corrective action programs and promoting innovative site investigation and
cleanup technologies.

       A few state programs have worked aggressively at streamlining  for several years and have
demonstrated that it is possible to provide effective oversight at a large number of sites while reduoivj
paperwork.  Some programs are making promising revisions to their corrective aqtion processes thai-
allow simple cleanups at low-risk sites to proceed more quickly with better guidance and reduced
oversight.  Many states' have reaped benefits from communicating and working more effectively «. nh
their "suppliers and customers" - contractors, consultants, tank owners and operators,  and the gcno*  1
public. HoweVer,-^even in the most advanced programs, additional improvements are possible and
necessary in order to meet the program's goals with the resources that are likely to be available.

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           REPORT TO HOUSE APPROPRIATIONS COMiMFTTEE ON
        THE LEAKING UNDERGROUND STORAGE TANKS PROGRAM

                         •                       "                 i ~
        This report responds directly to the Committee's request to provide information on the overall
 underground storage tank (UST) program with emphases on the extent of jthe leaking underground
 storage tank (LUST) problem, the status of EPA's efforts, and the costs involved in remediating the
 problem.  It provides an overview of the regulatory program including key aspects of implementation,
 cleanup costs and EPA's efforts to control them.  Finally, the report discusses program needs and
 EPA's plans to address them.                                      I
 INTRODUCTION TO USTs AND EPA's REGULATORY PROGRAM
                                                                 ,!''•'
        As of 1992, about 1.6 million petroleum USTs and 37,300 hazardous substance USTs are
 subject to the federal regulations.  Many USTs are used for retail purposes or for private use. Motor
 fuel tanks used for retail purposes are owned by large petroleum companies, mid-size marketers, and
 small "Mom and Pop" gasoline service stations and convenience stores.  Other facilities that use
 USTs (but do not sell petroleum products) include public facilities and service sectors such as
 airports, schools, and transit authorities. The large number and wide variety of facilities with USTs
 make the regulation of USTs an especially challenging task.            !

        When petroleum or hazardous substance tanks leak, the products they release can contaminate
 surface and ground water, cause fires and explosions, and expose people to substances causing
 adverse health effects (e.g., benzene, a carcinogen).                   |     .   .

       For regulatory purposes, EPA defines an UST as any tank, including underground piping
 connected to the tank, that contains a regulated substance and the volume jof which is at least 10
 percent underground. "The regulations apply to USTs which are storing pibtroleum products and
 hazardous substances (excluding any substance regulated as a hazardous waste under Subtitle C of the
 Resource Conservation and Recovery Act (RCRA)). The following are not covered by the
 regulations:  Farm and residential  tanks of 1,100 gallons or less capacity used for storing motor fuel
 for noncommercial  purposes; tanks used for storing heating oil for consumptive use on the premises
 where stored; tanks stored on or above the floor of underground areas (e.g., basements, tunnels);
 septic tanks; systems for collecting stormwater or wastewater; flow-through process tanks; emergency
 spill and overfill tanks that are expeditiously emptied after use; and tanks '.holding 110 gallons or less.


 The Causes Of Releases

       According to a study conducted for EPA in 1987, the four major causes of UST releases are
 corrosion of tanks and piping, improper system installation, spills and ove|rfills during product
 delivery, and piping failures.  Before the regulations were promulgated in! 1988, most installed       ,
 underground storage tanks and piping were constructed of bare steel.  Whfen it is  buried in the
 ground, unprotected steel can.be destroyed by external and internal corrosion, resulting in leaks.
Leaks are also often the result of installation mistakes, including improperly.anchoring the tank whiJi
 causes the tank to shift or rupture, or inadequately paving over the tank's surface leading to damage
from vehicular traffic.

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        Spills can occur during product delivery if the delivery truck's hose is disconnected from the
           it is shut off or drained. Overfills occur when a tank's capacity is exceeded.  Most leaks,
               S^gS^ The walls of pipes are smaller and less sturdy than ate the walls
               ^Lilteltolheflald. Pipes suffer much more than do tanks from excesswe
 surface loads, the stress of underground movement, corrosion, and improper installation.


