    [Senate Hearing 107-953]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-953

                            UNDERGROUND STORAGE TANK
                                 COMPLIANCE ACT

    =======================================================================

                                    HEARINGS

                                   BEFORE THE

         SUBCOMMITTEE ON SUPERFUND, TOXICS, RISK, AND WASTE MANAGEMENT

                                    AND THE

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 1850

             A BILL TO AMEND THE SOLID WASTE DISPOSAL ACT TO BRING
    UNDERGROUND STORAGE TANKS INTO COMPLIANCE WITH SUBTITLE I OF THAT ACT,
      TO PROMOTE CLEANUP OF LEAKING UNDERGROUND STORAGE TANKS, TO PROVIDE
              SUFFICIENT RESOURCES FOR SUCH COMPLIANCE AND CLEANUP

                                   __________

                         FEBRUARY 25, 2002--PASCOAG, RI
                                  MAY 8, 2002

                                   __________

      Printed for the use of the Committee on Environment and Public Works

    83-685              U.S. GOVERNMENT PRINTING OFFICE
                                WASHINGTON : 2003
    ____________________________________________________________________________
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                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                          one hundred seventh congress
                                 second session

                      JAMES M. JEFFORDS, Vermont, Chairman
    MAX BAUCUS, Montana                  BOB SMITH, New Hampshire
    HARRY REID, Nevada                   JOHN W. WARNER, Virginia
    BOB GRAHAM, Florida                  JAMES M. INHOFE, Oklahoma
    JOSEPH I. LIEBERMAN, Connecticut     CHRISTOPHER S. BOND, Missouri
    BARBARA BOXER, California            GEORGE V. VOINOVICH, Ohio
    RON WYDEN, Oregon                    MICHAEL D. CRAPO, Idaho
    THOMAS R. CARPER, Delaware           LINCOLN CHAFEE, Rhode Island
    HILLARY RODHAM CLINTON, New York     ARLEN SPECTER, Pennsylvania
    JON S. CORZINE, New Jersey           BEN NIGHTHORSE CAMPBELL,
                                             Colorado\1\
                                         PETE V. DOMENICI, New Mexico\2\
                     Ken Connolly, Majority Staff Director
                     Dave Conover, Minority Staff Director
                                     ------

         Subcommittee on Superfund, Toxics, Risk, and Waste Management

                      BARBARA BOXER, California, Chairman
    MAX BAUCUS, Montana                  LINCOLN CHAFEE, Rhode Island
    RON WYDEN, Oregon                    JOHN W. WARNER, Virginia
    THOMAS R. CARPER, Delaware           JAMES M. INHOFE, Oklahoma
    HILLARY RODHAM CLINTON, New York     MICHAEL D. CRAPO, Idaho
    JON S. CORZINE, New Jersey           ARLEN SPECTER, Pennsylvania

    1Senator Campbell resigned from the committee on April
        23, 2002.
    2Pursuant to S. Res. 251, Senator Domenici was
        appointed to the committee on April 23, 2003.

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page

                         FEBRUARY 25, 2002--PASCOAG, RI
                               OPENING STATEMENTS

    Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island     1
    Kennedy, Hon. Patrick, U.S. Representative from the State of
      Rhode Island...................................................     5
    Reed, Hon. Jack, U.S. Senator from the State of Rhode Island.....     4

                                   WITNESSES

    DeBlois, Arthur J. III, DB Companies, Pawtucket, RI, on behalf of
      the Society of Independent Gasoline Marketers of America and
      the National Association of Convenience Stores.................    20
        Prepared statement...........................................    33
    Kos, Jeff, president, Environmental Council of Rhode Island,
      Providence, RI.................................................    24
    Rabideau, Hon. Scott, Rhode Island State Representative,
      Harrisville, RI................................................    18
        Prepared statement...........................................    32
    Reilly, George, resident, Pascoag, RI............................     7
        Prepared statement...........................................    27
    Reitsma, Jan, director, Rhode Island Department of Environmental
      Management, Providence, RI.....................................    11
        Prepared statement...........................................    29
    Wallace, Michael, resident, Pascoag, RI..........................    10
                                     ------

                                  MAY 8, 2002
                               OPENING STATEMENTS

    Boxer, Hon. Barbara, U.S. Senator from the State of California...    37
    Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island    38
    Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...    39
    Smith, Hon. Bob, U.S. Senator from the State of New Hampshire....    62

                                   WITNESSES

    Brunner, Roger, Profits Center Manager, Zurich North America.....    59
        Prepared statement...........................................    89
    Cope, Grant, staff attorney, U.S. Public Interest Research Group.    54
        Prepared statement...........................................    73
    DeBlois, Arthur J. III, president and CEO, DB Companies, Inc.,
      representing the Society of Independent Gasoline Marketers of
      America and the National Association of Convenience Stores.....    57
        Prepared statement...........................................    83
    Horinko, Marianne, Assistant Administrator, Office of Solid Waste
      and Emergency Response, U.S. Environmental Protection Agency...    41
        Prepared statement...........................................    62

                                     (iii)

    Perkins, Craig, director of Environmental and Public Works
      Management, city of Santa Monica, CA...........................    50
        Prepared statement...........................................    72
    Stephenson, John, Director, Natural Resources and Environment,
      U.S. General Accounting Office.................................    43
        Prepared statement...........................................    67
    Stiller, Kathleen, Delaware Department of Natural Resources and
      Environmental Control..........................................    56
        Prepared statement...........................................    79

                              ADDITIONAL MATERIAL

    Statements:
        Golding, Randy, Tracer Research Corporation..................    90
        Marty, Shannan, Tracer Research Corporation..................    90
        Petroleum Marketers Association of America (PMAA)............    96

                    UNDERGROUND STORAGE TANK COMPLIANCE ACT

                                  ----------

                           MONDAY, FEBRUARY 25, 2002

                                           U.S. Senate,
                     Committee on Environment and Public Works,
                                                           Pascoag, RI.
        The committee met, pursuant to notice, at 9:30 a.m. at the
    Pascoag Utility District Maintenance Garage, 253 Pascoag Main
    Street, Pascoag, RI, Hon. Lincoln Chafee (acting chairman of
    the committee) presiding.
        Present: Senator Lincoln Chafee.
        Also present: Senator Jack Reed and Representative Patrick
    Kennedy.

    OPENING STATEMENT OF HON. LINCOLN CHAFEE, U.S. SENATOR FROM THE
                         STATE OF RHODE ISLAND

        Senator Chafee. Good morning, everybody. Thank you very
    much for coming. I'm Senator Lincoln Chafee. With me today are
    Senator Jack Reed and Representative Patrick Kennedy. This is a
    hearing of the Environment and Public Works Committee, and it
    is now in order.
        Each of us at this table will give opening statements and
    then we'll take testimony from two panels. I encourage
    everybody here, to use the forms in the back of the room. Any
    thoughts that you have on how we can improve the legislation,
    fill out the forms and take your testimony for the Environment
    and Public Works Committee. The format this morning is to hear
    from the witnesses that have been designated. We do encourage
    very much additional testimony from everybody here, and
    certainly in between the panels and afterwards, we look forward
    to sharing your thoughts. Your written testimony would go to
    the committee down in Washington.
        I would also like to welcome Wally Lees, the town council
    president. Thank you, Council President Lees. Bill Andrews and
    Ed Bonczack are here also from the town council. Thank you very
    much for all your hard work all fall. You earn your money in
    these type of situations. Al Palmisciano, the chair of the
    Water District, is that correct? Ann Polachek, Walter Choiniere
    and Bill Mageaw, if I pronounced this right.
        Scott Rabideau is here, also. He's going to testify. State
    Representative Scott Rabideau, Town Manager Mike Wood and Town
    Solicitor Walter Kane, thank you, also, for all your hard work
    over the past fall. We look forward to working with you as we
    go forward.
        The Senate Environment and Public Works Committee is
    conducting today's field hearing to examine issues surrounding
    leaking underground storage tanks and the damage they can cause
    to communities. This hearing will also focus on the Underground
    Storage Tank Compliance Act of 2001, which I introduced in
    December. Anyone who's followed the situation in the Pascoag
    will understand the severe consequences when underground
    storage tanks leak and go undetected.
        It is my hope that your experiences will help foster policy
    changes that prevent this type of crisis from occurring again.
        People affected by the gasoline additive known as ``MTBE''
    frequently ask how it reached their water systems.
        In 1990, Congress passed a law to require that gasoline be
    mixed with additives to make it burn more cleanly. This
    reformulated gasoline is used in areas that do not meet clean
    air standards. MTBE was the most common additive. Although it
    made significant improvements to our air, we learned the hard
    way about the devastating effects it can have on groundwater if
    gasoline tanks leak.
        We briefly discussed actions that the Federal Government
    has taken to address underground storage tanks.
        In 1984, well before MTBE, Congress enacted a comprehensive
    program to address the problem of leaking tanks. This was a
    reaction to discover underground, or groundwater contamination
    in different parts of the country and its leakage from
    underground tanks. In fact, Rhode Island played a leading role
    in formulating that debate, and in 1983, a 60 Minutes report
    about leaking tanks in Canob Park in Richmond increased the
    nation's awareness about this widespread problem. Rhode Island
    has a dubious distinction in this arena.
        A 1984 law imposed minimum Federal requirements for leak
    detection in prevention standards for underground tanks, and
    then in 1988, owners and operators of existing tank systems
    were given 10 years to upgrade the place of closed tanks that
    didn't meet minimum Federal requirements.
        When the deadline passed 10 years later, in 1998, many
    underground storage tanks still failed to meet the Federal
    standards to prevent spillage, over-filling and corrosion.
        As a ranking member of the Subcommittee on Superfund,
    Toxics, Risk Based Management, I was concerned about the
    potential problems regarding tanks. To assess this situation, I
    asked the General Accounting Office to examine compliance of
    tanks with Federal requirements.
        Last May, the GAO concluded that approximately 76,000 tanks
    have never been upgraded to meet minimum Federal standards.
        In addition, GAO found that more than 200,000 tanks have
    not been operated and maintained properly. GAO said that
    infrequent tank inspections and limited funding are among the
    contributing factors. The GAO report is back on the back table
    and it's a superlative report, which I encourage everybody here
    to pick up and read. In order to assist communities that
    grapple with these problems and to prevent such problems from
    reoccurring, I introduced the Bipartisan Underground Storage
    Tank Compliance Act. It requires inspection of all underground
    storage tanks every 2 years and for the first time focuses on
    the training of tank operators. It simply does not make sense
    to install modern protective equipment if the people who
    operate them do so improperly, and that's usually leak
    detection devices, that when the buzzer goes off. The 18-year-
    old operator turns off the buzzer because he hasn't been
    trained on what to do. The bill also provides the Federal
    Government and States to improve necessary, to ensure that all
    parties are meeting Federal standards. Very importantly, this
    bill gives EPA the authority to prohibit delivery of fuel to
    tanks that are not in compliance. Very, very important. The
    existing legislation doesn't have that component. Prohibit the
    delivery of fuel. If that's not a stick to get compliance, then
    nothing is. It also provides $200 million to clean up the sites
    contaminated by MTBE.
        While my bill solely addresses the tank situation, there is
    a separate effort ongoing in Congress which I support to
    permanently ban the use of MTBE gasoline. Last September, I
    voted for a bill on the Environment and Public Works Committee
    to ban the use of MTBE while maintaining clean air benefits
    that it has provided.
        My underground storage bank bill was independent from that
    effort, because even if we get MTBE out of the gasoline, we
    still must fix the tanks so that ordinary gasoline does not
    spill in the environment.
        We're looking forward to the testimony of our witnesses and
    grateful that the town has been proactive and willing to share
    its problems in order to promote solutions.
        There is a model for solving our problems, and I will
    assure that will bring your experiences in place back to our
    Nation's Capitol as we continue to finance these depressing
    problems.
        The Canob Park story in 1983 opened our eyes to the problem
    in the beginning, but the MTBE crisis in Pascoag has taught us
    that our work is not done.
        I, once again, encourage all to submit any kind of written
    testimony after today's hearing is done.

        [The prepared statement of Senator Chafee follows:]

          Statement of Hon. Lincoln D. Chafee, U.S. Senator from the
                             State of Rhode Island

        Good morning. The Senate Environment and Public Works Committee is
    conducting today's field hearing to examine issues surrounding leaking
    underground storage tanks and the impact that they have on communities.
    This hearing will also focus on the Underground Storage Tank Compliance
    Act of 2001, which I introduced in December. Anyone who has followed
    the situation in Pascoag will understand the severe impacts that can
    occur when underground storage tanks leak and go undetected. While we
    are working at the Federal, State, and local levels to bring assistance
    to you, it is my hope that your experiences will help foster policy
    changes that will prevent this type of crisis from reoccurring.
        People affected by the gasoline additive known as MTBE frequently
    ask how it reached their water systems. In 1990, Congress passed a law
    to require that gasoline be mixed with additives to make it burn more
    cleanly. This reformulated gasoline is used in areas that do not meet
    clean air standards. In the Northeast, MTBE was the most common
    additive. While it made significant improvements to our air, we learned
    the hard way about the devastating effects it can have on groundwater
    if gasoline storage tanks leak.
        Let me briefly discuss the actions that the Federal Government has
    taken to address underground storage tanks. In 1984, Congress enacted a
    comprehensive program to address the problem of leaking tanks. This was
    in reaction to the discovery of groundwater contamination in different
    parts of the country and its linkage to underground tanks. In fact,
    Rhode Island played a leading role in formulating that debate. A 1983
    60 Minutes report about leaking tanks in Canob Park in Richmond
    increased the nation's awareness about this widespread problem.
        The 1984 law imposed minimum Federal requirements for leak
    detection and prevention standards for underground tanks. In 1988,
    owners and operators of existing tank systems were given 10 years to
    upgrade, replace, or close tanks that didn't meet minimum Federal
    requirements. As the deadline passed in December 1998, many underground
    storage tanks failed to meet the Federal standards to prevent spillage,
    overfilling, and corrosion.
        As ranking member on the Subcommittee on Superfund, Toxics, Risk
    and Waste Management, I was concerned about the potential problems
    regarding tanks. To assess the situation, I asked the U.S. General
    Accounting Office to examine compliance of tanks with Federal
    requirements. Last May, GAO concluded that approximately 76,000 tanks
    have never been upgraded to meet minimum Federal standards. In
    addition, GAO found that more than 200,000 tanks are not being operated
    and maintained properly. GAO cited infrequent tank inspections and
    limited funding among the contributing factors.
        In order to assist communities that are grappling with these
    problems and to prevent such problems from reoccurring, I introduced
    the bipartisan Underground Storage Tank Compliance Act. It requires the
    inspection of all underground storage tanks every 2 years and for the
    first time focuses on the training of tank operators. It simply does
    not make sense to install modern, protective equipment if the people
    who operate them do so improperly. The bill also provides the Federal
    Government and States with the tools necessary to ensure that all
    parties are meeting Federal standards. In addition, the legislation
    emphasizes compliance of tanks owned by Federal, State, and local
    governments, and provides $200 million for cleanup of sites
    contaminated by MTBE.
        While my bill solely addresses the tank situation, there is a
    separate effort ongoing in Congress, which I support, to permanently
    ban the use of MTBE in gasoline. Last September, I voted for a bill in
    the Environment Committee that would ban the use of MTBE, while
    maintaining the clean air benefits that it has provided. My underground
    storage tank bill is independent from that effort because, even if we
    get MTBE out of the gasoline, we must still fix the tanks so that
    ordinary gasoline does not spoil our environment.
        I am looking forward to the testimony of our witnesses. I am very
    grateful that the town has been pro-active and willing to share its
    problems in order to promote solutions. It is a model for solving our
    problems, and I assure you that I will bring your experiences and
    advice back to Washington as we continue to find answers to these
    pressing questions. The Canob Park story in 1983 opened our eyes to the
    problem at the beginning, but the MTBE crisis in Pascoag has taught us
    that our work is not done.

        Senator Chafee. Now it's my great pleasure to introduce the
    senior Senator from Rhode Island, Senator Jack Reed.

