&EPA
United States
Environmental Protection
Agency
Office of Water
(4204)
EPA 832-F-00-004
August 2000
FACT SHEET
Funding MTBE Prevention and Remediation
Projects with the Clean Water State
Revolving Fund
The Problem
Methyl Tertiary Butyl Ether (MTBE) is an
automobile fuel additive, introduced in the late 1970's
during lead phase-out as an octane enhancer . It has
been used in increased quantities during the 1990's to
help gasoline meet the requirements of the Federal
Reformulated Gasoline and Oxyfuels programs
required by the Congress in the Clean Air Act
Amendments of 1990. MTBE has been detected in
ground water and surface water with increasing
frequency throughout the country and in some instances
these contaminated waters have been the sources of
drinking water. Due to its high solubility in water and
small molecular size, MTBE can move rapidly through
ground water when introduced by a leak or spill. EPA
is working with its research partners to determine the
specific human health effects of MTBE. However,
because of its unpleasant taste and odor, drinking water
contaminated with MTBE is unacceptable to the public.
The presence of MTBE has caused some water
suppliers in affected areas to
stop using water supplies or incur costs of treatment
and remediation. The major source of ground water
contamination has been from leaking underground and
above ground gasoline storage tanks. Other sources
have included gasoline spills and recreational water
craft.
MTBE Projects and the Clean Water State
Revolving Fund
The Clean Water State Revolving Fund (CWSRF)
programs primary mission is to promote water quality.
For more than 10 years the CWSRF has been helping
communities improve the quality of their water and
protect it from sources of contamination. Besides
financial savings, loan recipients can realize significant
environmental benefits, including protection of public
health and conservation of local watersheds. The state
CWSRF programs in every state and Puerto Rico work
like banks. Federal and state contributions are used to
capitalize or set up the programs. These assets, in turn,
are used to make low or no-interest loans for important
water quality projects. Funds are repaid to the
CWSRF's over terms as long as twenty years. Repaid
funds are then recycled to fund other quality projects.
The MTBE Blue Ribbon Panel on Oxygenates in
Gasoline has encouraged states to consider targeting
State Revolving Funds to help accelerate treatment
and remediation in high priority areas. These
CWSRF resources can help augment the financial
resources currently available to fund the following types
of MTBE prevention and remediation projects:
/ Control runoff from leaking pipelines and
spills
/ Land acquisition to protect drinking water
sources
/ Best Management Practices to safeguard
drinking water supplies
/ Public education programs targeting
marinas and boating facilities
/Spill prevention and remediation at
publicly owned fueling stations
/Funding LUST (Leaking Underground
Storage Tank) prevention and remediation
projects
Capacity of the CWSRF
Nationally, the CWSRF has in excess of $30 billion in
assets (includes loans already made and current funds
available to make loans). Currently, the CWSRF is
funding approximately $3 billion in water quality
projects each year.
Since 1989, the CWSRF program has funded over
1,600 nonpoint source projects, investing more
than $1 billion to clean up polluted runoff.
Getting a Project Funded
The Clean Water Act (CWA) of 1987 authorized the
CWSRF to fund point source (§212), nonpoint source
(§319), and estuary (§320) projects. As stipulated in
§603(c) of the CWA, §212 projects must be publicly
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owned to receive CWSRF funds. Nonpoint and estuary
projects, however, do not have this restriction.
Included in a long list of eligible CWSRF loan
recipients for NFS and estuary projects are community
groups, individuals, agricultural associations and
nonprofit organizations. Since the program is managed
by the states, project funding varies according to the
priorities, policies, and laws within each state. Eligible
applicants also vary by state. The necessary first step
in obtaining CWSRF funding is to see if the state
CWSRF will fund nonpoint source or estuary projects
or support them as a pilot project. Next, get the
activity/project in a state's Nonpoint Source
Management Plan or Estuary Comprehensive
Conservation and Management Plan. Contact your
state's CWSRF, NPS, or Estuary program for details
Sources of Loan Repayment
liach state must approve a source of loan repayment
as part of the application process. Though finding a
source of repayment may prove challenging, it does not
have to be unnecessarily so. Many users of the
CWSRF have demonstrated a high degree of creativity
in identifying sources of loan repayment. The sources
of repayment need not come from the project itself.
Some possibilities include:
•Fees paid by developers on other lands
• recreational fees (fishing licenses, park
entrance fees)
•Stormwater management fees
•Wastewater user charges
•Donations or dues made to nonprofit
groups and associations
•Tax on potential contaminants such as
gasoline and other fuels
•Permit fees on tank owners
Learning by Example
The following are examples of leakage prevention and
remediation work for petroleum storage tanks.
Although MTBE was not involved, similar approaches
can be used for petroleum products containing MTBE.
1 he Wyoming State Lands and Investments Board
has provided $57,042,155 in 0% CWSRF loans to the
Wyoming Department of Environmental Quality
(WDEQ). The WDEQ then contracts with private
firms and contractors to perform site investigations and
corrective action contamination cleanup work at
approximately 300 leaking underground gasoline
storage tank sites. The source of loan repayment for
this innovative approach is from an account called the
Corrective Action Account (CAA). The CAA funds
are derived from a gas severance tax equal to one cent
per gallon on gas and special fuels sold or distributed in
the state.
1 he New York State Environmental Facilities
Corporation provided a CWSRF loan in 1996 to the
New York State Office of General Services for the
remediation of over 700 leaking petroleum tanks at
approximately 360 State facilities. The CWSRF loan
was in excess of $23 million. The CWSRF allowable
work included testing, site assessment, tank removal,
disposal and site remediation. Tank upgrade,
replacement or consolidation costs were not financed by
the CWSRF per EPA policy. The loan is being repaid
by appropriated State funds.
1 he Nebraska State Revolving Fund loaned the
Petroleum Release Remedial Action Fund $ 10.7 million
in 1996 to conduct remediation work on leaking
petroleum storage tanks. The work covered costs of site
assessment, sampling, monitoring, and remediation.
The loan has been repaid from permit fees on tank
owners and gallonage fees on petroleum products.
Challenges Ahead
liPA has been encouraging the states to open their
CWSRF's to the widest variety of water quality
projects, while addressing high priority projects in
targeted watersheds. Those interested in preventing
and remediating MTBE leakage and spills should seek
out their CWSRF programs, gain an understanding of
how their state program works, and participate in the
annual process that determines which projects are
funded.
For more information:
*on the CWSRF, or for a program
representative in your state, please
contact: the Clean Water State Revolving
Fund Branch U.S. Environmental Protection
Agency 1200 Pennsylvania Avenue, NW
(Mail Code 4204)Washington D.C. 20460
Phone: (202) 260-7359 Fax: (202) 260- 1827,
Internet: http://www.epa.gov/OWM
>on MTBE and EPA activities related to
MTBE in drinking water, call the Safe
Drinking Water Hotline at 1-800-426-4791 or
visit the Internet address:
http://www.epa.gov/safewater/mtbe.html
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