 Portraying The Status Of Corrective Action

        Exhibit 1 shows the cumulative number of confirmed releases, cleanups initiated, and
 cleanups completed from fiscal year 1990 through fiscal year 1992. As of fourth quarter-fiscaj year
 1992  almost 184,000 releases were confirmed, 129,000 cleanups were initiated, and 55,000 cleanups
 were completed by responsible parties or state and local implementing agencies. While the program
 See^successful at Wtiating cleanups  at sites with confirmed releases (70 percenO the number o
 confirmed releases is growing at a rapid rate and creating a backlog of sites that need to be addressed.
 iZugh a greater percentage of cleanups has been completed over the last several years (30 percent
 of confirmed releases), the.total universe of sites continues to grow thereby also contributing to the
 backlog of sites which require further remediation. Exhibit 2 illustrates me growth m the cumulative
 •number of confirmed releases,  cleanups initiated,  and cleanups completed from fiscal year 1988
 through fiscal year 1992.

        Releases have been reported at an average rate of about 1,000 per week, over the last two
 years. The  number of confirmed releases is expected to grow at a rate of about 50 000 releases per
 year until it levels off at about 320,000 releases during fiscal year 1995.  (EPA estimates .that about
 twenty percent of the regulated universe  of 1.6 million USTs is leaking.)  The rate of confirmed
 releases is expected to slow after December 22, 1993, the date by which all UST owners and
 operators must have installed release detection systems.         .

         The states and responsible parties are currently initiating cleanups at about36,000 sites per
 year and completing cleanups at about 16,000 sites per year.  State or local agency  cleanup^ program
 staff oversee increasing caseloads of active cleanups, usually conducted by responsible parties
 (Responsible parties conduct approximately 97 percent of all LUST cleanups.) State personnel fa.,
 increasing backlogs of sites awaiting a response and additional demands for guidance and overset
 Delays in approving site cleanup work can substantially increase the costs of cleanups, since
' contamination may spread in the interim. Added delays can also  disrupt businesses for longer th.u,
 necessary, making cleanups more burdensome for many owners and operators, especially small
 businesses.       .


 The Technical Requirements Of The UST Program

         On September 23, 1988, EPA published its final technical and state program approval
  regulations fotUSTs containing regulated substances. EPA's Office of Underground Storage I   ,
  (OUST) manageslhe program to implement the  regulations. The regulations have three major
  components-  Technical  requirements for new and existing tanks  and piping, financial  respons.h
  requirements for UST owners and operators, and state program approval requirements.

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         EPA designed the technical regulations for USTs to reduce the ctlance of releases from UST
  systems, to increase the likelihood of finding releases quickly when they do occur, and to secure
  prompt cleanup.  OUSTs philosophy is that good tank management practices are the best way to
  prevent leaks and to detect leaks early and initiate cleanup before they spread and cause extensive
  damage.  Exhibit 2 also shows that an increasing number of confirmed releases (i.e., releases from
  LUSTs that have been reported to and confirmed by the state or local implementing agency) have
  been reported.                                                      j
        Leak Prevention                                            |
                                                                    i   • • '
        EPA promulgated requirements in four important categories for nianaging UST systems
 designed to prevent releases: (1) Tank design and installation, (2) release detection, (3) corrosion
 protection, and (4) spill and overfill control.  All systems installed after December 22, 1988 must
 meet federal requirements immediately. However, because of implementation concerns stemming
 from the large number of UST owners and operators, EPA phased in requirements for release
 detection on UST systems existing at the time the regulations were promulgated. The requirements
 are phased in according to the age of the tank; older tanks, which are more likely to leak, are
 required to have release detection systems first.                        !

        By December 22,1993, all owners must utilize an accepted method of release detection on all
 existing systems.  Additionally, owners of existing tank systems have until December 22, 1998 to
 upgrade then- tanks .by installing internal linings and/or cathodic protection, or replace them with new
 tanks made of approved materials such as fiberglass-reinforced plastic. These existing tank systems
 must also be retrofitted with spill and overfill devices.                  j

        Prior to promulgation of the federal regulations for USTs, the majority of tanks were made of
 bare steel and were not equipped with release detection devices.  Since promulgation of the
 regulations, approximately 480,000 USTs have been closed. Many of these closures represent the
 retirement of existing unprotected tank systems.                        i
                                                                   .1

        Corrective Action

        Owners and operators of UST systems containing petroleum or hazardous substances must
 respond to confirmed releases.  This, requirement includes notifying the appropriate agencies of the
 release within a specified period of time; taking immediate action to prevent any further release (e.g .
 removing product from the UST system); monitoring and preventing the spread of contamination int..
 the soil and/or groundwater; assembling detailed information about the site and the nature of the
 release; removing free  product to the maximum extent practicable; investigating soil and groumlu.itcr
 contamination; and, in  appropriate cases, outlining and implementing a detailed corrective action plan
 for remediation.                                                     |