      OPENING STATEMENT OF HON. JACK REED, U.S. SENATOR FROM THE
                         STATE OF RHODE ISLAND

        Senator Reed. Thank you very much, Senator Chafee. Let me
    commend you for holding this hearing and for your very
    proactive role on the Environment and Public Works Committee,
    not just with respect to this issue, but so many other issues
    that affect the environment in Rhode Island and the nation.
        The past few months have, obviously, been very difficult
    for the people of Pascoag. They have endured one of the most
    serious drinking water crises in the State's history. The good
    news, though, is that clean water is again flowing home to
    homes in Pascoag. The Pascoag and Harrisville Utility
    Districts, the EPA, and Rhode Island DEM are all to be
    commended for making funds available to install filtration
    systems, and, most importantly, to expedite the construction of
    new wells in Harrisville to bring clean water to Pascoag
    residents last month, but we have a lot more work to do, both
    to continue removing MTBE contamination here in Pascoag and to
    ensure that problems like this do not arise again.
        The legislation that Senator Chafee has offered will go a
    long way in improving the ability of Rhode Island and other
    States to inspect underground storage tanks and cleanup
    contaminated sites when leaking equipment allows contaminants
    like MTBE to enter our water supplies. I'm proud to be a
    cosponsor of this important legislation.
        Senator Chafee and I are also co-sponsors of legislation to
    phase-out the use of MTBE as a gasoline additive. While the
    clean air benefits of MTBE are significant, we know now that it
    poses an unacceptable risk to the water that our children
    drink--that all of us drink. We need to find better ways to
    protect air quality without jeopardizing our precious
    groundwater supplies.
        Understand the short- and long-term health impacts of
    exposure to MTBE is another critical part of our effort. I've
    asked the Federal Agency of Toxic Substances and Disease
    Registry to conduct a public health consultation to address
    concerns raised by many Pascoag residents who may have been
    exposed to contaminated water last summer.
        Representatives of the ATSDR will be in Pascoag next Monday
    and Tuesday to meet with the public.
        On Monday, March 4, from 7 p.m. to 9 p.m. at the
    Burrillville High School auditorium, the Agency will hold a
    public meeting to talk about health data they have collected so
    far and to give residents an opportunity to voice their
    concerns. To give Pascoag residents a chance to talk with
    Agency personnel in a more private setting, the Agency will
    also hold two public availability sessions, on Tuesday, March 5
    from 2 p.m. to 3:30 p.m. and 7 p.m. to 8:30 p.m., also at the
    Burrillville High School auditorium. I hope everyone will take
    advantage of these sessions with ATSDR public health experts,
    to get a clear picture of the extent of exposure to MTBE among
    Pascoag water users.
        Finally, I want to note that in addition to the
    contamination issues we're dealing with in public water systems
    like Pascoag's, we also face the problem of contaminants
    entering private wells throughout Rhode Island.
        I'm preparing legislation that will help States, like Rhode
    Island, cover the cost of private well testing in areas of
    suspected contamination, so that when problems arise, thousands
    of our citizens who drink water from their owns well will have
    some assurance that their families are not being exposed to
    dangerous chemicals.
        Again, let me thank Senator Chafee and also thank our
    Congressman Patrick Kennedy, who in the House of
    Representatives is one of the most persistent and most
    effective voices for environmental quality in this country.
    It's a pleasure to be with both of them this morning and to be
    with the people of Pascoag.
        Thank you, Senator Chafee.

    OPENING STATEMENT OF HON. PATRICK KENNEDY, U.S. REPRESENTATIVE
                     FROM THE STATE OF RHODE ISLAND

        Mr. Kennedy. Thank you, Senator Reed, and my good friend,
    Senator Chafee, for your good work.
        I just want to highlight, Senator Reed, your bringing up to
    Burrillville the experts in this area so that they can answer
    many of the questions that residents have in Burrillville about
    what the long-term impact of exposure to MTBE may be, what
    their health risks and what the signs behind this is, and I
    commend you, Senator Reed, for you working and your office
    working on making that available to the residents here in
    Burrillville, and I certainly support that effort.
        I also want to say that I support your effort, as with
    Senator Chafee, to make sure we get funding for testing of the
    private wells. I've met with many residents up here who are
    concerned, as you mentioned, about whether their private wells
    are contaminated. They want to be able to test their wells.
    They know they're in the areas that are often affected and they
    want to be able to get that testing done. The State needs the
    funds necessary to conduct that testing, and I think I can look
    forward to working with both you and Senator Chafee to try to
    provide the funds to our Director of Department of
    Environmental Management, Jan Reitsma, who is here today, so
    that we can have a statewide testing program for those wells
    that are in jeopardy of being contaminated.
        But, most importantly, finally, let me just say, I support
    what's already been said by Senator Chafee and by Senator Reed
    about the efforts in the Senate to phase-out MTBE and also to
    address the problem of leaking storage tanks.
        Senator Chafee has been a leader in the Congress, in the
    Senate on the area of brownfields, and his legislation was
    passed and signed by the President. That is an area that we all
    have a great deal more concern with now that we see the impact
    on a personal level up here in Burrillville to residents here
    in Pascoag being exposed to MTBE. Now they understand how
    important the legislation that Senator Chafee has introduced is
    to them, and I just want to say that I look forward to working
    with my colleagues in the House to introduce companion bills in
    the House that have been introduced by Senator Chafee and
    Senator Reed in the Senate. I look forward to working with my
    colleagues on the committees of jurisdiction, to make sure that
    they are co-sponsors, and, if need be, I look forward to
    sponsoring the legislation in the House.
        I hope that we get some discussion about these issues in
    the upcoming Congress because we know they're very important,
    to not only the people here in Pascoag but to people across the
    country who have faced this problem before.
        I hope we also get a chance to debate issues of
    International Free Trade. That had implications for us when
    looking to ban MTBE. I understand our State House is now
    considering banning MTBE from our gasoline here in Rhode
    Island. If they were to do that, as California has done, they
    would be subject to an international lawsuit by the company
    that manufactures MTBE up in Canada. The company would be able
    to sue the State, as it is currently taking action against
    California, as, by saying that it is a violation of their free
    trade provisions. In other words, it would be an imposition on
    them for being able to freely trade their product. It's
    incredible to me, I hope that you find it equally outrageous,
    that our current trade laws permit companies that manufacture
    this product, like the one in Canada, to continue to press
    their product on us, despite our own reservations and
    willingness to ban. It won't be banned under international law
    because of free trade provisions that require it to be sold. So
    that is an interesting question that we'll need to debate in
    the upcoming Congress. I certainly oppose the kind of fast-
    track efforts in trade that would allow these companies to
    usurp our own sovereignty here in Rhode Island and other places
    in our efforts to try to ban MTBE from our gasoline supply.
        But, finally, let me just say, I am pleased to see some
    residents here from the Pascoag District who contacted my
    office and who worked closely with me so that we can get money
    from our own State Resolving Fund for underground storage tank
    leakage and repairing those tanks.
        I also want to say that, for Steve and Cathy Knowlton, they
    were wonderful advocates. I had the chance to meet with them,
    as well as with Linda Monahan, Heather Covice, and Mike
    Wallace, who is one of your residents testifying about this
    situation.
        I visited the homes when they were contaminated. I sniffed
    the water. I went into the bathrooms when the showers were on
    and saw for myself how toxic this smell was. As someone who
    suffers from lung, pulmonary disorder and asthma, I certainly
    could appreciate the concerns that many had about breathing in
    the steam from this MTBE. I am very glad that you have such
    great active residents here in Pascoag, who had to really fight
    and fight hard to get your voices heard. I want to commend
    them, because it's the essence of what active citizen
    participation is all about, that they were able to knock down
    my door, knock down a few other doors and finally get the needs
    of the Pascoag residents met in terms of clean water supplies.
    So, to all of you who worked hard on that, I commend you for
    your good work, and I look forward to continuing to work with
    you in order to keep Pascoag's water clean and safe for all
    residents into the future. Thank you.
        Senator Chafee. Thank you, Senator Reed, thank you,
    Congressman Kennedy, for representing the good citizens of
    Pascoag on all their issues through the years. Before we go to
    the first panel, I would like to thank Ted Garille and the
    Pascoag's Water Utility District for their generosity in
    providing the facilities for this field hearing. Their work on
    this crisis has been a true service to this community, and I
    appreciate their hospitality this morning.
        I would also like to thank the local Boy Scout troop for
    lending us their speaker system today. I certainly appreciate
    their good deed.
        Our first panel consists of George Reilly and Michael
    Wallace, both of whom are Pascoag residents, and Jan Reitsma,
    director of the Rhode Island Department of Environmental
    Management. I'm happy to have you here. Mr. Reilly, our hero,
    and without your persistence, the ball wouldn't have started
    rolling here. It's an amazing story of how you went down to the
    Health Department, and I would like to hear your testimony.
    Let's start with you. Thank you.
        Mr. Reilly.

           STATEMENT OF GEORGE REILLY, RESIDENT, PASCOAG, RI

        Mr. Reilly. Basically, the problem arose sometime in the
    middle of June 2000, after a fire leveled two houses down the
    road. I noticed a funny taste and smell to the water we were
    receiving from the Pascoag Utility District, which I will call
    the PUD from here on in.
        At first I thought it could be chlorine and called the
    Water District and questioned them about the taste and odor.
    The Water Department told me that they had been putting
    chlorine in the water because they had drained something, I
    don't remember the words they used, due to the fire. This
    sounded reasonable to me, so I did nothing further at that
    time.
        About the middle of July, I became concerned because the
    smell and odor still remained, but now it seemed more chemical
    like and less like chlorine. At this point, I called PUD again
    and at this time they sent someone to test my water. When I
    called later for the results, I was told that the State
    laboratory had said that the water was fine. Then I did nothing
    further.
        By the end of August, I could not take the taste anymore
    and began using bottled water for cooking and drinking
    purposes. So I called PUD for the third time complaining about
    my water. Once again, I was told the water was free of any
    bacteria and the State said it was all right. I replied that
    the water may be free of whatever they were testing for, but if
    they believed it was all right, then they should come up and
    have a drink. I was told that would require another test. I
    don't know if it was ever tested again. I did know that I could
    not accept PUD's assessment of the water.
        Senator Chafee. Mr. Reilly, one of the people really
    interested in your testimony is in the back, I see some people
    cupping their ears. So, I'm sorry to interrupt you.
        Mr. Reilly. Since my wife said that she could not notice
    anything wrong with the water, I decided to ask some of my
    neighbors if they noticed anything strange with the water. The
    first person I talked to said he could not notice anything
    strange, but that his wife refused to even bathe in the water
    from PUD.
        At that point, I contacted a private laboratory and was
    told that it would cost me thousands of dollars to have the
    water tested, so I turned to the State of Rhode Island. I went
    to the Department of Health and requested the test of my tap
    water. What did I want to test it for, I was asked. I told
    them, if I knew what I wanted to have it tested for, I wouldn't
    have to have it tested, would I. The clerk handed me a yellow
    price list showing what it cost to do whatever test I wanted. I
    had no clue as to what I needed. The clerk, noticing my dismay,
    referred me to a rack of pamphlets nearby and told me to see if
    there was anything there that I might recognize as being the
    problem. When I read through a number of these pamphlets, the
    only thing that jumped out to me was the MTBE description. It
    said MTBE was an octane enhancer added to gasoline. My last
    recollection of the odor was that it smelled a little like the
    odor you get when riding behind some small pick-up trucks. So I
    told the clerk I wanted the basic test, which was $79, and a
    test for MTBE, which was a test for $115. He then called a
    chemist from the laboratory and she came down and handed me the
    materials that I would need to return to the lab to test my
    water. However, she said, I would have to wait for her call,
    since the tests were time critical and since her computer was
    down. This was a Monday or a Tuesday. She called on Thursday
    and told me to take my water samples and bring them down. I
    did. She told me I would hear within a few weeks of the result.
    I left. Before that afternoon was out she called and advised me
    not drink the water, nor bathe in it unless I had adequate
    ventilation in the shower. She also advised me that the PUD
    would be notified and that further testing would be required.
        On Friday, the further tests were taken and PUD was
    supposed to notify its customers by Saturday that they should
    not use the water for drinking or cooking. I only found out
    that the water was unsafe, officially, because my wife happened
    to see a sign in a store window.
        The MTBE problem existed for another 4\1/2\ months. I was
    reimbursed for my expense.
        In summary of this section, I believe the problem arose due
    to a lack of concern by the PUD--I later learned that they had
    received many calls, a lack of information as to what problems
    can arise in a water system and a lack of resources or
    resourcefulness by the PUD.
        Consequences of the problems:
        Health problems. Rashes, respiratory problems and
    psychological problems have all been reported.
        Business problems. Unable to meet the extra costs for
    water, at least one business closed. Restaurant and bakeries
    lost business due to resident fear of contaminated water.
        Financial problems. Many residents forced to travel in
    order to take baths and/or showers. Some had expensive wells
    drilled. I believe that the State is going to reimburse for
    extra expenses caused by the problem, but at that time no one
    knew that had happened.
        Weather problems. Being the fall and winter season, people
    heating with steam were under a great strain.
        Family problems. Relatives and friends afraid to visit or
    stay over. Fearful of contamination.
        Municipal problems. One village pitted against another over
    water.
        Problems addressed or not addressed:
        No immediate help from State. Governor offers coffee.
        Charitable contributions start arriving; 6 gallons of water
    per week.
        Citizens form action groups. Linda and Robert Monahan form
    a group to keep media and citizens aware.
        EPA sends grant. Governor confiscates it, except to buy a
    little more water.
        Underground Storage Tank Responsibility Fund used to buy
    temporary filters.
        Cindy Jette, Mary Ryan and others bring suit to have
    contaminated wells shut down.
        Judge orders shutdown and orders neighboring village to
    supply water.
        Some of the afterthoughts:
        Why was there such a lack of immediate response or concern
    by the PUD?
        Why did it seem like the PUD was only interested in keeping
    authority and employment instead of finding a solution to the
    problem?
        Why did the Governor treat the problem in such cavalier
    fashion?
        Why was there so little municipal involvement?
        Why did the Underground Fund wait to be asked if it could
    do something?
        Why can business, such as Potter's, had same type of
    problem in Warwick, not be subject to criminal negligence?
        Why is MTBE still being added to gasoline in Rhode Island?
    Is there some financial benefit?
        Why have not the concerned citizens, the doers, as
    mentioned above been given a hearty thank you?
        Mr. Kennedy. Thank you, Mr. Reilly.
        Senator Chafee. Thank you very much, Mr. Reilly, good
    questions for all us.
        Next is Mr. Michael Wallace. Welcome, Mr. Wallace.

