The Petroleum Marketers Association of America (PMAA) has published their opinion of the proposed changes to the Federal UST rule changes and it’s not exactly supportive. According to the PMMA article published below, the changes are essentially cost-prohibitive. PMAA provided a breakdown of estimated annual cost per location (plus the whole nation, $1,553,172,720 annually) but a quick look shows many of the supposed costs are either already being done by operators or already required by state law or both. For example:
- $350/year to respond to interstitial alarms. Since 1988 operators by law must respond within 24 hours to interstitial alarms if they have this release detection option. Plus alarm response means the tank may be leaking so the “cost” is protecting themselves.
- $3600/year cost for a years worth of monthly walk through inspections. The majors are already doing monthly if not daily walk throughs anyway plus most of the things on the inspection checklist are required to be done by state law anyway.
- $500/year for Class A, B and C UST operator training. Already required by most states since 2004-1012 depending on the state.
- $100/year “cost” to notify UST agency of new ownership. Already required in most states since the rules were first adopted.
- $175/year to test repaired spill buckets, overfill devices and interstitial spaces. Most contractors should be testing their work anyway so we’re not sure why this would be an additional expense.
- $2,200 to replace failed ball float valves with automatic shut off devices or high level alarms. If every single ball float valve failed every year at every site and had to be replaced every year that would be a fair number but it will be a one time event done only after the ball float fails (which means after the expensive cost of an overfill is paid out.)
To be fair, there are some bona fide new items proposed and these items are not free. Although more and more states are adopting these ideas anyway…
- Testing overfill devices.
- Testing spill buckets.
- Testing the integrity of secondary containment systems.
Anyone who’s been in the industry a while can tell you that today’s USTs are both most prone to problems at these three specific locations, and, ironically, the least tested portions of the UST system. So the proposed rules address the parts most likely to fail or leak. Testing these three key points are not randomly selected as regulatory curiosities but based on state leak studies that show us where today’s UST still leak or fail.
To be further fair, we think the proposed EPA test for secondary containment piping by opening up the sump lid for a visual inspection is in fact expensive, dangerous (crunched toes, confined space, lets water in) and ultimately unnecessary. Let the sump sensor do its job and let operator be trained to respond to alarms).
Anyway, here’s the latest below. We’d like to think something could be negotiated between marketers and the regulators and hopefully some common sense will prevail. Personally we’d like to see the impact numbers adjusted to account for concerns like ours and balance that against the reduction of leaks the proposed rules hope to achieve.
CONGRESS CONCERNED WITH EPA’S PROPOSED UST RULE COST This week Reps. Gregg Harper (R-MS) and John Barrow (D-GA), along with Senate Small Business Committee Chairwoman Mary Landrieu (D-LA) and Ranking Member Jim Risch (R-ID), sent separate bipartisan letters to the EPA expressing concern over a proposed underground storage tanks (UST) rule that would impose $6,960 in new annual compliance costs on marketers. Overall, the House letter garnered 58 signatures and the Senate Small Business Committee letter garnered 11 of the 18 signatures from the Committee including three Democrats. Lawmakers are concerned that the proposed rule could cost the motor fuels retail industry over $1.5 billion annually.
The Harper-Barrow letter urges newly confirmed EPA Administrator Gina McCarthy to withdraw the proposed rule and form a Small Business Advocacy Review (SBAR) panel. The Landrieu-Risch letter is very similar to the House letter and also requests EPA to provide information regarding the extent to which small businesses were asked for information pertaining to the proposed rules new and existing UST requirements. PMAA is concerned the EPA failed to follow federal law and conduct a thorough analysis of the significant compliance costs the rule would impose on small business petroleum marketers. PMAA’s own economic impact analysis shows that the EPA’s estimated $900 in annual compliance costs is substantially off the mark. Last month, Rep. Colleen Hanabusa (D-HI) sent her own letter to EPA pertaining to the state of Hawaii. The House Small Business Committee also plans to send their own letter in the coming weeks over EPA’s UST cost concerns.
In October 2011, EPA’s Office of Underground Storage Tanks (OUST) announced proposed revisions to the 1988 federal UST regulations. If finalized, the proposed rule would mandate: secondary containment for new and replaced tanks and piping, 30-day UST system walkthrough inspections, under dispenser containment, integrity testing and monitoring for interstitial spaces, regularly scheduled testing and inspection of spill and overfill prevention equipment, procedures for determining compatibility of UST systems with alternative fuels, and documentation requirements for ownership transfer of UST systems.
PMAA’s UST Task Force has worked diligently on this issue since the rule was first proposed, meeting with the EPA, winning a comment deadline extension, drafting comments, collecting cost data and coordinating a Small Business Administration review of the EPA’s rulemaking process. The ultimate goal of PMAA’s regulatory and Congressional efforts is to force the EPA to convene a SBAR panel so that the proposed rule can be re-written in a way that significantly reduces any new compliance costs on retail marketers.
PMAA would like to thank Reps. Harper and Barrow for championing the House letter as well as Senators Landrieu and Risch for their leadership in the Senate. PMAA is hopeful EPA will eventually finalize a rule lowering new costs for all marketers, large and small.