The Financial Responsibility Requirements Of The UST Program

       The financial responsibility regulations, published on October 26, 1988, require that UST
owners or operators demonstrate the ability to pay the costs of corrective ajction and compensati. >n  •

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third parties for injuries or damages resulting from the release of petroleum from USTs.  EPA
requires all owners or operators of petroleum USTs to maintain an annual aggregate of financial
assurance of $1 million or $2 million, depending on the number of USTs owned. EPA adopted a
phased-in schedule that requires large owners and operators with greater financial resources to comply
with the requirements before smaller businesses and municipalities.  In general, small owners and
operators are defined as marketers with fewer than 12 tanks and large owners and operators are
defined as marketers with greater than 13 tanks. Options available to owners and operators include:
Purchasing commercial environmental impairment  liability insurance; demonstrating self-insurance;
obtaining guarantees, surety bonds, or letters of credit; placing the required amount into a trust fund
administered by a third party; or relying on coverage provided by a state assurance fund.

        The experience of state and local agencies  with UST programs shows that large businesses
that own USTs are generally willing and have already begun to comply with UST regulations.
However, small owners, with more limited resources, often need financial assistance to comply. The
cost of obtaining financial assurance coverage is not very high, but the costs that these firms must
incur to be eligible for financial assurance (e.g., costs for installing release detection devices,
replacing or upgrading tanks) are substantial relative to the sales, profits, and assets of these smaller
firms.                                                                    .

          Forty-three states have developed state assurance funds to reduce the economic hardship of
compliance with the financial responsibility requirements and to help pay for the costs of cleanup.
Twenty-nine state assurance funds have been-approved by EPA to serve as  financial responsibility
mechanisms.  In some cases these funds may only supply a portion of the financial assurance
required. For example, some state funds cover corrective action but not third-party liability costs.  In
these cases, state funds may need to be used in combination with other mechanisms to meet the
requirements of the regulations.
                                                                                         /

State Program Approval Requirements Of The UST Program

        A crucial component of the federal UST program is the approval of state programs. The
large size of the regulated universe necessitated that EPA work with states to encourage the
development of state and local UST programs.  The national UST program.is primarily a network of
local and state programs, with EPA providing leadership and assistance and, when necessary,
enforcement support.  Once state programs are approved, they operate in lieu of the federal program.
thus eliminating duplication of regulatory effort. To obtain state program approval (SPA), states must
have programs at least as broad  in scope as the federal program, have technical requirements that are
 "no less stringent" than the federal requirements,  and provide adequate enforcement of compliance.

        Forty-seven states and territories have technical regulations for USTs. In general, states have
greater flexibility in designing then* programs than that allowed under the federal statute. For
 example, many states—unlike EPA—have the authority to regulate distributors of petroleum products
 and can prohibit them from delivering product to  unregistered or unlicensed tanks. As of December
 1992, EPA approved 10 state programs. Twenty-two additional states submitted completed or nearly
 complete SPA applications. Exhibit 3 displays the status of state program  approval.       .

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I  OUST's Approach To Implementing The UST Program                                ,

         In managing die national UST program, OUST has adopted a decentralized model that
  empowers state and local programs.  Under this model, the state operates under a signed agreement
  with EPA to implement and manage provisions of the national UST program at the state level  EPA
  regional offices serve as liaisons between EPA headquarters and states.  Ifhe regions identify, analyze,
  and address appropriate state needs.  The national UST program provides! technical support and
  assistance to states hi streamlining their cleanup and prevention programs!  This arrangement allows
  states to run programs that are tailored to the needs and demands of their jown regulated communities,
  while EPA continues to offer implementation support to states, including financial support.

         In implementing the national UST program, OUST provides support to states in establishing
  compliance monitoring and enforcement programs, funding state program development, paying for
  cleanups that cannot be paid for by a responsible party, developing mechanisms to assist owners and
  operators in meeting the financial responsibility requirements, and helpinf ^improve the cleanup
  process. It is essential for the UST program to focus on prevention activities to prevent future
  releases from occurring  and to detect ongoing releases as early as possibhs.  Detecting releases at an
  early stage can  minimize the spread of contamination, allow for earlier initiation and completion of
  cleanups, and reduce the cost of cleanups.                             !