          STATEMENT OF MICHAEL WALLACE, RESIDENT, PASCOAG, RI

        Mr. Wallace. Thank you. Everybody hear me OK? I have no
    written testimony, so I'm going off the top of my head here,
    having lived through this. I would like to thank Representative
    Kennedy, too, for the kind words a few moments ago.
        My name is Mike Wallace, father of five. I have lived here
    in Pascoag for the last 15 years. I am a registered nurse.
        One of my small children came home late September, said,
    ``Dad, there's gasoline in the water.'' Well, she is a little
    nuts, like the rest of us, so I didn't pay much attention to
    it. A few days later a newspaper article breaks out that our
    water is contaminated. I said, ``Oh, boy, what's going on
    now?''
        I recently read that the water here in Pascoag within the
    last year came in second nationwide for taste clarity and such.
    It was pretty good stuff coming out of the faucet. Now the joke
    was you couldn't smoke in the bathtub.
        Shortly thereafter, a standing room only meeting was held
    in the middle school. Questions could be answered and such by
    dignitaries and specialists in contamination of the water.
    Three or four hundred people were there. You could hear a pin
    drop as people on the stage described to us what was going on
    with the main water supply. They had an open microphone period
    after this and people were allowed to come up and voice their
    opinions. It was a daunting task to stand up in front of 400
    people--not too much what I'm doing here--and it was odd that
    no one had spoken together amongst themselves during the
    meeting. About 30 to 40 people spoke. They had plastic bags
    full of medication, photos of their dead and ill pets and
    domestic animals. They all had the same story--hair loss,
    memory loss, rashes, bronchitis, pneumonia, asthma.
        It was one of the very warm weeks of September. My wife and
    I both are nurses. We thought they were pretty strange
    symptoms, all the same people, all congregated down the hallway
    with 20, 30 or 40 similar stories.
        We all had talked among ourselves at CVS, at the local pubs
    and restaurants and pizza joints about how funny the water
    tasted. No one knew what was going on. No one had an answer,
    but we also had a thousand questions.
        So I turned to my wife then and said, I'm getting involved
    with this. Linda Monahan, a good friend of mine now, said she
    was going to picket the next day. She was going to try to close
    that Mobil Station. I guess we were having some trouble in
    court doing that. We've got to stop the flow of this poison. So
    for 8 hours the next day in the hot sun, with migraine
    headaches from the gasoline fumes, at 3:30 p.m. we closed that
    gasoline station, with a lot of support from the town.
        We formed an ad hoc committee and organized in the wee
    hours of the morning in Linda's kitchen. We said, ``We've got
    to fight this. We here in Pascoag feel that we've been wounded
    twice.''
        I know I'm surrounded by all these politicians and such and
    I'm feeling somewhat inhibited, but we felt we had been wounded
    twice, first by the contamination of the water and also by the
    inaction of politicians. It took a long time. I got a good look
    at political inaction, but I also got a very good look at
    inactive politicians. I very much appreciate what you're doing
    now, but I would like to have seen this meeting 150 days ago.
        We went 140 days without water. Take a small child, a baby
    needing to be bathed four, five, six, seven times a day. Sit
    down now in your chairs and see how you're going to do that
    with a gallon of water. People are petrified to use their tap.
        I'm a fairly healthy specimen, maybe a little too healthy,
    but somewhere in August I developed a pneumonia. It took 5
    weeks to clear, 20 days of antibiotics. Inhalers were laying
    around my house like crayons. My children, my son had pneumonia
    twice, bronchitis and asthma. When I take a shower, the kids go
    outside because of the coughing and gagging. It was a joke
    then, but it isn't a joke now. So, I'm not going to go on
    anymore. My voice is shaking, but there was a pall that
    descended over this community.
        A pall from which no light has really come yet. Too long--
    140 days without clean water coming from my tap. We never took
    it for granted. We've never forgotten it. We're quite angry
    over it. We're hoping with legislation like this, that not only
    do the tanks get protected and the stuff stops seeping from the
    tanks into the water, but also the little guy gets taken care
    of. No one was thinking of us. We asked for help and we got
    turned down. Not until we demonstrated on the steps of the
    State House, put our face in the cameras every 5 minutes, and
    thank God for the media, thank God for the newspapers and the
    press keeping this story alive, and the politicians that did
    get involved, but it was long in coming. We hope it never
    happens again. If anything, we can learn from our hindsight,
    that the little guy needs protection.
        We still need to know what can happen with the long-term
    health issues created by this problem here in Pascoag. We don't
    know what they are, but we do need someone to take a look at
    it.
        Thank you very much.
        Senator Chafee. Thank you.
        Next is the director of DEM, Jan Reitsma.

    STATEMENT OF JAN REITSMA, DIRECTOR, RHODE ISLAND DEPARTMENT OF
                ENVIRONMENTAL MANAGEMENT, PROVIDENCE, RI

        Mr. Reitsma. Thank you, Senator Chafee, Senator Reed and
    Congressman Kennedy for being here and for giving me the
    opportunity to testify on what I believe is very timely and
    important legislation, the Under Ground Storage Tank Compliance
    Act of 2001.
        I would like to recognize the leadership that you, Senator
    Chafee, have provided on this, as well as other interests,
    including the legislation on ground fields that was routinely
    successful, which will make a huge difference for our ability
    to clean up and redevelop ground field sites in the State.
        The legislation before us now is, in fact, timely and
    important because we are entering, I believe, a new phase in
    our tank program. After having worked for years on making sure
    that we have adequate corrosion, protection in place, and the
    1998 deadline of getting obsolete tanks out of the ground and
    otherwise upgraded, we're now looking at a new phase in which
    we need to make sure that the complexity of operating tanks
    properly is being overseen right and the funding is in place
    for the State as well as the tank operators to do the right
    thing. We believe that this legislation establishes much needed
    criteria and priorities for this new phase in the underground
    storage tank program.
        I also commend you for taking this location for your
    hearing here in the Village of Pascoag. We are at the epicenter
    of the most serious case of MTBE contamination in Rhode Island
    history. Serious release of gasoline occurred just down the
    street at a facility operating underground storage tanks, less
    than 1,700 feet from the sole source of drinking water. From
    Labor Day 2001 to this past January, 4,000 people endured the
    hardship of going without potable water and living with the
    anxiety of not knowing what was going on with their health.
    Through the hard work of many people and agencies at the local,
    State and Federal level, we were able to bring a line and
    replace their source of water, and I do think it's appropriate
    to recognize the very active citizen participation which drove
    a lot of the effort.
        I do want to take issue with some of the characterizations
    about the Governor in particular. He's not the kind of guy who
    thumps his chest, but he instructed us from the very first day,
    asked State agencies to get together and try to develop a
    strategy.
        I think what we have learned from this case is that there
    is, in fact, no quick, easy solution for a situation like this,
    but also that in this State, and probably in other States,
    we're really not set up very well to deal with these kinds of
    situations, and the other lesson is that responding to a
    situation is probably not the right solution. Prevention is
    what we need to focus on more and more, and that's what this
    legislation I think is focusing us on.
        Now, before I give you specific comments on the
    legislation, a little bit of background.
        We all know that underground storage tanks are used in a
    very widespread way, both in the State of Rhode Island and
    across the country. The majority is used for storage and
    distribution of fuels, including gasoline and diesel. In the
    little big State of Rhode Island alone, we have more than 3,300
    registered tanks located at 1,784 locations at last count.
        Senator Chafee, you've already given an overview of the
    Federal level history of regulation, starting in 1984, with the
    minimum requirements for tanks, later the addition of a trust
    fund to help with the response to releases from leaking tanks.
        The goal at the time was, as of 1988, to upgrade all of the
    underground storage tanks in the country in 10 years through a
    program to be implemented jointly by EPA and the States, and
    that has been a very successful partnership, in part we believe
    because under the partnership States had disbursed flexibility
    to implement the programs in ways that made sense to their
    particular situation, and the partnership has become a model
    for our Federal and State Government to work together to our
    common goal.
        I mentioned that flexibility because you will note that
    there is a theme in my comments.
        In Rhode Island, at the State level, our program also
    started in 1984, first as an extension of our water pollution
    program. Regulations defining operational and financial
    requirements were adopted in 1987. In 1994, the General
    Assembly also established a cleanup account, to be funded by a
    portion of the tax and gasoline sales, and this was meant to
    help the financial responsibility obligations of tank owners
    and operators in the State, and, finally, regulations
    establishing procedures to determine eligibility and provide
    for reimbursement were promulgated in 1997.
        More recently, with EPA and DEM, we joined with the Review
    Board for the Underground Storage Tank Financial Responsibility
    Fund, that cleanup account, and we've been effective, we can
    say. Since the beginning of our program, we have regulated
    almost 9,000 underground storage tanks holding petroleum
    products. Of that number, almost 7,000 or 80 percent have been
    permanently closed. The remaining universe of tanks have been
    largely upgraded to current standards, such that today 98
    percent of facilities with active tanks in Rhode Island meet
    regulatory standards for leak detection. Through all of this
    Federal assistance has been critical.
        Since 1985, EPA provided more than 3 million for our
    program, which was supplemented with fees collected for owners
    and operators of tanks.
        In terms of leaking tanks, Rhode Island, as you, Senator
    Chafee, noted has a dubious priority of providing live
    experience. We have, indeed, had a lot of experience with
    leaks. Pascoag was really only the most recent case. In the
    history that includes 1,489 confirmed releases. Fortunately, 75
    percent of that, or more than 1,100 cases, we've been
    successful with complete cleanup. One hundred and twelve sites
    are still being monitored to ensure that conditions continue to
    improve. At 369 sites, as of this date, still have corrective
    measures ongoing or still require such action. I provided more
    details in the written comments, and I will repeat them here,
    but I do want to know that our experience shows that impacts
    from leaking tanks are a concern that we understand is--that
    impacts from leaking tanks are not limited to drinking water or
    to drinking water supplies. Contamination has migrated from
    those drinking water supplies. The water supply is below, into
    utility lines, causing risks of explosion, as well as indoor
    air pollution, to the point that courthouse, businesses and
    residences have been evacuated in Rhode Island, and the
    associated costs have been astronomical.
        Since 1987, EPA has provided another $9.5 million in
    Federal funding to help us respond to leaks and to support our
    program.
        Since 1998, the Rhode Island Underground Storage Tank
    Responsibility Fund has reimbursed tank owners and operators
    for more than $21 million in expenses incurred responding to
    leaks at 155 facilities through the State. We cannot even begin
    to guess the cost incurred by businesses in responding to the
    spills.
        The specific comments of the legislation: My first comment
    is flexibility and the remaining comments are a variation of
    that same team.
        We strongly support what we see as the primary principle of
    the bill, which is to give States greater flexibility to
    implement the tank program, particularly by providing more
    flexibility in how we use the funds, but in particular our
    ability to do more proactive work on preventing leaks. That
    flexibility and proactive approach are very much needed, as we
    deal with the fact that releases from underground storage tanks
    continue to occur, notwithstanding the many improvements
    achieved to date in operating a leak detection system, and as
    we learn more about the complexity of operating tanks properly,
    as well as the complexity of responding to leaks.
        The second comment is on inspections, and, again, on
    flexibility. The bill calls for inspections every 2 years. At
    first, we were concerned we would not be able to meet that
    mandate, a concern that we understand is shared by other
    States. Limitations in terms of staffing and funding have
    restricted our ability to inspect tanks in Rhode Island to a
    frequency of only once every 6 or 7 years. Of course, we
    recognize that this is a unacceptable, and it is not providing
    the level of protection necessary, but we have not been able to
    build on our staff to a level that would allow more frequent
    inspections.
        We do believe, however, that it may be an effective
    alternative where we would allow qualified inspectors to
    conduct the checks and monitoring and to certify compliance
    subject to the State Audit Program that would consider
    priorities such as this to water supplies in sensitive natural
    areas.
        We urge you to make sure that the legislation will provide
    that kind of flexibility, in particular during the transition
    period so that States can develop innovative ways to meet the
    legislative goal.
        The third comment affects the training. We support the
    concept of better training for operators of underground storage
    tank systems. We also believe that EPA is, in fact, well suited
    to develop guidance, but we do know that guidance, again, must
    be flexible enough to allow States to develop innovative
    approaches.
        Descriptive requirements may have the unintended effect of
    stifling innovation, reducing our ability to respond to changes
    in technology and limiting programs to the lowest common
    denominator.
        We urge you again to make sure that States will have
    flexibility to tailor training programs to their specific needs
    as well as the needs of the stakeholders in their States.
        The fourth comment is on funding. We agree that EPA should
    distribute, at a minimum, 80 percent of the funds appropriated.
        It is our understanding, in fact, that on average EPA is
    already doing this, which we applaud. Given that most States
    are the primary implementers of this program, it is critical
    that we continue to receive these moneys to help us continue
    and expand our effort.
        We also welcome provisions that would explicitly allows us
    to use these funds for oversight and protection programs, areas
    that we have had problems in the past. Rhode Island supports,
    by the way, the allocation process EPA is critically using.
        Finally, we now can support the incentives that will be
    provided by awards up to $50,000 for innovative State operator
    training programs and State facility compliance strategies.
        Finally, and of most importance to this particular
    community, we strongly endorse the one-time appropriation of
    $200 million for remediation of MTBE contamination.
        Our experience in the Village of Pascoag and other cases
    has made one thing very clear, controlling and removing MTBE
    from the environment after early release is not a simple task.
    High solubility and rapid migration in Pascoag over 13 acres
    make conventional treatment, such as sump and treat and vapor
    extraction less effective. It is hard to bring high
    concentration, which in Pascoag leaves 1,800 parts per billion,
    down to the standard of 40 parts per billion. Treating large
    volumes, such as 200,000 gallons per day Pascoag to that lower
    level turned out to be much more costly than we estimated
    originally.
        Finally, we are finding that even 40 parts per billion
    level does not necessarily mean that the water is, in fact,
    drinkable, as odor and other problems may well persist.
        In short, all signs indicate that MTBE is going to be the
    major problem for UST and other State programs, it's going to
    be with us for a while, and the associated costs are going to
    be much higher than we may have thought.
        A significant appropriation like this is not only
    appropriate, but absolutely necessary.
        A quick comment on the MTBE ban versus a phase-out. I do
    think it's important that we make a distinction that we provide
    for a position. A ban could have all kinds of unintended
    consequences. I am a little bit less concerned about Canadian
    companies suing us, and I hope that some new law will be made,
    if necessary, in that regard, but there are other issues in
    terms of infrastructure and the cost that might result, but we
    truly support legislation phasing out MTBE as quickly as
    possible. We also very much support legislation that would fund
    the investigation into private wells, a program that we have
    had a very hard time building in Rhode Island, and we are sure
    the Department of Health would join in that initiative.
        Thank you, again, very much for coming down to the Village
    of Pascoag and providing this opportunity for comment.
        Senator Chafee. Thank you, director.
        Senator Reed. Thank you very much, Senator Chafee. Again, I
    would like to commend you for this important hearing. Thank
    you, Mr. Reilly and Mr. Wallace. Thank you so much for your
    testimony and, more importantly, thank you for your efforts
    together with your neighborhoods in Pascoag to reminding us of
    our obligations. One of the basic obligations is providing safe
    water for all of your citizens.
        I'm still concerned, particularly after listening to Mr.
    Wallace, about health effects, and that's why I'm pleased that
    we have the Federal Agency here on March 4th and 5th at the
    Burrillville High School to talk with these issues you raised.
        All of this I think goes back to the point that Mr. Reitsma
    made. I hope that this is not just about looking back and
    critiquing, but looking ahead and preventing. That raises a
    whole set of questions. I must apologize, because I have to go
    ahead with Representative Kennedy down to Raytheon. Are we
    organized in Rhode Island to get out if front of this issue in
    terms of both DEM and the Health Department, to ensure that we
    identify potential sources of contamination, particularly close
    to water supplies, and take a proactive role so that we don't
    rely again on citizens spending months and months and months
    with a problem that we're not aware of?
        Mr. Reitsma. Senator, unfortunately, I don't think we could
    honestly say that we're prepared to do the right thing. Yes,
    it's clear, as we have learned from this case, that we are not
    set up in Rhode Island either to respond very effectively or
    quickly to these kinds of situations or to effectively prevent
    them from occurring again, but we did learn from this
    particular case that that is what needs to be happening, and I
    think a lot of things need to occur for that to become
    possible. Certainly, the current State of the law is such that
    local communities or local districts have the legal
    responsibility to address this kind of a situation. Well, that
    may be the law on the books, but it's not the reality, and we
    need to deal with that. We need to work with the General
    Assembly, perhaps a redefinition of the State versus local
    responsibilities. Again, this legislation will be very
    important. It will provide additional funding for us to shift
    the two or more preventive approach and a proactive approach,
    so that we don't put all of our eggs in one basket and try to
    just improve the responses to leaks after they have occurred.
        Senator Reed. Thank you, Senator Chafee.
        Mr. Kennedy. I would like to join Senator Reed, but I do
    want to bring this issue up again about the phase-out, because
    right now California is being sued and the company is called
    Methanex. It's able to sue under Chapter 11 of our North
    Atlantic Pre-trade Agreement, NAPTA, and they brought their
    first suit against a community in California that had the
    similar problems that we had here in Pascoag and decided to
    phase it out. California has decided to do that, but under
    Chapter 11 of NAPTA the citizens of California could be
    liable--get this--could be liable for the investor loss that--
    the investors who have made investments into Methanex Next
    Company, they could have to--they might be liable to pay those
    investors for phasing-out MTBE from their gasoline, and that's
    currently permitted under a free trade agreement. So, that's
    not something that we could just pass a law and end, but it is
    something, that if we do take up fast track this year, which I
    expect the President will bring up, that we could correct this
    problem by amending Chapter 11 portion of our Free Trade
    Agreement. I hope and I look forward to working with my
    colleagues to do that, so that we can phase it out.
        Thank you, all of you for your testimony. I know many more
    of you have equally compelling stories about what it was like
    to wait and wait and wait for some action by your Government,
    and let me just say, thank you for your leadership. I'm so
    terribly sorry for what has happened to you and your families.
    It's clearly affected you in so many different ways, and I
    certainly hope that we can pass this legislation to prevent it
    from ever happening to anybody else. I also hope that we can
    get legislation passed that will help you be compensated in
    some small measure for the very practical financial loss that
    you have suffered. Certainly, there's no way we can reimburse
    you for any of the incredible psychological and physical losses
    that you've suffered as a result of this crisis. So, all we can
    say to you is that we hope to take from this experience
    something that will prevent anything like this from ever
    happening to anyone else.
        Thank you for your testimony, both of you, and for your
    actions, for your persistence. I'd now like to turn it back to
    Senator Chafee, and, once again, thank him for holding this
    hearing and thank him for the work he is doing on this
    legislation.
        Senator Chafee. Thank you, Congressman. I look forward to
    working with you on the companion legislation in the House.
        Mr. Kennedy. Sure.
        Senator Chafee. I'll give Mr. Reilly and Mr. Wallace one
    more chance to get the bug worked out. We do learn from it, but
    we can do better. Would you like to expound anymore, Mr.
    Reilly, on just your experience with the bureaucracy and your
    disappointment? We do learn from it, and I appreciate your
    testimony. That's why we're here.
        Mr. Reilly. Basically, no. I have nothing more to say.
    Again, we were disappointed, and I think we wished that things
    could have happened, but, as we said back in the beginning, as
    long as it looked like someone was starting to be concerned,
    starting to be involved and attempting to do something about
    the problem, that's all that we're looking for. I think, as you
    gentlemen have explained to me, you people are doing that, and
    from my point of view, that's all. Thank you very much.
        Senator Chafee. Mr. Wallace.
        Mr. Wallace. I agree with Mr. Reilly. We've had enough
    negativity here all these past months, so let that bubble over.
    It's just an old song now. The help is long in coming, we
    realize that. We can use that to help things in the future,
    too. So, let's move ahead, let's work together and let's look
    for that ray of hope over this dark cloud that's covered us for
    so long. It's such a relief to have clean freshwater coming out
    of your tap, something many of you here take for granted. You
    just cannot believe. We joked a few months ago that we couldn't
    drink it unless it came out of a bottle, and I'm on my second
    glass. But, thank you for your help.
        Mr. Kennedy. Well, I am on my first glass.
        Mr. Wallace. Thank you for your help and I look forward to
    working with many of you in the future. Thank you very much.
        Senator Chafee. Thank you very much.
        Mr. Reitsma, I would like to ask you about your experiences
    with the offender in this case, Potter Mobil, and just what it
    was like from the beginning to the end, in just dealing with a
    tank that does leak.
        Mr. Reitsma. Unfortunately, I can't provide you as many
    details you might be interested in because the case is still in
    the courts. As you probably know, Potter has gone into
    bankruptcy, which has forced us to proceed with the
    investigations and cleanup, essentially on our own, pending
    decisions by the Bankruptcy Court, to what extent they might be
    held responsible or not. That's not the first time we've been
    involved with Mr. Potter and his business. We've had other
    instances, as you well know. It's been frustrating, on the one
    hand, that people who clearly have involvement in the release
    of this fuel into the environment find a way not to take as
    much responsibility as we would like them to take. On the other
    hand, fortunately, in this case we have been able to proceed,
    and I know Terry Gray is here, the assistant director of DEM,
    who can give you a lot more information about how we deal with
    the cleanup aspects of this particular case, and I think that
    has been proceeding really well, because we all know across the
    country that experiences often that the responsible parties are
    either not around or plead poverty. That doesn't stop us. We
    are proceeding with the cleanup. It will take many years and
    many millions, or thousands being probably millions of dollars,
    but even though we don't have the responsibility party in the
    hot seat right now, we believe that we can achieve the cleanup,
    which, by the way, is very important. Some people have argued
    that we should just let the water supply go since there's no
    clean water from the Harrisville district. We believe, as part
    of the longer-term approach to these kinds of issues, that it's
    incredibly important to get redundancy in our water system, so
    cleaning up this water supply is an important goal for us and
    we believe we're making pretty decent progress given the
    circumstances.
        Senator Chafee. OK. Thank you very much, gentlemen, for
    your testimony. We'll take a short break while the next panel
    gets ready to come to the table. Thank you.
        [Recess.]
        Senator Chafee. Can we get on with the next panel. OK, the
    next panel consists of State Representative Scott Rabideau;
    Arthur DeBlois from the DB Companies representing the Society
    of Independent Gasoline Marketers of America and the National
    Association of Convenience Stores; and Jeff Kos, president of
    Environmental Council of Rhode Island. I'll let Scott start
    with our State Representative here.
        Scott Rabideau.