        Establishing Compliance Monitoring'And Enforcement Programs
              '                      "                          """'.., j - t:
        Because states and local implementing agencies have the lead in enforcing against suspected
 violators of the  UST regulations, OUST initially focused on developing adequate state enforcement
 capability.  EPA conducts some federal enforcement actions to supplementfstate activity. Because the
 UST regulated community is large, diverse, and includes numerous small businesses, OUST also
 believed that innovative outreach materials should be used to promote compliance by the regulated
 community.  OUST has developed a variety of products (e.g., brochures, videotapes, guidance
 manuals, and tool  kits) for a variety of audiences (e.g., owners and operators, state program staff
 contractors, and consultants) on a variety of topics (e.g., tank installation,!closure, release detection
 and corrective action).                                               !

        Federal Release Detection Initiative. In June  1990, OUST initialed a federal release
 detection enforcement initiative to provide assistance to states and to emphasize the seriousness and
 importance of the release detection requirements.  States have successfully used mailings to leverage
 their resources and make initial determinations regarding compliance with the release detection
 requirements. The mailings remind the owners and operators of the release detection requirements.
 request that they complete a self-certification form stating that they are in (iompliance, and ask that
 they submit evidence to demonstrate compliance. The mailings enable state regulators to more ea>.i v
 detect non-compliers.
                         •- '.                   •                    'I.
        Streamlined Enforcement. While frequent inspections and formal enforcement actions
 against violators.are. effective in encouraging compliance among the regulated community, succesMu!
 exercise of formal  enforcement authority requires more staff time than marly developing state
programs have available. OUST, therefore, is exploring the possibility of adapting expedited or
streamlined enforcement concepts to the UST enforcement program as a supplement to more.
traditional procedures.                                        .    •    \   .

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       One example of an expedited enforcement technique adapted by OUST is die field citation, a
"traffic ticket"-stvled settlement that is issued on-site by inspectors and that generally carries a
nenaUv  This Sc^eoften achieves a higher rate of compliance using fewer resources than do
more traditional enforcement methods.  To assist states in developing expedited enforcement
programs, OUST has developed guidance manuals that outline the steps and procedures of
implementing a field citation program.

       OUST pioneered the use of field citations by federal inspectors in order to assist^ states In
       zing their enforcement resources.  Federal inspectors in Regions 1, 4, 6,  8, and 10 have
enecuvely used field citations as a tool to address certain technical violations that states were not
actively enforcing because of resource constraints or limitations in authorities.


       Providing Federal Funds To States

       EPA provides funds to states in two forms:  UST Program Grants and Leaking Underground
      , T^ o!uST) Trust Fund Cooperative Agreements,  UST grant  money, which is> appropr^
 wrth EPA
 Specify the actions states agree to take in return for receiving these monies. The actions that
 S geneSfy Set include identifying suspected releases, developing and enforcing correeuv.
 action orders  overseeing responsible party cleanups, and conducting cojective actions  All states h
 one?FlorlS'h^vfsigned cooperative agreements.  Florida has its own $160 million cleanup tund.


         Developing State Assurance Programs For Owners And Operators

         OUST's early efforts regarding implementation of the financial responsibility requirements •
  USTs under Subtitle I included estimating the costs and benefits of the financial responsibility
  regulations, assessing the viability of alternative financial assurance mechanisms,
                                                                                           •ut

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dissolved product) would be required at only a fifth of all sites and would cost an average of
$168,750.  The costs revealed by this model appear now to be below market costs of actual cleanups.
This may be due to the assumption that only one-fifth of the sites would require extensive
groundwater remediation, the most expensive component of remediation. !
Factors Influencing Cost Data
                                              '.-   "•'" •«.-;-._  i,-.^" ^sg1         .              •    '
       OUST does not require the states to submit cost date to EPA because OUST wants the states
to spend their limited resources on designing corrective action programs'that are the most efficient for
local needs and conditions and on overseeing or conducting site cleanups. | The Agency does not want
the states to divert funds away from cleanup to cost tracking systems. Furthermore, 97 percent of the
cleanups are conducted by responsible-parties, not by the state programs, mailing data collection
difficult.  However, states with assurance funds have started to collect cost data because these states
are responsible for tracking their own funds "and are concerned about the costs of cleanups.

       For the purpose of this report, OUST collected limited datafon average costs from a few
states.  The states with assurance funds are cautious about releasing cost data because they are
concerned that owners/operators  and contractors will obtain state data on maximum allowable costs
and will charge the fund these maximum costs, even if the actual cleanup costs were less. Because of
this concern, we have not identified states by name. It was difficult to obtain comparable data on
UST cleanup costs because the data came from several states, each with its own method of tracking
costs.