         STATEMENT OF HON. SCOTT RABIDEAU, RHODE ISLAND STATE
                    REPRESENTATIVE, HARRISVILLE, RI

        Mr. Rabideau. Thank you, Senator. I want to echo the
    sentiments of everybody else. Thank you for bringing this field
    hearing to Burrillville, to the Village of Pascoag.
        It's important for the citizens here to know that the
    elective leaders are working hard on this issue.
        I want to start my testimony with a little bit of history.
    Samuel Slater may have brought modern industry to New England
    and the State of Rhode Island, but from 1900 until 1960, the
    center of all textile industries in this country was right here
    in northern Rhode Island. When you understand how the villages
    in Rhode Island developed, you start to see where the water
    resources became important and you start to see why your
    legislation is so important. Our villages were centered around
    the rivers. The rivers are the areas where we have the greatest
    amount of water being stored subsurfacely. We have water called
    outwash deposits along the rivers. This is true not just in
    Rhode Island, but this is true throughout the northeast. I just
    had the opportunity of coming back from New Hampshire. I was in
    northern New Hampshire and kind of hoping Senator Smith might
    be here because I was going to talk about New Hampshire for
    him. I was in the towns of Colbrook, and there was another nice
    town up there, Lancaster. Those towns are located right along
    the Connecticut River, and when you're in those communities,
    like when you're in the communities of northern Rhode Island,
    you see gas stations right along the river. When you see the
    gas stations along these rivers, you also know that there are
    underground storage tanks. When the underground storage tanks
    have problems, what's happening is they're leaching out into
    aquifers, they're leaching out into soil deposits that contain
    the greatest amount of potable water for our citizenry.
        Your legislation to toughen the laws to improve the
    reporting requirements is so critical, because all of us here
    in New England have all of our storm villages and all of our
    commercial districts along rivers. It's just when they
    developed this portion of the country, it was the easiest way
    to build roads. You followed the rivers, and, unfortunately,
    the commercial development followed along the same paths, and
    now we're faced with our commercial areas being located over
    the most important water resources we have.
        You know, we are in a drought condition right now, and I've
    been telling people, whether or not this will come true, I hope
    it doesn't, I believe the Providence water supply is down
    somewhere in the range of 50 to 60 percent. If we don't get our
    spring rains, you're going to see the need for conservation
    throughout the State of Rhode Island this summer. Every time
    something like that happens, you know, it's one thing to happen
    to 4,000 people in the northwest corner of the State of Rhode
    Island in the Village of Pascoag, but when you see the
    restrictions start taking place throughout this State and
    throughout New England, your job is going to become harder,
    your calls are going to become more numerous and you're going
    to have to explain to them the importance of conservation and
    the importance of bills like this, the importance of protecting
    the resource area.
        MTBE, the additive that caused the problem here in Pascoag,
    has just exacerbated the situation. It is one thing to have a
    gasoline spill with all the nasty chemicals that are in
    gasoline, but when they add an MTBE, a soluble component, a
    water soluble component, the result was that it will travel
    faster through the aquifers, through the soils.
        If we don't have more stringent regulation of underground
    storage tanks, if we don't have the Federal Government
    allocating 80 percent of the money to the States, if we don't
    allow the States the flexibility to use that money, the States
    will be in a very difficult situation, and flexibility. I know
    Director Reitsma has left, but the flexibility issue that he
    talked about is very critical here.
        When we had our crisis here in Pascoag, it was the ability
    of our DEM to allocate some of the UST, or the Underground
    Storage Tank, money to the cleanup and to the connection with
    Harrisville, because the connection with Harrisville didn't
    really fit the mold. Somehow, we were able to manipulate the
    system, which is what good politicians do, but somehow, we were
    able to manipulate that system so that the connection with
    Harrisville was brought into the fold and some of the money
    could be allocated toward that.
        I believe your bill allows that flexibility. I believe your
    bill calls for 80 percent of the money being distributed to the
    States, and I would hope that your committee hears this
    testimony and that your committee takes it seriously and pushes
    it onto the full Senate floor, because I always look at New
    England and I say, New England has 12 percent of the Senators
    in the U.S. Senate. That's a big voting block where I come
    from, and that voting block should be speaking with one unified
    voice on this issue, because it is a more prevalent problem
    here in the developed northeast. We have much greater
    concentrations of business and industry located over our most
    variable water resource supplies. So I hope that they hear the
    voices of the people here in Pascoag today and I hope that they
    do the right thing and then push this legislation on.
        I thank you again.
        Senator Chafee. Thank you, Representative, very much for
    your testimony. In your real life job, you are a biologist, and
    I understand this, and you're absolutely right, if you go west,
    the past experiences is not a drop of water, not a green blade
    of grass to be seen in Rhode Island, with the ponds, river and
    streams everywhere, so it's much more an issue here, although
    there have been MTBE spills all around the country, but in much
    more worse in New England when it does occur.
        The next testimony is Mr. Art DeBlois. He runs the DB
    stores and gas stations and he has to deal with the individuals
    that monitor the tanks, and we very much welcome your testimony
    here, Mr. DeBlois.

     STATEMENT OF ARTHUR J. DeBLOIS III, DB COMPANIES, PAWTUCKET,
    RI, ON BEHALF OF THE SOCIETY OF INDEPENDENT GASOLINE MARKETERS
     OF AMERICA AND THE NATIONAL ASSOCIATION OF CONVENIENCE STORES

        Mr. DeBlois. Thank you, Senator Chafee. Good morning. My
    name is Arthur J. DeBlois. I'm the president and CEO of DB
    Companies, an independent motor fuels operator headquarters
    here in Providence. DB Companies owns and operates 86 DB Mart
    stores in Rhode Island, Massachusetts, Connecticut and in
    Hudson Valley, New York. In addition, we have 84 franchise
    operation locations.
        I want to thank you for inviting me to testify today on
    issues related to UST, that is underground storage tanks, your
    bill S. 1850, the Underground Storage Tank Compliance Act of
    2001.
        I'm here representing the Society of Independent Gasoline
    Marketers of America and the National Association of
    Convenience Stores as well. SIGMA is a national trade
    association of approximately 260 independent motor fuel
    marketing operators in all 50 States. Our members supply over
    28,000 motor fuel outlets and sell about 48 billion gallons of
    gasolines and diesel annually. Approximately 30 percent of all
    motor fuel sold in the nation are sold through our outlets.
    NACS is a national trade association with more than 2,300
    companies operating over 104,000 convenience stores nationwide
    and employing about 1.4 million employees. NACS members sell
    about 115 billion gallons of motor fuel annually.
        First, let me state that SIGMA and NACS applaud you for
    holding this UST hearing today in Pascoag and for your
    leadership on this issue.
        For today's hearings, the Association would like to send a
    clear and strong message to the residents of Pascoag.
    Responsible petroleum marketers have zero tolerance for the
    kind of release that has contaminated your drinking water
    supply. We're sorry for the inconvenience you've had to endure
    these many months. At the same time, we have been very
    longstanding and vocal advocates of vigorous enforcement of
    Federal and State UST regulations.
        Further, S. 1850 takes additional steps to strengthen UST
    enforcement and provide more funds to address situations like
    the one that has occurred here in northwest Rhode Island.
        As the Senator reminded us earlier, Rhode Island has played
    an interesting and key role in the history of UST regulations.
    The 60 Minutes show introduced to over 30 million viewers to
    the problems of leaking tanks. The narrator, Harry Reasoner,
    detailed the serious groundwater contamination problems at
    Canob Park, a 9-acre development in Richmond, RI, resulting
    from tank leaks. The CBS news stories were some of the
    catalysts that led to the enactment of the Federal Tank Law in
    1984.
        Much has been done in the last 18 years since that law was
    passed to prevent, detect and cleanup UST releases. Rather than
    having history repeat itself, SIGMA and NACS hope that the
    problems faced today by the residents of Pascoag will lead to
    prompt action by Congress to improve the current UST program by
    enhancing the abilities of States to enforce and address tank
    leaks and spills by expanding their allowable uses of the
    annual congressional appropriation from the Federal Leaking
    Underground Storage, or LUST fund, as it's known.
        As you know, your bill includes over $460 million in new
    authorizations from the nearly $2 billion and growing Federal
    LUST fund.
        I would like to make some connections between the situation
    here in Pascoag and your Bill S. 1850. That is, how the
    enactment of this bill will help to mitigate future Pascoags
    from occurring? Again, I cannot over-emphasize this point. NACS
    and SIGMA members do not condone the actions of the suspected
    UST operator, either before or after the leak was detected.
        Last May, the GAO study, which the Senator referred to,
    ``improved inspections and enforcement with better, safe
    underground storage tanks.'' That GAO study concluded in part
    that the EPA and States have failed to enforce consistently UST
    requirements. GAO estimated that nearly 3 years after EPA's
    deadline, the 10-year phase-in for environmentally protective
    tanks, only 89 percent of those regulated USTs have been
    replaced, upgraded or closed. GAO identifies State and local
    governmental agencies and very small businesses as the primary
    category of UST owners and operators who remain in non-
    compliance. GAO also indicated that rates of ongoing UST leak
    detection and compliance are lower than expected.
        In this report, GAO recommended that the Congress could
    take several steps to address these identified inconsistencies
    from the existing UST program.
        NACS and SIGMA support and continue to support these
    measures from GAO's recommendation and that you have included
    in S. 1850.
        No. 1, authorize the use of LUST fund trust moneys by the
    States for UST enforcement.
        No. 2, remove restrictions on the use of the LUST trust
    fund moneys by State UST funds. Permitting cleanup resources to
    be deployed more quickly, thereby minimizing cleanup costs and
    the environmental harm caused by a tank leak.
        No. 3, provide additional funds for use by the States in
    addressing high priority releases, such as those containing
    MTBE, which occurred here in Pascoag.
        No. 4, create a national UST data base to track, upgrade
    and close USTs.
        Some people here may wonder why the petroleum market
    supports more infective enforcement of UST regulations. Let me
    explain our position.
        First, small inventory losses can become huge financial
    losses to a petroleum marketer, given the slim margins that we
    operate on due to competition.
        Second, since EPA promulgated its UST requirements in 1988,
    SIGMA and NACS members have spent hundreds of millions of
    dollars complying with tank standards. My company alone has
    spent over $5 million upgrading our USTs to meet the current
    regulations.
        Further, many people, some of the large operators as well
    as some of the small two- and three-store operators, actually
    closed their locations in order to meet those compliance
    standards.
        I testified many years ago at a hearing held by the late
    Senator John Chafee, that with a 10-year phase-in requirement,
    as the current UST regulations had, there was absolutely no
    reason why any UST owner and operator should not be in
    compliance.
        Accordingly, NACS and SIGMA support the key elements of
    your bill; mainly, expanding allowable uses for LUST trust fund
    moneys, requiring every UST to be inspected at regular
    intervals, directing EPA to publish guidelines and training the
    operators in the proper operation of maintenance of USTs and
    requiring EPA and States to publish strategies for ensuring
    compliance for USTs owned by governmental agencies at every
    level of government and providing the additional funding for
    the remediation of certain high priority MTBE releases.
        There is one provision in S. 1850 that SIGMA and NACS would
    like to change. As introduced, your bill limits the use of the
    Federal LUST trust fund moneys by State UST reimbursement
    funds, like the ones we have here in Rhode Island, where the
    UST owner or operator could face financial hardships but for
    reimbursement. This provision, we believe, encourages non-
    compliance by UST owners and operators. We believe that the
    elimination of this limitation will provide the State UST fund
    with more flexibility and would leverage those limited tank
    remediation funds to provide for quicker cleanup.
    Notwithstanding the experiences the residents of Pascoag, most
    UST cleanups are managed by responsible parties, that is the
    tank owners and operators and overseen by the State U.S.
    implementing agencies, such as DEM. The UST Corrective Action
    Program largely has worked extremely well. As Mr. Reitsma
    pointed out in his testimony, over $21 million from a the Rhode
    Island State UST Fund has been expended to help cleanups, and
    those cleanups have gone extremely well. State UST
    reimbursement funds on a national basis, have expended over $5
    billion in UST cleanup. According to State data, most of the
    State UST reimbursement funds are solid, although some of these
    funds are paying claims at a much faster rate than the revenue
    they receive. A growing concern of our members is that some
    State legislators, increasingly strapped for cash, might borrow
    or raid cash balances in these State UST assurance funds. This
    occurred here in Rhode Island during the State's last budget
    crunch in the early 1990's. Crash flow, therefore, remains
    critical to the success of the State UST reimbursement funds,
    and allowing the State to use some of its LUST fund trust
    moneys from EPA for its UST reimbursement fund is one way to
    leverage limited resources.
        There is also a misconception that eliminating this
    limitation means the major oil companies are going to get a
    windfall. In all honesty, the major oil companies are one of
    the first groups of people to fully upgrade their tanks. In
    fact, removing the limitation would benefit Rhode Island's
    funds and its citizens. The funds here have worked well despite
    the severe funding limitations. In fact, according to State
    data, from late 2000 through the middle of last year, Rhode
    Island governmental entities placed a tremendous strain on the
    fund with 11 governmental sites consuming close to 48 percent
    of the balances. Yet, government entities don't pay into the
    fund because they are a tax exempt organization. Therefore,
    additional moneys from the LUST trust fund will be a boost to
    Rhode Island's UST fund. UST owners and operators are much more
    likely to complete tank cleanup if they know that, after they
    pay the required amount, the State UST assurance fund will
    timely reimburse their cleanup expenses. To state it
    differently, reimbursement will become stretched out over a
    long time, a UST owner or operator has an incentive to slow
    down the pace of its cleanup. Thus, limiting the use of those
    LUST fund moneys to State reimbursement funds will do nothing
    to help them clean things up more quickly.
        SIGMA and NACS also feels that removing the limitation will
    assist with the cleanup of high priority releases, such as the
    one in Pascoag here containing MTBE.
        As a final point, I would like to note SIGMA and NACS
    frustration level with the level of LUST fund appropriations.
    In many instances, the per gallon excise tax that funds the
    LUST fund is not passed on to the consumer by the marketer.
    It's our cost of doing business. However, the Federal LUST
    trust fund is now approaching an unobligated balance of $2
    billion and growing. The current appropriation level is less
    than the annual interest in the fund, not including the ongoing
    tax burden collections that are increasing it further. The
    Government has and continues to collect this fund. S. 1850,
    your bill, recognizes this fact and authorizes a substantial
    increase in funding.
        The Association hopes that the key elements of your bill
    will be enacted, and I will urge Senator Reed, once this
    legislation is passed, to push hard in the Appropriations
    Committee to get this increased funding level. It will do a
    wealth of good for the State UST funds.
        SIGMA and NACS appreciate this opportunity to present their
    views on USTs and S. 1850. The Association again regrets that
    Pascoag is the backdrop to this hearing and that the residents
    have been inconvenienced from the release that occurred. We
    look forward to working with you and members of the Senate and
    Environmental and Public Works Committee on these UST
    regulations. Thank you. I will be happy to answer any
    questions.
        Senator Chafee. Thank you, Mr. DeBlois, very much. It's
    always been the situation where you have 89 percent, in this
    case responsible operators, and 11 percent that haven't
    complied. After 10 years, it's plenty of time to get into
    compliance, and we are still 11 percent shy, and that's what
    we're trying to fix with this legislation, to make sure after
    10 years that we get everybody in compliance, as well as look
    as to how we can better improve the existing legislation,
    including a release the trust fund money, that everybody pays
    into a tenth of a percent tax that now is, as you said,
    fortunately, $2 million. We're getting into that money back
    national communities, as you do that.
        Our next testimony is from Mr. Jeff Kos, president of the
    Environmental Council of Rhode Island.

      STATEMENT OF JEFF KOS, PRESIDENT, ENVIRONMENTAL COUNCIL OF
                      RHODE ISLAND, PROVIDENCE, RI

        Mr. Kos. Thank you, Senator. I am Jeff Kos, president of
    the Environmental Council of Rhode Island. I, too, would like
    to thank Senator Chafee and the Senate Committee on Environment
    and Public Works for this field hearing and participation of
    Senator Reed and Congressman Kennedy. It's very, very important
    for you to come here to Pascoag to meet with interested parties
    in the area so that they have a chance to attend this hearing,
    and as well as those of us who are involved in various parts of
    this problem.
        We have a number of our members, of our 55-member
    organizations who have been involved and continue to be
    involved in pieces of this issue, and we will go through a few
    of those as we go along.
        I just wanted to take a moment to thank those residents who
    have given testimony today and those others who have sent in
    written testimony that we've been in touch with. It's very
    important for all of us to hear the human costs and the quality
    of life costs and their experiences here, so that you can learn
    from them and develop together the policies that will ensure
    that this doesn't happen again. As far as that's concerned, I
    would like to thank Senator Chafee for S. 1850. We believe it
    is a great step forward in dealing with underground storage
    tank issues. As Director Reitsma of the State DEM rightly
    pointed out, the flexibility and training components of this
    bill will have an enormous impact in preventing incidents of
    this in the future. So we do strongly support it. We have some
    concerns and have had some concerns about how all of these
    issues come together, and now it's been said in sort of a
    cliche, that a success has many fathers and that failure is an
    orphan, but in this case this failure has brought forward a lot
    of people who are willing to take responsibility for pieces of
    this problem and have worked together to solve these problems.
        One of the issues that has come up that we have noticed, we
    have members on the Underground Storage Tank Board for the
    State of Rhode Island that have been problems related to
    disbursement of money over the years. Some concerns about
    third-party liability of the swiftness of taking care of those
    issues. I hope we keep those in mind as we go forward. I would
    like to thank Eugenia Marks for their service on that board. In
    general, they have made a lot of progress and have done a lot
    of work in dealing with these underground storage tank leaks
    and compensations over the years, but there are some gaps that
    need to be addressed and our followup written testimony will
    deal with some of that.
        We also note that a number of agencies have been dealing
    with ripple effects from this spill. The Water Resources Board
    is re-examining its policies related to these issues, and,
    hopefully, we'll have some positive input on this. We have
    heard from DEM today. At the Attorney General's office there
    are several people working on MTBE-related language, and I was
    very happy to hear about Senator Reed supporting and
    introducing legislation on the phase-out, and I can't
    underscore the importance of the language of that phase-out and
    how it relates to Rhode Island's energy supply.
        There are a number of bills in our State Legislator
    regarding elimination or phase-out of MTBE, and I think it
    makes sense for the Federal level to look at that level and to
    deal with it in a way that doesn't saddle us with other
    unintended consequences for phasing out MTBE, so I would like
    to thank the Attorney General's office who are working on that.
        There are also a number of other areas that have been noted
    by our members related to the MTBE. Brown University's
    Environmental Studies Department is working on a study of the
    major oil company agreements, franchise and contract agreements
    related to liability of the, not just the franchisee, but the
    company itself, and can those agreements be typed up to include
    and provide for large oil companies having some sort of
    responsibility for spills like this in these communities and
    for franchisees or other contract operators like Potter Mobil
    to be more responsible. So, we are awaiting the results of that
    study and we will certainly pass that along to the committee
    when it's available.
        I would like to also respond just briefly. I'm very happy
    to hear some of the responses and comments from Mr. DeBlois,
    and we certainly agree that responsible operators deserve as
    much consideration and flexibility as possible. Unfortunately,
    we do have a few irresponsible operators out there, and this
    area certainly has been impacted by irresponsible operators.
    We're very concerned in this case. One wonders if anything can
    be done as far as regulation of some of these operators. Our
    members are concerned that Potter Mobil and others can hide
    behind a series of companies and prevent the collection of
    moneys related to clean up. One member has referred to it as
    the sort of Enron of local operators. It is an unfortunate
    situation and there should be ways in which we can get at these
    problems so that they're not hiding behind a series of dummy
    corporations and that there's some financial responsibility to
    operators who are irresponsible, and, granted, they are the
    minority. As far as the issues, there are other issues, of
    course, it's interrelated to our continued dependence on fossil
    fuels. A number of our member organizations are working to
    promote alternative fuels and tax credits for other use of
    fuels, and our current energy uses are costly at a number of
    levels. This incident just points out another level of personal
    health and quality of life costs that we all pay for when our
    current fossil fuel distributions and other services go wrong.
    So I did want to thank Congressman Kennedy for bringing up some
    of the other aspects, the international trade aspects of this
    issue, but there are also other costs related to that. We need
    to keep in mind that the Senators and others making policy, at
    all levels, keep in mind that maybe we need to move in other
    directions that are more protected of our economy and our
    ecology.
        Again, it was mentioned as far as no more--mitigation was
    the word that Mr. DeBlois used on future Pascoag situations. I
    would hope that it is the wish and desire of all of our members
    that there be no more Pascoags and that it won't be a
    mitigation issue. It's something that we together would be able
    to prevent in the future, and I think your efforts, Senator
    Chafee and others on the committee and others in our delegation
    and at all levels in Rhode Island will ensure that there are no
    more Pascoags. Thank you.
        Senator Chafee. Thank you very much, Mr. Kos, and I just
    add that, one important part of this bill is that it would
    prohibit delivery of fuel to a noncompliant tenant. As I said
    earlier, certainly that's a great stake to have, to finally
    give EPA the ability of stop delivery of fuel to noncompliant
    and put the offenders out of business once and for all.
        I just have a couple of questions for Mr. DeBlois. You talk
    about how your employees now do deal with tanks that--the alarm
    system that they might have, any training they may have or
    monitoring. As you said, losing inventory is very damaging for
    some operating on a thin margin. If your inventory is leaking
    into the groundwater, leaking anywhere, you're losing inventory
    and you're losing money. How do you monitor that? Any comment
    on those questions?
        Mr. DeBlois. Sure. One of the things that we support in the
    bill is your requirement in the bill that all operators of
    underground storage tanks, whether they operate single unit, be
    a government or be a business or a chain operator like
    ourselves, that they have a training program in place for all
    of their employees.
        For instance, at our company a sales associate, which is
    basically the entry level employee, comes in, he or she must go
    through a 4-week training before they are allowed to operate on
    their own in the store. As part of that training program, one
    of the things that they must learn to do is understand what the
    in tank leak monitor means, how to operate that monitor, and
    if, in fact, one of those alarms goes off, what to do. As an
    example of what a training program like that can do, and this
    is a sad situation, at one of our own facilities in Connecticut
    2 weeks ago, an elderly gentleman had a medical problem and
    came through a stop sign across the street from our location,
    up onto our facility, hit a car being fueled up by a young
    woman, knocked the car into the gasoline pump and a small
    explosion ensued because of the amount of gasoline in the
    tank's car that was being filled up.
        Our operator, by immediately hitting the stop button,
    stopped all gasoline from flowing and thereby averted a major
    catastrophe. We need to have that type of an operation. That
    training is very, very necessary, because those things don't
    happen when the manager is there at 2 o'clock in the afternoon.
    This happened at 9:30 at night. There was a single operator on
    operating the facility, he was an immigrant, yet, he
    immediately responded, did exactly what he had been trained to
    do and averted a catastrophic situation. So, the training
    component is very important and is needed by everybody. The
    larger responsible companies typically have those training
    programs already in place, and that's why we support making
    them required for everybody. It will be a good thing for the
    industry.
        Senator Chafee. Of course, taking the 4-weeks of training,
    an employee also has a cost component and you just want a level
    playing field, make sure everybody is doing what you're doing,
    and that's also what this will require, that kind of training.
        So, I appreciate very much your testimony. Scott Rabideau,
    thank you for your work over the field call in the General
    Assembly, and we look forward to trying to work with you on
    legislation down in Washington, and thank you for your
    testimony.
        I'll also note that we referred several times to the GAO
    report. Once again, I'll say that it's very worthwhile to read,
    on the back table, the GAO report, which was commissioned last
    spring and gives a wealth of information on what we can do to
    prevent spills in the future. I'll also mention that Cameron
    Taylor from the Environment and Public Works Committee
    represent Senator James Jeffords is here, and Karen Heckleman
    from the Environment and Public Works Committee representing
    Senator Bob Smith in New Hampshire. Thank you. If you have any
    questions or testimony and you are not able to get to me,
    certainly Cameron and Karen are here to help, also.
        Thank you for your participation this morning, and I look
    forward to working with you in the weeks and days ahead. Thank
    you. The meeting is adjourned.
        [Whereupon, at 11:31 a.m., the committee was adjourned, to
    reconvene at the call of the chair.]
        [Additional statements submitted for the record follow.]

              Statement of George E. Reilly, Resident, Pascoag, RI

                                 PROBLEM ARISES

        Sometime in the middle of June 2001, after a fire leveled two
    houses down the road, I noticed a funny taste and smell to the water we
    were receiving from the Pascoag Utility District (PUD). At first I
    thought it to be Chlorine and called the water district to question
    them about the taste and odor. The water department told me that they
    had been putting chlorine in the water because they had drained
    something (I don't remember the word they used) due to the fire. This
    sounded reasonable to me and so I did nothing further at that time.
        About the middle of July I became concerned because the smell and
    odor still remained, but now it seemed more chemical-like and less like
    chlorine. At this point I called PUD again and this time they sent
    someone to test my water. When I called later for the test results, I
    was told that the State laboratory had said that the water was fine.
    Again I did nothing further.
        By the end of August, I could not take the taste anymore and began
    using bottled water for cooking and drinking purposes. So I called PUD
    for the third time complaining about my water. Once again, I was told
    that the water was free of any bacteria and the State said it was all
    right. I replied that the water may be free of whatever they were
    testing for, but if they believed it was all right, then they should
    come up and have a drink. I was told it would require another test. I
    don't know if it was ever tested again. I did know that I could not
    accept PUD's assessment of the water.
        Since my wife said that she could not notice anything wrong with
    the water, I decided to ask some of my neighbors if they noticed
    anything strange with the water. The first person I talked to said he
    could not notice anything strange but that his wife refused to even
    bathe in the water from PUD.
        At that point I contacted a private laboratory and was told that it
    could cost me thousands of dollars to have the water tested, so I
    turned to the State of Rhode Island. I went to the Department of Health
    and requested a test of my tap water. What did I want it tested for I
    was asked. I responded that if I knew what I wanted it tested for, I
    wouldn't have to have it tested would I. The clerk handed me a yellow
    price list showing what it cost for whatever test I wanted. I had no
    clue as to what I needed. The clerk, noticing my dismay, referred me to
    a rack of pamphlets nearby and told me to see if there was anything
    there that I might recognize as being the problem. When I read through
    a number of these pamphlets the only thing that jumped out to me was
    the MTBE description. It said MTBE was an octane enhancer added to
    gasoline. My last recollection of the odor was that it smelled a little
    like the odor you get when riding behind some small pickup trucks, so I
    told the clerk I wanted the basic test ($79.00) and the test for MTBE
    ($115.00). He then called a chemist from the laboratory and she came
    down and handed me the materials that I would need to return to the lab
    to test my water. However, she said, I would have to wait for her call
    since the tests were time-critical and since her computer was down.
    This was on a Monday or a Tuesday. She called on Thursday and told me
    to take my water samples and bring them down. I did. She told me I
    would hear within a few weeks of the result. I left. Before that
    afternoon was out, she called and advised me not to drink the water;
    nor bathe in it unless I had adequate ventilation in the shower.
        She also advised me that the PUD would be notified and that a
    further testing would be required. On Friday the further tests were
    taken and PUD was supposed to notify its customers by Saturday that
    they should not use the water for drinking or cooking. I only found out
    that the water was unsafe (officially) because my wife happened to see
    a sign in a store window. The MTBE problem existed for another four and
    one-half months. I was reimbursed for my expense.
        In summary of this section, I believe the problem arose due to: a
    lack of concern by the PUD (I later learned they had received many
    calls.), a lack of information as to what problems can arise in a water
    system, and a lack of resources/resourcefulness by the PUD.