Other factors that make drawing  comparisons among the states difficult Ire as follows.
                                                                   -!'-    =   •
                                                                    I
       *       Selectivity bias.  Sites for which cost data are available may represent only the highest
               priority sites, or they may only represent sites that could be cleaned up relatively
               quickly.                                           •   ,
                                              •            • •         !   ''    '  '
       •       Unclosed site bias.  Some sites may not have been fully addressed, and cost data may
               fail to include all past and future remediation costs.
                                                  '  ' .'         '  "3? \
       •       Unclear deductible status. State assurance fund cost data may include only costs
               above deductible amounts.

Notwithstanding, sample cost data from states and other sources do offer a snapshot of the actual
costs being incurred for cleaning up UST releases.
Examples Of Costs

       Based on survey data submitted by the American Petroleum Institute (API) from 23 sites in 12
states, OUSTfbund cleanup costs to average about $370,000, with 23 percent of the total costs being
related to the site assessment phase and 62 percent being related to removing floating and dissolved
contamination and cleaning up soil. The remaining  15 percent of the costs were distributed among
closure, post-closure monitoring, and contractor oversight.  Although the average cost of addressing
these sites appears high, the API sample consisted of expensive releases that were cleaned up prior i.-

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i and the development of state programs. The majority of the sites
i*« a«/1 hofl fmMin/lufQtar /vmf-aminaHnn
recent technology improvements am* *"» u*»&«/pi«v»«fc v» au»iw £»V6».~~~<
were cleaned up in the late 1980's and had groundwater contamination.

       Results from a survey conducted by the Petroleum Marketers Association of America found
per-site costs for performing cleanups in 1991 averaging slightly over $57,000.  A 1991 study
conducted by the University of Tennessee cited average costs for different cleanup scenarios:
$35,000 for simple soil contamination; $110,000 for complex soil contamination; $340,000 for simple
groundwater contamination; and $500,000 for complex groundwater contamination.  In addition, the
University of Tennessee cited the average cost for an environmental assessment at $15,000.

       In one northeastern state, average cleanup costs over the last couple of years from the state
fund were $60,000 per site.  In one western state, data for 20 sites reported to have been completed
(but some of which may require  additional work) indicated average costs of about $126,000. Almost
all of these cleanups involved very extensive soil removal and treatment.

       In one southern state, the average allowable cost per closed claim (based on data from  153
sites) is almost $51,000.  However, these costs refer only to allowable claim amount and, therefore,
do not reflect the total amount of funds spent at a site.  In addition, the data indicated  that additional
work may be required. Groundwater treatment costs will probably account for the majority of the
remaining costs.

        As these sample data show, actual costs of cleanup are variable and still somewhat
unpredictable.  In addition, average cleanup costs are misleading; the costs of cleanup are probably
more appropriately considered within a range of costs.  Costs of remediating LUSTs can generally he
grouped into two cost classes-sites with soil contamination and sites with grouhdwater contamination.
The costs for remediating sites with soil contamination generally vary between $10,000 and $125,000.
Costs for remediating sites with  groundwater contamination can range from $100,000  to over $1
million depending on the extent of contamination.  For example, if a sole-source drinking water
supply is contaminated, the cleanup would be very extensive and quite costly.
                                                 t

Efforts To Control Costs

        Because of the high costs of cleanup, limited state and federal funds,  and concern about small
owners and operators having the funds to pay for cleanup, it is essential to identify  opportunities tor
reducing costs and  streamlining  corrective action processes.  One of OUST's top priorities is assisting
in the streamlining of corrective action programs and promoting innovative site investigation and
cleanup  technologies. The long-term results  should be faster, more protective, and lower cost
cleanups, as well as reduced cleanup backlogs and lessened adverse  economic impacts.  To
demonstrate the Agency's commitment towards these goals, OUST created a financial incentive tor
states  in the national UST program to initiate and complete more cleanups.  EPA rewards states  th.n
have a higher percentage of cleanups initiated and cleanups completed with additional Trust Fund
money.       --•  -
                   10

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               r^^^
w,th cleanup contractors to reduce the costs of cleaninTu^ LUSTs     F     g'    neS°tiati"g
     Promoting Innovative Technologies


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waiting for the results of laboratory analysis.  (Laboratory resuUs are costly an4 cantaketwo weeks
to four months to obtain.)  EPA's Region 4 office just completed a major initiative to educate state
staff and contractors in all  eight of its states on expedited site assessment technologies. Region 4
estimates that about 600 people received the training.