                             PROBLEM'S CONSEQUENCES

        Health problems.--Rashes, respiratory problems and psychological
    problems have all been reported.
        Business problems.--Unable to meet the extra costs for water, at
    least one business closed. Restaurant and bakeries lost business due to
    resident fear of contaminated water.
        Financial problems.--Many residents forced to travel in order to
    take baths and/or showers. Some had expensive wells drilled. (I believe
    that the State is going to reimburse for extra expense caused by the
    problem, but at the time, no one knew it.)
        Weather problems.--Being the fall and winter season, people heating
    with steam were under a great strain.
        Family problems.--Relatives and friends afraid to visit or stay
    over. (Fearful of contamination) Municipal problems. One village pitted
    against another over water.

                        PROBLEM ADDRESSED/NOT ADDRESSED

        No immediate help from State. Governor offers coffee.
        Charitable contributions start arriving (6 gallons of water per
    week)
        Citizens form action groups. Linda and Robert Monahan form group to
    keep media and citizens aware.
        EPA sends grant. Governor confiscates it. (except to buy a little
    more water).
        Underground Storage Tank Financial Responsibility Fund used to buy
    temporary filters.
        Cindy Jette, Mary Ryan and others bring suit to have contaminated
    wells shut down.
        Judge orders shutdown and orders neighboring village to supply
    water.

                                 AFTERTHOUGHTS

        Why was there such a lack of immediate response or concern by the
    PUD?
        Why did it seem like the PUD was only interested in keeping
    authority and employment instead of finding a solution to the problem?
        Why did the Governor treat the problem in such cavalier fashion?
        Why was there so little municipal involvement?
        Why did the Underground Fund wait to be asked if it could do
    something?
        Why can businesses such as Potter's (had same type of problem in
    Warwick) not be subject to criminal negligence?
        Why is MTBE still being added to gasoline in Rhode Island? (Some
    financial benefit?)
        Why have not the concerned citizens (the doers) as mentioned above
    been given a hearty thank you?

                                   __________
       Statement of Jan H. Reitsma, Director, Rhode Island Department of
                            Environmental Management

                                  INTRODUCTION

        Good Morning. My name is Jan Reitsma and I am the Director of the
    Rhode Island Department of Environmental Management. Thank you for the
    opportunity to testify this morning on Senate bill 1850, the
    Underground Storage Tank Compliance Act of 2001. I would like to begin
    by recognizing Senator Chafee's leadership in drafting and introducing
    this legislation. After the many tank closures and upgrades associated
    with the December 1998 deadline for corrosion protection, we have
    entered a new era in operation and regulation of underground tanks.
    This legislation establishes the criteria and sets the priorities for
    the next generation of tanks program.
        The site of this hearing is also very appropriate. As we all
    probably know, Pascoag is the site of the most serious case of
    contamination by methyl tertiary-butyl ether, or MTBE, in Rhode Island
    history. The investigation of that contamination uncovered a serious
    release of gasoline at a facility operating underground storage tanks
    less than 1700 feet from the sole source of drinking water for the
    Village of Pascoag. From September of 2001 to January 2002, this
    village endured the hardships of going without potable water and lived
    with the anxieties that the health of their families was at risk.
    Through the hard work of many, many people and various government
    agencies at the local, state, and Federal level, a replacement source
    of water was developed. That battle was won, but the war is far from
    over. The high levels of MTBE remaining in the aquifer and widespread
    migration of that contamination into the community will take years and
    hundreds of thousands, if not millions, of dollars to clean up.

                               PROGRAM BACKGROUND

        The use of underground storage tanks is widespread in Rhode Island
    and across the country. The majority of underground storage tanks are
    used for the storage and distribution of fuels, including gasoline and
    diesel fuel. In Rhode Island, there are currently approximately 3,318
    registered tanks located at 1,784 locations.
        In 1984, the U.S. Congress recognized the need to properly operate
    and maintain underground tanks and added Subtitle I to the Resource
    Conservation and Recovery Act. In 1986, Congress acknowledged the need
    to respond to releases from USTs and amended RCRA to establish the
    leaking underground storage tank trust fund. The Environmental
    Protection Agency promulgated regulations for the UST program in 1988.
    Those regulations set forth the technical requirements for tank
    installation and operation, established requirements for financial
    responsibility for owners and operators of tank systems, and set the
    criteria for approval of State regulatory programs. This system set
    clear 10-year goals for the upgrade of all underground tanks across the
    country and provided the framework for an effective partnership between
    EPA and the States, where the States were given discretion and
    flexibility on the implementation of the program. This delegation model
    is often cited as an example of how the Federal and State programs can
    work together toward a common goal.
        The Rhode Island underground storage tank program was formed in
    1984 and originally operated as an extension of the water pollution
    program. In 1993, the Department promulgated the Regulations for
    Underground Storage Facilities Used for Petroleum Products and
    Hazardous Materials that include specific operational requirements and
    leak and spill response provisions for USTs. Prior to 1993, the
    Department relied on the authorities in the Oil Pollution Control
    Regulations, which served as the basis for regulating all oil spills,
    including leaks from underground tanks.
        In 1994, the Rhode Island legislature passed the Rhode Island
    Underground Storage Tank Financial Responsibility Act. That law
    established a petroleum clean up account funded by a portion of the tax
    on gasoline sales to help meet the financial responsibility obligations
    of tank owners and operators in the state. The Regulations for the
    Underground Storage Tank Financial Responsibility Fund, which outlined
    procedures for eligibility and procedures to seek reimbursement, were
    promulgated in January 1997.
        The partnership between EPA and DEM, and more recently the Review
    Board for the Underground Storage Tank Financial Responsibility Fund,
    has been very effective in Rhode Island. Since the establishment of the
    program, the program has regulated 8,698 underground storage tanks
    holding petroleum products. Of that number, 6,942, or 80 percent, have
    been permanently closed. The remaining tank universe has largely been
    upgraded to current standards, 98 percent of the facilities with active
    tanks in Rhode Island meet regulatory standards for corrosion
    protection and have leak detection systems.
        Federal assistance has been a critical component of this effort.
    Since 1985, EPA has provided over $3,100,000 in funds to support the
    regulation of underground tank systems. Fees collected from owners and
    operators of tank systems have supplemented these funds.

                         LEAKING TANKS IN RHODE ISLAND

        Leaking underground storage tanks, as well as other types of spills
    and releases from these facilities, can cause catastrophic impacts to
    the environment and the surrounding community. We have all seen and
    heard the horrible story from here in Pascoag. However, since the start
    of our underground storage tank program, there have been 1489 releases
    from underground tanks have been confirmed in Rhode Island. The vast
    majorities of these releases, 1,117, or 75 percent, have been
    completely cleaned up. Of the remainder, 112 are subject to ongoing
    monitoring to ensure that conditions continue to improve. There are
    currently 369 sites in Rhode Island that either have corrective
    measures ongoing or require such action.
        The impacts of the Pascoag contamination are serious, widespread,
    and unprecedented in Rhode Island in terms of the impact on people in
    the community. Over 4,000 people were left without a safe source of
    drinking water for their homes. Rhode Island has had a history of
    serious releases, however. One of the earliest spills on record
    occurred in Richmond, Rhode Island and impacted the water supply for
    the Canob Park community. Groundwater investigations in this community
    are documented as far back as 1963, with the earliest suspicions of
    gasoline contamination documented in 1970. This case drew national
    attention as it was featured on 60 Minutes in November 1983 as one of
    the first serious indications of a deeper problem with contamination
    from leaking tanks. Years later, a major release at the Hendel's
    facility in nearby Connecticut seriously threatened one of the water
    supply wells for Westerly. In 1993, a leak was discovered at the
    Willie's Texaco facility on the border of East Greenwich and North
    Kingstown. That spill threatened major supply wells for the Kent County
    Water Authority, the town of North Kingstown, and the Economic
    Development Corporation's water supply for the Quonset Point Industrial
    Park. Fortunately, after great effort and expense, the migration of
    that contamination was controlled before those water supplies were
    impacted.
        The damage from leaking tanks is not limited to groundwater and
    water supplies. In 1993, serious leaks at the Coffey's Texaco facility
    in Newport and the Duva's Texaco facility in Providence caused
    contamination to flow under nearby buildings and into utilities, and
    vapors seeped up into these structures. In Newport, the historic
    Newport County Courthouse was temporarily shut down and ventilation
    systems were installed to control the vapors. At the Duva's site, a
    long, difficult battle was waged to control contamination that was
    seeping into utility lines in the streets. At times, the level of
    gasoline vapors in those lines reached potentially explosive
    conditions. In Bristol, a family had to be relocated for over a year
    when gasoline vapors seeped into their basement from the Serpa's Getty
    site and in Cranston, a doctor's office was impacted when vapors
    migrated from the adjacent Speedy Oil gas station. Unfortunately, we
    are battling the migration of contamination and vapors in Pascoag now
    as well. Several structures, including a single-family home, have had
    vapors from gasoline or the individual constituents, such as benzene,
    detected inside.
        Finally, leaking tanks can seriously impact the quality of our
    environment and our quality of life. When contamination is detected in
    a community, the anxiety of the residents rises as people worry about
    the health and safety of their families. Property values plummet when
    contamination is detected nearby. Contamination can migrate into our
    natural areas and destroy their value and beauty. In Warwick, gasoline
    migrated from the Potter's Mobil site and contaminated a wetland area
    in the center of a residential neighborhood. Not only was the value of
    the wetland diminished, but odors from the contamination caused
    problems throughout that neighborhood and impacted resident's quality
    of life until they were controlled.
        The costs responding to these releases are astronomical. Since
    1987, EPA has provided over $9,500,000 in Federal funding to Rhode
    Island for response to leaking tanks and support for our leaking tanks
    program. Since it became operational in 1998, the Rhode Island
    Underground Storage Tank Responsibility Fund has reimbursed tank owners
    and operators for $21,248,648 in expenses incurred responding to leaks
    at 155 facilities throughout the State. We cannot even guess the costs
    incurred by business in responding to these spills.

              THE UNDERGROUND STORAGE TANK COMPLIANCE ACT OF 2001

        Many, many things have changed since the underground storage tank
    program was first instituted. The nation's tanks have been upgraded
    with systems to protect them against corrosion and overfill. Tank
    systems have leak detection equipment in place and mechanisms are in
    place to provide financial assurance for response to spills and leaks.
    Still, leaks are still occurring and we are struggling to identify the
    resources to respond to major cases like the one here in Pascoag. New
    upgraded systems are also much more complex and difficult to operate
    correctly.
        We strongly support what we see as the underlying principle of the
    Underground Storage Tank Compliance Act of 2001, which is to give
    States greater flexibility to implement the underground storage tank
    program, particularly by providing more flexibility in the use of funds
    to do more proactive work on preventing leaks.
        We agree with the specific provision that directs EPA to distribute
    at a minimum 80 percent of the funds appropriated each year from the
    Leaking Underground Storage Tank Trust Fund. It is our understanding
    that, on average, EPA has distributed more than 80 percent of the funds
    appropriated from this account to the States. We applaud EPA for taking
    that approach and believe it has been effective. Based on the
    partnership I described earlier, the State programs implement the
    overwhelming majority of the UST program nationally and it is critical
    that funds go to the States to continue, and expand, this work.
        Historically, States, including Rhode Island, have used funding
    from the Leaking Tank Trust Fund for corrective action and providing
    core funding for our leaking tank response program. We have continually
    faced challenges funding our regulatory program to oversee the
    operation of underground tanks and effectively preventing leaks. We
    strongly support the new provisions in this bill that allow States to
    use funds from the leaking tank trust fund to enforce State or local
    tank leak detection, prevention and other requirements through State or
    local programs.
        The bill also speaks to the allocation process for distributing
    funds among the States. Rhode Island strongly supports the allocation
    process currently being used by EPA.
        The bill sets a very clear mandate that all USTs regulated under
    Subtitle I of RCRA be inspected every 2 years. When we first reviewed
    this language, we were very concerned that we would not be able to meet
    this mandate. Preliminary discussions with environmental agencies from
    other States indicate that we are not alone in this concern.
    Limitations on staffing and other resources have restricted our ability
    to inspect tanks in Rhode Island to a frequency of once every 6 to 7
    years. While we recognize that this is unacceptable and is not
    providing the level of protection necessary, we have not been able to
    build our staff to a level that would allow more frequent inspections.
    In reviewing this concept over the past few weeks, we believe that an
    effective alternative may be to license inspectors who conduct the
    checks and monitoring necessary. We are considering requirements for
    tank owners and operators to have their tanks inspected by a licensed
    inspector on a yearly, or biennial, basis and condition operation of
    the tank system on certification of a satisfactory inspection. We could
    then use our own resources to audit select stations based on priorities
    set over time, including risk to water supplies and sensitive natural
    areas. This is one approach that we are considering in Rhode Island.
    States have shown a history of being innovators in this program and
    others and I am sure that many other effective alternatives will also
    be considered as this bill moves forward. However, for Rhode Island,
    this will be a very different approach than what is in place right now.
    We hope the bill will provide flexibility during the transition period
    when States look to new, innovative ways to meet this goal.
        We support the concept of better training for operators of UST
    systems. We also believe that EPA is well suited to develop guidance on
    different methods for training operators of underground storage tanks.
    However, we believe that the guidance should be flexible enough to
    allow effective and innovative approaches that may be developed by
    States. Prescriptive requirements on operator training programs may
    have the unintended effect of stifling innovation and limiting programs
    to the lowest common denominator. The bill clearly recognizes the
    challenges that are faced when developing such a training program and
    any effective program must be fluid enough to respond to the frequent
    improvements in tank technology. Furthermore, any training program must
    be clearly understood and under almost continuous implementation given
    the turnover rate seen in the automotive fueling business. Given these
    challenges, the States should have maximum flexibility in developing
    and implementing a program that meets their needs and the needs of
    their stakeholders.
        The bill allows the Administrator to provide an award of up to
    $50,000 if the State develops and implements a State operator training
    strategy. We strongly support the concept of a ``reward'' for
    innovation and program improvement.
        As we are all aware, controlling and removing methyl tertiary butyl
    ether (MTBE) from the environment after a release is very challenging.
    Conventional treatment methods, such as pump and treat approaches and
    vapor extraction, are difficult to implement due to the high solubility
    of the compound and the limited effectiveness of activated carbon for
    capturing the material. In Pascoag, we were treating 200,000 gallons of
    water per day to remove approximately 1,800 parts per billion of MTBE.
    The health advisory for drinking water is 40 ppb. Costs were much
    higher than our original estimates based, in part, on the fact that the
    carbon filtration units were not as effective as expected for removing
    the compound and needed to be replaced much more frequently. Also,
    since MTBE is so soluble in water, it migrates away from the source
    much quicker than other compounds. This increases the area and
    complexity of the investigation, and drives up the cost. In Pascoag,
    the plume of contamination is estimated to cover over 13 acres.
        We strongly support the provision in the bill that authorizes a
    one-time appropriation of $200 million for the remediation of MTBE
    contamination. We also support the recognition that MTBE contamination
    threatens the welfare of people who may be impacted. While the various
    health effects of MTBE are under continual discussion, there is no
    doubt that concentrations near 40 ppb can render water undrinkable. The
    taste and smell of this contaminant is distinctive and objectionable
    and, in many cases, provides the secondary standard driving remediation
    of these sites.
        We support the provision in the bill that provides funding to
    conduct inspections, issue orders, or bring actions under this
    subtitle. This section of the bill also requires States to submit to
    EPA a strategy to ensure compliance of tanks owned by State or local
    governments with the provisions of the subtitle. In Rhode Island, the
    State has instituted a program to proactively look at tanks owned or
    operated by State agencies. With municipalities, we have used a mix of
    compliance assistance tools and enforcement actions to ensure
    compliance, with varying levels of effectiveness. This section also
    allows EPA to provide an award of up to $50,000 if the State develops
    and implements such a strategy. Again, we strongly support the concept
    of a ``reward'' for innovation and program improvement.

                            SUMMARY AND CONCLUSIONS

        In conclusion, we all recognize that the underground storage tank
    program implemented by EPA and the states have made tremendous progress
    in controlling the threats of releases Bare steel tanks are largely a
    thing of the past and the majority of tank systems are equipped to
    protect them from corrosion, detect leaks in a timely manner, and
    prevent overfilling. However, these new systems are more complex and
    difficult to operate. If not run correctly, they can provide a false
    sense of security without the level of protection they are designed to
    provide.
        We strongly support the underlying principle of the Underground
    Storage Tank Compliance Act of 2001, which is to give States greater
    flexibility to implement the underground storage tank program,
    particularly by providing more flexibility in the use of funds to do
    more proactive work on preventing leaks.
        We hope the bill will provide flexibility during the transition
    period when States look to new, innovative ways to meet all the goals
    of this bill. States have shown a history of being innovators in the
    UST program and I am sure that many new and effective approaches will
    be considered as this bill moves forward.
        Thank you once again for the opportunity to comment on this
    legislation and thank you once again, Senator Chafee, for your
    leadership on this issue.
                                   __________
          Statement of Hon. Scott P. Rabideau, Rhode Island House of
                   Representatives, District 60, Burrillville

                    I. HISTORY OF THE PASCOAG FIRE DISTRICT

         Established by Charter in 1887
         Designed to create a self sufficient village by providing
    fire protection, electric utility service and water
         Roots are found in the history of textile mill communities

                         II. SUBSURFACE GEOLOGY OF AREA

         Primarily two distinct glacial formations in the
    Northeast; outwash and till
         Outwash deposits normally follow existing or former river
    basins
         Volumes of surface water are normally tapped from outwash
    aquifers

                III. WATER RESOURCES OF HARRISVILLE AND PASCOAG

         Branch River Basin Aquifer is the sole source water supply
    for both villages
         All existing wells draw from outwash formations within
    this aquifer
         Unfortunately, many thoroughfares also follow the outwash
    or river basin. Colonial routes always took the path of least
    resistance along waterways
         Commercial and industrial development in the Northeast is
    always found along the river corridors

      IV. NEED FOR MORE STRINGENT COMPLIANCE FOR UNDERGROUND STORAGE TANKS

        MTBE is a water soluble component of today's formulated gasoline
        Service stations are historically located along river basin routes
    throughout the Northeast
        Leaking gasoline storage tanks pose extra threats to water supplies
    since the addition of MTBE
        MTBE dissolves in the groundwater and is transported much greater
    distances than the other components of gasoline
        Once introduced to a community water supply the results are
    devastating

                      V. PASCOAG'S TRIALS AND TRIBULATIONS

         No potable water for over 140 days
         Skin rashes and other health problems reported
         Loss of business revenue
         Loss of financial equity in homes
         Burden on already short state clean up money

                                   __________
        Statement of Arthur J. DeBlois III, on Behalf of the Society of
    Independent Gasoline Marketers of America and the National Association
                             of Convenience Stores

        Good morning, Mr. Chairman. My name is Arthur J. DeBlois. I am
    president and CEO of DB Companies, Inc., an independent motor fuels
    marketer headquartered here in Providence. DB Companies own and operate
    86 DB Mart stores in Rhode Island, Massachusetts, Connecticut and the
    Hudson Valley of New York. In addition, we have 84 franchisee-operated
    locations.
        Thank you for inviting me to testify today on issues related to
    ``USTs''--that is, underground storage tanks--and your bill, S. 1850,
    the ``Underground Storage Tank Compliance Act of 2001.'' I am
    representing the Society of Independent Gasoline Marketers of America
    (``SIGMA'') and the National Association of Convenience Stores
    (``NACS'').
        SIGMA is a national trade association of approximately 260 motor
    fuels marketers operating in all 50 States. SIGMA members supply over
    28,000 motor fuel outlets and sell over 48 billion gallons of gasoline
    and diesel annually--or approximately 30 percent of all motor fuels
    sold in the nation. NACS is a national trade association of more than
    2,300 companies that operate over 104,000 convenience stores nationwide
    and employ 1.4 million individuals. Over 75 percent of NACS' member
    companies sell motor fuels, and the convenience store industry sold
    more than 115 billion gallons of motor fuels in 2000.
        SIGMA and NACS applaud you for holding this UST hearing today in
    Pascoag and for your leadership on this issue. Through today's hearing,
    the Associations would like to send a clear and strong message to the
    residents of Pascoag--responsible petroleum marketers have ``zero
    tolerance'' for the kind of release that has contaminated your drinking
    water supply. We are sorry for the inconvenience you have had to endure
    these many months. At the same time, NACS and SIGMA have been long-
    standing and vocal advocates for vigorous enforcement of Federal and
    State UST regulations. Further, S. 1850 takes additional steps to
    strengthen UST enforcement and provide more funds to address situations
    like the one that has occurred here in northwest Rhode Island.
        As an aside, I was reminded the other day that Rhode Island has
    played an interesting, key role in the history of UST regulation. In
    December 1983, the ``60 Minutes'' show introduced over 30 million
    viewers to the problems of leaking tanks. The narrator, Harry Reasoner,
    detailed the serious groundwater contamination problems in Canob Park,
    a 9-acre development in Richmond, Rhode Island, resulting from service
    station tank leaks. The CBS News story was one catalyst that led to the
    enactment of the Federal tank law in November 1984. Much has been done
    in the last 18 years to prevent, detect and clean up UST releases.
    Rather than having history repeat itself, SIGMA and NACS hope that the
    problems faced today by the residents of Pascoag will lead to prompt
    action by Congress to improve the current UST program by enhancing the
    ability of the states to enforce and address tank leaks and spills by
    expanding their allowable uses of the annual congressional
    appropriations from the Federal Leaking Underground Storage Tank
    (``LUST'') Trust Fund. As you know, your bill includes over $460
    million in new authorizations from the nearly $2 billion and growing--
    LUST Trust Fund.
        In the few minutes that I have been allotted to speak, I would like
    to make some connections between the situation here in Pascoag and S.
    1850--that is, how the enactment of S. 1850 would help to mitigate
    future Pascoags from occurring. My familiarity with the facts
    associated with the local MTBE contamination largely is from reading
    the newspaper accounts. As a result, I am not qualified to address
    specifics with the Department of Environmental Management (``DEM'')
    investigation and the technical aspects of the remedy. Again, as I said
    at the outset, NACS and SIGMA's members do not condone the actions of
    the suspected UST operator before and after the release was detected.
        Last May, the General Accounting Office (``GAO'') presented you and
    Senator Robert Smith with a report, ``Improved Inspections and
    Enforcement Would Better Ensure the Safety of Underground Storage
    Tanks.'' GAO concluded, in part, that the U.S. Environmental Protection
    Agency (``EPA'') and the states have failed to enforce consistently the
    UST requirements. GAO estimated that, nearly 3 years after EPA's
    deadline of the 10-year phase-in (December 22, 1998) for
    environmentally protective tanks, only 89 percent of the regulated USTs
    had been replaced, upgraded or closed. GAO identified State and local
    governmental agencies and very small businesses as the primary
    categories of UST owners and operators who remain in non-compliance.
    GAO also indicated that rates for ongoing UST leak detection and
    compliance are lower than expected.
        In its report, GAO recommended steps that Congress could take to
    address these identified inconsistencies in the existing UST program.
    NACS and SIGMA have supported, and continue to support, measures that
    address GAO's recommendations and that are included in S. 1850:
         Authorize the use of LUST Trust Fund moneys by the states
    for UST enforcement;
         Remove restrictions on the use of LUST Trust Fund moneys
    by State UST funds, permitting clean-up resources to be deployed faster
    and minimizing clean-up costs and environmental harm from tank leak;
         Provide additional funds for use by the states in
    addressing high-priority releases, such as those containing MTBE; and
         Create a national UST data base to track upgraded and
    closed USTs.
        Some persons attending today's hearing may wonder why petroleum and
    convenience store marketers support effective enforcement of the UST
    regulations. Let me explain our position. First, small inventory losses
    become huge financial losses given our slim profit margins from intense
    competition. Second, since EPA promulgated its UST requirements in
    1988, SIGMA and NACS members have spent hundreds of millions of dollars
    complying with the tank standards. My company spent over $5 million
    upgrading our USTs. Further, many of our members, including the ``moms-
    and-pops'' closed retail locations as a means of compliance. I
    testified many years ago at a hearing held by the late Senator John
    Chafee that, with a 10-year phase-in of the requirements, there is
    absolutely no reason why any UST owner and operator should not be in
    compliance.
        Let me digress a moment and make a point that was best articulated
    by the late Senator in December 1998 to EPA--that is, there is no
    justification for EPA or the states to distinguish between private and
    publicly owned tanks when it comes to protecting human health and
    environment. A leak from the local public works or fire department's
    tank causes the same environmental harm as a release from a retail
    gasoline outlet's UST.
        Accordingly, NACS and SIGMA support the key elements of your bill--
    namely, expanding the allowable uses of the LUST Trust Fund moneys for
    UST enforcement; requiring every UST to be inspected at regular
    intervals; directing EPA to publish guidelines for training operators
    in the proper operation and maintenance of USTs; requiring EPA and the
    states to publish strategies for ensuring compliance for USTs owned by
    governmental agencies at every level; and providing additional funding
    for the remediation of certain MTBE or high-priority UST releases.
        There is one provision in S. 1850 that SIGMA and NACS would like to
    change. As introduced, your bill limits the use of LUST Trust Fund
    moneys by State UST reimbursement funds, like the one we have here in
    Rhode Island, where the UST owner or operator would face financial
    hardships but for the reimbursement. This provision encourages non-
    compliance by UST owners and operators. We believe that elimination of
    this limitation would expedite UST clean-ups and would leverage limited
    tank remediation funds.
        Notwithstanding the experiences of the residents of Pascoag, most
    UST cleanups are managed by responsible parties--that is, tank owners
    or operators--and are overseen by State UST implementing agencies--such
    as, DEM. The UST corrective action program largely has worked extremely
    well.
        State UST reimbursement funds, such as ours here in Rhode Island,
    have expended more than $5 billion for UST clean-ups over the past
    decade. According to State data, most state UST reimbursement funds are
    solvent; however, some of these funds have been paying claims at a
    faster rate than the revenues they receive. A growing concern from NACS
    and SIGMA members is that some State legislatures, increasingly
    strapped for cash, might ``borrow'' or raid the cash balances in these
    State UST assurance funds. This occurred here in Rhode Island during
    the State's last budget ``crunch.'' Cash flow, therefore, remains
    critical to the success of the State UST reimbursement funds, and
    allowing a State to use some of its LUST Trust Fund moneys from EPA for
    its UST reimbursement fund is one way to leverage limited clean-up
    resources.
        There is also a misplaced perception that eliminating the
    limitation in S. 1850 would send millions of dollars back to the major
    oil companies. NACS and SIGMA do not believe that to be the case. Most
    major oil companies were to first to replace their tanks, and likely
    have received the bulk of any clean-up reimbursements they were owed
    under the State UST assurance funds. In fact, removing the limitation
    would benefit Rhode Island's fund and the citizens of the State. The
    fund here has worked well despite severe funding limitations. According
    to State data, from late 2000 through the middle of last year, Rhode
    Island governmental entities placed a tremendous strain on the fund
    with 11 governmental sites consuming close to 48 percent of the fund's
    available resources. Additional moneys from the LUST Trust Fund would
    be a boost to Rhode Island's UST fund.
        UST owners and operators are more likely to initiate and complete
    tank clean-ups if they know that, after they pay the required ``front
    end'' amount, the State UST assurance fund will timely reimburse their
    clean-up expenses. Stated differently, if reimbursements become
    stretched out over a longer period of time, the UST owner or operator
    has an incentive to slow down the pace of their clean-ups. Thus,
    limiting the use of LUST Trust Fund moneys by State UST reimbursement
    funds will do nothing to maintain the pace of corrective actions.
        SIGMA and NACS also feel that removing the limitation also will
    assist with the clean-up of high-priority releases, such as the one
    here in Pascoag containing MTBE. If, for example, a small business can
    avoid significant legal expenses by assigning their clean-up costs to a
    State UST reimbursement fund, limited resources can be expended on
    clean-ups, rather than lawyers and consultants.
        As a final point, I would like to note NACS and SIGMA members'
    frustration with the level of LUST Trust Fund appropriations. In many
    instances, the per-gallon excise tax that funds the LUST Trust Fund is
    not passed through in the marketplace to the consumer; it is a cost of
    doing business. However, the LUST Trust Fund now is approaching an
    unobligated balance of $2 billion, and the current level of
    appropriations is less than the annual interest earned on the fund, not
    including the ongoing tax collections. The Government has and is
    continuing to collect a lot of money for the LUST Trust Fund. S. 1850
    recognizes this fact and authorizes a substantial increase in funding.
    The Associations hope that the key elements of your bill can be enacted
    and the appropriators agree to increase the annual appropriations.
        SIGMA and NACS appreciate this opportunity to present their views
    on USTs and S. 1850. The Associations regret that Pascoag is the
    backdrop for this hearing and that the residents here have been
    inconvenienced from the release that occurred. We look forward to
    working with you and members of the Senate Environment and Public Works
    Committee on UST legislation. I hope that NACS and SIGMA might be
    allowed to testify at a future legislative hearing on S. 1850 in
    Washington, DC.
        I will be happy to answer any questions my testimony may have
    raised. Thank you, Senator.

                    UNDERGROUND STORAGE TANK COMPLIANCE ACT

                                  ----------

                             WEDNESDAY, MAY 8, 2002

                                   U.S. Senate,
             Committee on Environment and Public Works,
            Subcommittee on Superfund, Toxics, Risk, and Waste
                                                    Management,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 1:36 p.m. in
    room 406, Senate Dirksen Building, Hon. Barbara Boxer (chairman
    of the subcommittee) presiding.
        Present: Senators Boxer, Chafee and Inhofe.

    OPENING STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM THE
                          STATE OF CALIFORNIA

        Senator Boxer. The subcommittee will come to order. We are
    having a meeting of our Superfund, Toxics, Risk and Waste
    Management Subcommittee where we are conducting a hearing on S.
    1850, the Underground Storage Tank Compliance Act, which has
    been introduced by the ranking member of the subcommittee,
    Senator Lincoln Chafee.
        Underground storage tanks pose a serious threat to
    groundwater if they are not maintained and operated properly.
    In California, we have had experience with just how much damage
    can be done by leaking underground storage tanks. We will
    have--is our Santa Monica person here? Thank you for being
    here. We will introduce you at the second panel. We will hear
    from the city of Santa Monica, a community that knows first-
    hand just how devastating leaking underground storage tanks can
    be.
        Santa Monica estimates that the cost to clean up the damage
    caused by MTBE in leaking tanks will total in the hundreds of
    millions of dollars, and that is just for one little city.
    Meanwhile, most of the drinking water wells are shut down.
    Again, this is just the experience of one city.
        There are an estimated 700,000 tanks located throughout the
    country. Last summer, the GAO issued a report that raises
    serious concerns about the current program to regulate
    underground storage tanks. One of the study's most disturbing
    findings is that as many as 200,000 tanks may not be operated
    or maintained properly. The threat to drinking water and public
    health, as well as the immense costs associated with cleanup,
    cannot be ignored. The question we must ask now is, what do we
    do about the continuing problem? I want to commend my
    colleague, Senator Chafee, for taking a very important step
    toward addressing what is a very real and serious threat.
        Senator Chafee has introduced S. 1850. His bill increases
    the tools available to deal with leak prevention, compliance
    and cleanup. The bill increases the funding for underground
    storage tank cleanup, including setting aside $200 million for
    MTBE cleanup. I do believe this is a very good start, and I
    would like to work with my colleague to do more, including
    further enhancing enforcement tools and increasing the funding
    levels. The problem with leaking tanks is not going to go away.
    It will only get worse if efforts are not made to address the
    problem as recommended by GAO.
        So I look forward to hearing from the witnesses today as we
    look for ways to address this threat to drinking water and
    public health.
        Senator Chafee.