       As training and demonstration projects progress, improved technologies are gaining, wider _
acceptance. New Jersey has proposed a rule change that would allow site assessments based on field
mSirements at selected sites. An estimated two-thirds of the states^smg mnovative^
technologies at least on a pilot or field-testing basis.  EPA will continue^ provide assistance to
stimulate widespread use of these cost- and time-saving technologies.
 COSTS OF CLEANUP

        EPA and the states are concerned about the costs of cleaning upreleases from USTs. This
 section identifier some of the factors that affect cleanup costs, presents E|\'s estimates of costs of
 Sup providesExamples of cleanup costs based on data from statef an|other sources, and outlines
 some of EPA's efforts to reduce costs associated with cleanups.

        Costs of remediating or cleaning up releases can vary greatly and can be influenced by several
 factors  Promptrrponse to releases cari help to reduce cleanup costs.  In cases where groundwater ,s
 affS, Ae^sts of cleaning up releases are-increased significantly. Factors that influence cost
 include:                                                         - .-.•?           ,

                Volume of release;                                   "3
                Extent of soil and groundwater contamination;
                Geologic and hydrogeolbgic characteristics;
                Amount of time elapsed before initiating cleanup;
                Level of competition provided by the procurement process;
                Site assessment and cleanup technology chosen;
                Extent of sampling required;
                Levels of cleanup required;                                 .  „
                Burden of state procedures for qualifying for and obtaining funds from state assurance
                programs; and
                Reporting requirements of the state.
  Initial Estimates Of Costs     .                            •-.-.,.

         At the beginning of the UST program, at a time when few UST cleanups had been
  undertaken EPA estimated corrective action costs for planning purposes and for inclusion in the
  ReSw Impact Analysis for its technical standards. EPA estimated that a release of a typ.cal s,/c
        S S $70,000 to address.  CThis estimate is a weighted average based on a combma,on., ,
         costs per cleanup activity and the likelihood that a given activity would be required.) The
        made *e following assumptions: A site assessment and contaminated soil J^jSLTu  , •
          at every site at a cost of $20,000; the removal of a floating plume (i.e  free product^ • •
          only half of all sites and would cost about $33,000; and removal of a dispersed plume (,. e .

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                                                               I
Streamlining Corrective Action





















    Streamlining Site Data
                                         11

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         The Texas Water Commission is testing an automated corrective action tracking and expert
  advisor system that accepts site data from computer disk files.  This system will both eliminate the
  need for owners, operators, consultants, and contractors to submit data to the state in a paper format
  and ensure that the data submitted are in the approved format.  This system should reduce the amount
  of time that state site managers need to spend reviewing and approving site investigation and
  corrective action plans; therefore, it should expedite the number of cleanups being implemented.


         New Mexico requires that the data needed for ranking a site be submitted within 7 days of
 discovery, as opposed to the federal reporting requirement of 45 days for submitting data on initial
 site characterization. This enables the state to speed up the process of ranking a site and initiating site
 cleanup.

        North Carolina decreased the number of days owners/operators wait for payment from the
 State Fund from 98 days to 54 days, and the state intends to reduce this time to 30 days.  The state
 streamlined the process by developing standard forms and a fee schedule of reimbursable cleanup
 activities and costs. Then, it conducted workshops across the state to train contractors in the new
 payment procedures. State officials note that North Carolina has paid more cleanup costs  in 1992
 than hi the previous two years.  Faster reimbursements are providing an incentive for timely
 cleanups.  North Carolina is currently working on site assessment  and corrective action guidance as
 well.
        Streamlining Corrective Action Procedures

         Some states (e.g., Connecticut, Delaware, Kansas) have streamlined their processes by
 producing maps showing groundwater use and sensitivity.  The cleanup regulations and guidance* t.-
 these states are keyed to the mapped groundwater classification zones.  This approach helps states
 make quick, site-specific decisions, and reduces reporting burdens by using existing data (i.e., m.ips •
 that can be accessed very quickly.                              .

        New Mexico sets priorities for free-product removal actions based on the extent of the tree-'
 product contamination.  ("Free product" is the term .for petroleum that is on the surface of the water
 or between the particles of the soil and is generally accessible for removal or treatment.)  New
 Mexico limits free-product removal actions to sites where the free-product accumulation is thicker
 than one inch.  When free product is less than one inch thick, however, New Mexico requires th.n  t
 be addressed as part of an overall groundwater corrective action plan. The state established this
 policy after it determined that its subsoils have a high clay content that tends to limit the migrati.
 free product.  The state also determined that common free-product removal technologies would r
 highly effective at such sites and could even cause the spread of contamination to the subsoil.
 Therefore, the state decided that remediation for sites wirn less than one inch of free product reqt
 a comprehensive corrective action plan, that was more practicable, protective, and cost effective
     r
 •n
r- :
        Connecticut requires site-specific corrective action plans for only those sites for which it •
issued a notice of violation for groundwater contamination. Sites with groundwater contaminatu •-
more complicated to remediate than sites with soil contamination and require more extensive an.:  .
to determine the appropriate remediation approach.  Soil cleanups tend to be more routine; if th..
initiated immediately, they can reduce the likelihood that contamination will spread to ground*.
                                               12

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         Ohio has proposed a rule change that would allow a monitoring-only alternative for sites
  where migration of the contaminant is unlikely, but the contamination could move and become a
  threat to human health and the environment. For example, a monitoring only option could be used if
  the groundwater is not suitable now or in the foreseeable future for drinking or human contact.  This
  option protects human health and the environment and allows state officials to focus On higher priority
  sites.

         As sites are submitted, the Kansas Trust Fund program either lists them as high ranking sites
  or groups them into packages of 10 or more lower ranking sites.  (Sites that meet the conditions listed
  in the federal technical regulations for conducting site investigations are pilaced on the list of high
  ranking sites.)  Kansas immediately initiates site investigations and/or remediations at its high ranking
  sites.. Monitoring occurs on two to three groups.of sites per month on the lower ranking sites. This
  ranking allows Kansas to focus its resources on sites that are actually presenting a risk, to consistently
  reduce the backlog of lower  risk sites, and to maintain cost controls by working on a volume basis.

        The Missouri program developed guidance documents that explained state requirements and
 provided standard forms to submit the required site data.  Since the guidance was distributed, average
 contractor costs of producing tank closure reports have dropped from $3000 to $300.

        After four years  of streamlining, the Tennessee UST program has, reduced the average time
 for contractors to design a site cleanup from almost two years to four months.  The increased quality
 and timeliness of contractor submissions has resulted in a savings to the slate of approximately 9,000
 hours or 4.3 full-time positions per year.  Otiier improvements have included improving
 communication with field office staff, developing unproved guidance for corrective action plans,
 standardizing correspondence, and reducing  reporting requirements on lov/-risk sites.


        Benefits Of Streamlining

        These early successes have confirmed that EPA's approach to addressing the cleanup backlog
 can work. A few state programs have worked aggressively at streamlining for several years and have
 demonstrated that it is possible to provide effective oversight at a large number of sites while reducing
 paperwork. Some programs  are making promising revisions to their correjctive action processes that
 allow simple cleanups at  low-risk sites to proceed more quickly with better guidance and reduced
 oversight.  Many states have  reaped benefits from communicating and working more effectively with
 their "suppliers and customers"-contractors, consultants, tank owners and; operators, and the general
 public. However, even in the most advanced programs, additional improvements  are possible and
 necessary hi order to meet the program's goals with the resources that are ilikely to be .available.


 CONCLUSIONS

       As discussed earlier in this document, on a national basis, confirmed releases are being
reported to implementing agencies at a rate of about 1,000 per week; at the state level, individual site
managers are overseeing up to 400 cases at a time. The number of confirmed releases is expected  t. >
level off at about 320,000 releases during fiscal year 1995. (EPA estimates that'about twenty percent
of the regulated universe of 1.6 million USTs is leaking.)  The rate of confirmed releases is expects
           ».•*"              '           •                 ,'              .

                                              13           ' "  •      '        :      -

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to slow after December 22,1993, the date by which all UST owners and operators must have
installed release detection systems. With current resources, states and responsible parties are
initiating cleanups at about 36,000 sites per year and completing cleanups at about 16,000 sites per
year.

       Although streamlining efforts have been effective at improving corrective action processes and
increasing the number of cleanups underway, it will be increasingly difficult to keep up with the
growth of confirmed releases.  Cleanups are  expected to become more difficult as states start
remediating the more complicated and expensive groundwater sites.  The majority of cleanups that
have already been completed are sites at which the soil (and not the groundwater) had been
contaminated. Cleanups at soil-contaminated sites are easier, less time consuming, and less costly to
complete than cleanups at  groundwater-contaminated sites.

       Because contamination may spread in the interim, delays in approving site cleanup work can
substantially increase the costs of cleanups. 'Added delays can also disrupt businesses for longer than
necessary, making cleanups more burdensome for many owners-and operators, especially small
businesses.                                                      "'    -             -

       To address soine of these concerns, one of OUST's top priorities will continue to be
streamlining corrective action processes and  promoting innovative site investigation and cleanup
technologies.  OUST will  continue both to encourage state managers and staff to use Total Quality
Management (TQM) techniques to help them identify delays and opportunities for improvement as
well as to provide assistance to states as they modify then- procedures or seek ways to improve
performance in the field.  The UST program will  continue to promote the, use of innovative site
assessment and cleanup technologies hi cooperative efforts with contractors, consultants, tank owners
and operators, and state and local implementing agencies.  The UST program will continue to provide
financial incentives for states to reduce administrative delays hi completing cleanups.

       It is also  essential for the UST program to focus on prevention activities to prevent future
releases from occurring and to detect ongoing releases as early as possible.  Detecting releases at an
early stage can minimize the spread of contamination, allow for early initiation and completion of
cleanups, and reduce the costs of cleanups.  Consequently, enforcement of the technical requirements
of the prevention program will continue to be a priority for the UST pratram..  Enforcement efforts
will include: Developing a federal field citation capability hi each region; focusing federal
enforcement on states with low enforcement activity; providing training and conducting joint
inspections to upgrade state inspector capability; and encouraging states to use non-traditional, low-
cost compliance tools such as field citations, compliance mailings, and making release detection
compliance a condition of receiving state funds for cleanup.

        Because a crucial  component of the  federal UST program 5s the approval of state programs.
EPA's regions will continue to provide assistance to strengthen state programs, help streamline the
state program approval (SPA) process, and facilitate amending state regulations.  The Agency will
continue to use Trust Fund monies as an incentive for obtaining SPA by awarding states that have
obtained (or are cKse to obtaining) state program approval.  The majority of the states are expected to
have then- programs approved by the end of Fiscal Year 1995.                           -
                                                14

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                                 Exhibit 1




     Program Trends in the Number of Confirmed Releases,


           Cleanups Initiated, and Cleanups Completed
          \ -  • *« 'py v* f   "
   250,000
CO
Q. 200,000
CO

Q) 150,000

o
 CD

JD
   100,000 -
    50,000 -
                   1990
    1991


Fiscal Year
1992
           Confirmed Releases  • Cleanups Initiated   | Cleanups Completed


Percentages shown indicate the number of cleanups initiated and completed relative to the number of confirmed releases.

Cleanups completed are a subset of cleanups initiated. All numbers are cumulative to date.

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                              Exhibit 2

      Growth Rate of Confirmed Releases, Cleanups Initiated,
        ;             and Cleanups Completed
200,000
                                                         i   i   i   i   i
           I   II   III  IV  I
HI  IV  I  .11  Ml  IV   I  II  HI  IV  I   I' "."I  IV
             1988
                     1991
                          1989         1990

                                  Fiscal Year

           Confirmed Releases  Cleanups Initiated  Cleanups Completed
                •—B—         .--A--         	•€>	
, .llll,,...V,,ii,|.i,-i,-.i-,u.! a suhsel ol cleanups miliated. All numbers are cumulative to date.
                                                               1992

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                                   Exhibits
              UST State Program Approval Status
                                (December 10, 1992)
                                                                             CZJ-oc
                                                                      Approval Status

                                                                           - Final     (10 slates)

                                                                      K&8$3 - Tentative ( 0 states)

                                                                      I:':I-!;:;.:I- Draft  • (22 stales)
»•• ••-« -^•. ••••••«* <•«• V«i* »<•• •»»• >ubmi
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                            Exhibit 4
 Cumulative Appropriations to EPA Versus Cumulative Money
                Collected in the LUST Trust Fund
  $1,200 '
--$1,000
c
:§  $800
 C  $600 -
 Si  $400 -
"
O  $200
      $0
              89
90
             Cumulative Appropriations
             to EPA
    91          92
Fiscal Year
     Cumulative Trust Fund Monies
     Collected by Treasury
 •piojccted1

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   600 r-
                                   ExhibitS
            Tims Required to Complete Various Stages of
             Minnesota's UST Corrective Action Process
        Standard Letter   Soil Treatment2 Ground Water   Corrective      Closure3
                                      Pump & Treat2  Action Design2
                                  Cleanup Events
                                               1988
1989
1990
1991
1 Sent to owners/operators to require initiation of cleanup.
2 insufficient sample size to determine median duration in 1991
3 Closure indicates that no further act.on is currently required at the site.  Low 1991 median partially attributable to high percentage
ul soil-only sites.

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