    OPENING STATEMENT OF HON. LINCOLN CHAFEE, U.S. SENATOR FROM THE
                         STATE OF RHODE ISLAND

        Senator Chafee. Thank you, Madam Chairwoman, especially for
    holding this hearing. This is the second one. We did have a
    field hearing in Rhode Island in my community Pascoag, which
    did suffer a leak from an underground storage tank which also
    cost many hundreds of thousands of dollars to clean up, and I
    would like to thank the EPA for their grant yesterday of $1
    million to help toward that cleanup. As the chair said, in
    Santa Monica, tens of millions of dollars for cleanup, which we
    could save by of course having a good bill that protected their
    drinking water from leaking from these underground storage
    tanks. It is a classic case of an ounce of prevention is worth
    a pound of cure, or as my grandfather used to say, a stitch in
    time saves nine.
        [Laughter.]
        Senator Chafee. I look forward to the testimony here. We
    did have an instance, as I mentioned, in Pascoag, RI where for
    4 months, the 1,200 residents were completely out of water.
    They could not cook. They could not bathe. They could not
    drink, obviously, for 4 months. So I felt first-hand the ire of
    people that are affected by this. I would also like to point
    out, although we are now debating MTBE phase-out, I still think
    whether that happens or not, of course, this is a good bill,
    because many of the problems have been associated with MTBE,
    but nonetheless many toxins are released into the water even if
    MTBE is phased out over some length of time.
        So I look forward to the testimony and I thank you all for
    coming here this afternoon.
        Thank you, Senator Boxer.
        [The prepared statement of Senator Chafee follows:]

      Statement of Hon. Lincoln D. Chafee, U.S. Senator from the State of
                                  Rhode Island

        Good afternoon. I would like to thank Senator Boxer for
    conducting this hearing on the Underground Storage Tank
    Compliance Act of 2001. This is the second hearing before the
    committee on this legislation. I conducted a field hearing in
    Pascoag, RI on February 25 during which we received first-hand
    testimony from people affected directly by leaking underground
    storage tanks about the problems we face when gasoline and MTBE
    contaminate groundwater.
        I would like to provide a brief history of Federal efforts
    to address underground storage tanks, so we can have a better
    understanding of what is needed today. In 1984, Congress
    enacted a comprehensive program to address the problem of
    leaking tanks. This was in reaction to the discovery of
    groundwater contamination in different parts of the country and
    its linkage to underground tanks. In fact, Rhode Island played
    a leading role in formulating that debate. A 1983 60 Minutes
    report about leaking tanks in Canob Park in Richmond increased
    the Nation's awareness about this widespread problem.
        The 1984 law imposed minimum Federal requirements for leak
    detection and prevention standards for underground tanks. In
    1988, owners and operators of existing tank systems were given
    10 years to upgrade, replace, or close tanks that didn't meet
    minimum Federal requirements. As the deadline passed in
    December 1998, many underground storage tanks failed to meet
    the Federal standards to prevent spillage, overfilling, and
    corrosion.
        To assess the situation, Senator Smith and I asked the U.S.
    General Accounting Office to examine compliance of tanks with
    Federal requirements. Last May, GAO concluded that
    approximately 76,000 tanks have never been upgraded to meet
    minimum Federal standards. In addition, GAO found that more
    than 200,000 tanks are not being operated and maintained
    properly. GAO cited infrequent tank inspections and limited
    funding among the contributing factors. These problems are
    real. The Village of Pascoag, RI learned the hard way that the
    problems GAO outlined are real and have serious consequences.
    Twelve hundred households were without water with which to
    drink, bathe, or cook for over 4 months.
        In order to assist communities that are grappling with
    these problems and to prevent such problems from reoccurring,
    several of my colleagues and I introduced the bipartisan
    Underground Storage Tank Compliance Act. It requires the
    inspection of all underground storage tanks every 2 years and
    for the first time focuses on the training of tank operators.
    It simply does not make sense to install modern, protective
    equipment if the people who operate them do so improperly. The
    bill also provides the Federal Government and States with the
    tools necessary to ensure that all parties are meeting Federal
    standards. In addition, the legislation emphasizes compliance
    of tanks owned by Federal, State, and local governments, and
    provides $200 million for cleanup of sites contaminated by
    MTBE.
        I would like to quickly address the issue of MTBE. During
    the energy debate, the Senate spent a lot of time debating the
    phase-out of MTBE and the use of ethanol. I would like to
    clarify that S. 1850 is independent from that effort. Assuming
    Congress phases out MTBE, we must still fix the tanks so that
    ordinary gasoline does not spoil our environment.
        I am looking forward to hearing from our witnesses. The
    testimony we received at the field hearing certainly provided
    unique insight into the problems we are facing, and I know
    today's panelists will do the same. I would like to especially
    welcome Art DeBlois from the DB Companies in Rhode Island, who
    is testifying today on behalf of SIGMA and NACS. Art, thank you
    for being here today. I would also like to extend my
    appreciation to Marianne Horinko for testifying today and for
    yesterday's $1 million grant, which EPA provided to Pascoag, RI
    to continue the MTBE cleanup. The money is very needed and very
    welcome.

        Senator Boxer. Thank you.
        Senator Inhofe.

     OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM
                         THE STATE OF OKLAHOMA

        Senator Inhofe. Thank you, Madam Chairwoman.
        First of all, I am pleased that we are having this
    subcommittee hearing and I am also pleased to be a cosponsor of
    Senator Chafee's S. 1850. To date, the Federal Leaking
    Underground Storage Tank Trust Fund Program has been a success
    both in my home State of Oklahoma and across the Nation.
    According to recent EPA estimates, approximately 90 percent of
    the petroleum USTs in the Nation have been upgraded to comply
    with Federal standards. This is certainly a success story,
    particularly when compared to other environmental cleanup
    program, that the work is not done yet.
        I support S. 1850 because it will allow States to use
    Federal funds to enforce the Federal UST standards. I support
    this bill because it will require Federal and State agencies to
    bring their USTs up to Federal standards or close them. I
    support the bill because it will authorize additional funds to
    be appropriated from the LUST Trust Fund.
        I ask unanimous consent that my whole statement be made a
    part of the record.
        Senator Boxer. Without objection.
        Senator Inhofe  I want to add one thing, Madam Chairwoman.
    I think it is significant that we at some point arrive at the
    point that there is a problem. We do not want MTBEs in our
    drinking water leaking in. We do not want ethanol in there
    either. I think the answer, and I have always thought the
    answer, is to do it with an upgrade as suggested in this
    legislation. So I do support you, Senator Chafee, and I look
    forward to passing this legislation.
        Now, I have to say, Madam Chairwoman, that we are marking
    up our Defense authorization bill at this moment, so I am not
    going to be able to stay here.
        Thank you very much.
        [The prepared statement of Senator Inhofe follows:]

        Statement of Hon. James M. Inhofe, U.S. Senator from the State
                                  of Oklahoma

        Thank you, Madam Chairwoman. I am pleased that the
    subcommittee is conducting this hearing today on Senator
    Chafee's underground storage tank reform legislation--S. 1850.
    I am a co-sponsor of this important legislation and I look
    forward to the testimony of the witnesses at the hearing today.
        To date, the Federal Leaking Underground Storage Tank Trust
    Fund program has been a success, both in my home State of
    Oklahoma and across the Nation. According to recent EPA
    estimates, approximately 90 percent of petroleum USTs in the
    Nation have been upgraded to comply with Federal standards.
    This is certainly a success story, particularly when compared
    to other environmental clean-up programs, but the work is not
    yet done.
        I support S. 1850 because it will allow States to use
    Federal funds to enforce the Federal UST standards. I support
    this bill because it will require Federal and State agencies to
    bring their USTs up to Federal standards or close them. And I
    support S. 1850 because it will authorize additional funds to
    be appropriated from the LUST Trust Fund.
        It astounds me that the Federal LUST Trust Fund has a
    balance of almost $2 billion and yet we are appropriating less
    than $75 million each year for this important program. I
    strongly support increased appropriations for this program so
    that additional funds can be provided to the States for their
    continued effective and efficiency administration of this
    important environmental program.
        I know a lot of discussion today will villainizing MTBE. I
    think the elimination of MTBE may be a case where we better be
    careful what we ask for, because we might get it. Now, while I
    tried to make the fuels provision of the Energy bill better, I
    still have concerns with that package. Among my concerns is the
    virtual elimination of MTBE. I would observe that S. 1850's
    provisions are the solution to gasoline contamination that
    would make an MTBE ban unnecessary--at least in a world where
    the facts mattered. Simply stated, if we fix the tanks and
    thereby improve the handling of gasoline, it makes no sense to
    then ban a single fuel additive among the many gasoline
    components that may leak. Indeed, EPA's own Blue Ribbon Panel--
    the study that arguably launched the interest in this
    legislation--bluntly stated, ``The major source of groundwater
    contamination appears to be releases from underground gasoline
    storage systems.'' Furthermore, if these tanks are not
    improved, we could start to find ethanol in our water as a
    result of the ethanol mandate. Again, banning fuel additives is
    not the answer to our water contamination problems, but rather
    it is the leaking tanks that must be addressed.
        Thank you, Madam Chairwoman, for calling this hearing. I
    hope this committee will act expeditiously on S. 1850 shortly
    after the conclusion of this hearing.

        Senator Boxer. Thank you so much.
        Our first witness today is Ms. Marianne Horinko. She
    currently serves as Assistant Administrator for the Office of
    Solid Waste Emergency Response at EPA; also, our second witness
    on this panel, John Stephenson, currently serves as Director
    for Natural Resources and Environment at the GAO. We are going
    to set the clocks for 5 minutes in the hopes that we can move
    it along just because we have a lot of witnesses.
        So, Ms. Horinko, welcome.

    STATEMENT OF MARIANNE HORINKO, ASSISTANT ADMINISTRATOR, OFFICE
       OF SOLID WASTE AND EMERGENCY RESPONSE, U.S. ENVIRONMENTAL
                           PROTECTION AGENCY

        Ms. Horinko. Thank you, Madam Chairwoman, Senator Chafee.
    Thank you very much for this opportunity to be here today and
    discuss S. 1850, the Underground Storage Tank Compliance Act of
    2001.
        I will briefly today highlight some of our program
    accomplishments before I turn to the new challenges that we
    face. With your permission, I would ask that my written
    testimony be submitted for the record.
        Eighteen years ago, Congress responded to the growing
    problem of leading underground petroleum tanks by enacting
    Subtitle I of the Resource Conservation and Recovery Act, or
    RCRA. EPA, States, tribes and the private sector responded to
    Congress' mandate by working together to clean up leaking tanks
    and prevent future leaks. Through this strong partnership, we
    have made significant progress in protecting the public from
    underground storage tank problems. I would like to highlight
    some of our mote noteworthy successes.
        When this program was first established, there were over 2
    million tanks, many of which were bare steel and corroding.
    Together, EPA and the States have safely closed nearly 1.5
    million of these substandard tanks. By doing so, these tanks
    can no longer contaminate our drinking water, groundwater or
    soil. Together, we have cleaned up about 270,000 leaking tanks,
    nearly 65 percent of all leaks. Together, we have gotten
    virtually all tank owners to upgrade their tanks and install
    leak detection equipment. And proudest of all, because of this
    effort, the number of new leaks has sharply declined from about
    30,000 in 1998 to just over 6,500 last year.
        Although we have made significant progress, our work is far
    from finished. One of our toughest challenges is indeed MTBE,
    both preventing new releases and cleaning up existing MTBE
    contamination. This is a significant undertaking, especially in
    communities like Long Island, Santa Monica, Lake Tahoe and
    Pascoag, RI, who have lost some or all of their drinking water
    due to MTBE contamination. We are working closely with these
    and other communities to answer their technical questions about
    MTBE and in some cases provide financial support.
        MTBE is not our only challenge. Although we have made great
    strides cleaning up underground tanks, we still have 150,000
    releases that need to be cleaned up. The States are committed
    with us to clean up these releases as quickly as possible.
    Together, we are working on an initiative to accelerate
    cleanups through voluntary multi-site agreements, performance-
    based cleanups, and risk-based decisionmaking.
        We are also looking at our cleanup challenge with an eye
    toward making contaminated land available for re-use. And one
    of our greatest redevelopment opportunities is old abandoned
    gas stations. That is why we created USTfields, with 10 pilots
    already under way and another 40 pilots to be announced this
    spring. These pilots are just the beginning. Our Nation's new
    brownfields law includes greater opportunities and money to
    clean up and redevelop old gas stations and other abandoned
    petroleum sites. The President's fiscal year 2003 budget
    doubles the current funding for the brownfields program. We are
    very excited and appreciative about the opportunity our new
    brownfields law presents to marry environmental results with
    community revitalization.
        In addition to these efforts, we must also prevent future
    leaks through greater compliance. Although we have made
    considerable progress by getting most tank owners to install
    better equipment, we must now make sure this equipment is being
    operated properly. The MTBE challenge makes this even more
    important. We are working closely with States on creative ways
    to improve compliance through third-party inspectors, multi-
    site compliance agreements, more intensive training for State
    inspectors, and better guidance to gas station owners and
    operators so they know how to maintain their equipment and know
    what to do when a problem occurs.
        Finally, over the past couple of years, we have learned
    that despite our best efforts, some leaks are coming from new
    and upgraded tanks. To get a better handle on the sources and
    cause of these leaks, we have been working closely with States,
    universities and industry, and some trends are emerging.
    Although today's underground tanks are much better than older
    tanks, some tough problems remain. Many problems are caused by
    human error, such as failing to operate leak detection
    equipment correctly or prevent spills and overfills during
    delivery.
        But leaks from pipes dispensers and in some cases the tanks
    themselves are also a cause for concern. More work needs to be
    done to fully understand the source and causes of these
    problems, and more importantly, to identify appropriate
    remedies.
        Despite all of our efforts, we can do better, and I am
    pleased that S. 1850 includes a number of provisions that can
    help us improve our underground tank program. For example,
    allowing the LUST funds to be used for inspections and
    compliance activities will give added flexibility to EPA and
    States to direct our resources to the most pressing needs.
    Similarly, the bill's focus on MTBE is both timely and
    appropriate, as is the focus on increasing inspections and
    improving training.
        As with any bill, there are provisions that need further
    clarification or may have some unintended effects, and we would
    be pleased to work with you and your staff to discuss these
    issues in more detail.
        In summary, Madam Chairwoman, Senator Chafee, we are very
    pleased with the significant progress that we have made in
    closing substandard tanks, improving compliance, and cleaning
    up releases. Nevertheless, we do have a lot of work ahead,
    particularly in light of the challenge that MTBE poses. I look
    forward to working with you and other members of this committee
    to address the work before us.
        Madam Chairwoman, this concludes my testimony. I will be
    happy to answer any questions.
        Senator Boxer. Thank you.
        Mr. Stephenson.

     STATEMENT OF JOHN STEPHENSON, DIRECTOR, NATURAL RESOURCES AND
              ENVIRONMENT, U.S. GENERAL ACCOUNTING OFFICE

        Mr. Stephenson. Madam Chair, Senator Chafee, I am here to
    discuss GAO's report on EPA's Underground Storage Tank Program
    issued to this committee last year. I think you will find that
    our report suggested improvements to the program are consistent
    with Senate bill 1850 being discussed at today's hearing. This
    legislation is timely because reports of drinking water
    contamination from gas stations continue to mount.
        For example, one pollutant, MTBE, a fuel additive to reduce
    emissions, has been found in numerous drinking water supplies
    across the Nation, as you are well aware. MTBE contamination
    poses serious health risks ranging from nausea to kidney or
    liver damage, and potentially even cancer. To help prevent such
    problems, Congress in 1984 established the UST Program to
    protect the public from potential leaks from the then-more than
    2 million tanks across the Nation.
        Under the program, tank owners were required to install new
    leak detection equipment by the end of 1993, and additional
    equipment by the end of 1998. If these conditions were not met,
    owners had to close or remove their tanks. Congress also
    created a trust fund in 1986 to help cover cleanup costs. The
    trust fund is replenished through a \1/10\-cent per gallon
    gasoline tax, and at the end of fiscal year 2001, the fund had
    a balance of about $1.7 billion, and Congress was appropriating
    about $70 million a year from that fund.
        Our report addresses three issues: the extent tanks were in
    compliance with program requirements, how States were
    inspecting tanks and enforcing requirements, and whether
    upgraded tanks were still leaking. The information they now
    report is based on a survey we conducted of all 50 States and
    the District of Columbia. Here is what we found. About 1.5
    million tanks have been permanently closed since the program
    began, leaving about 693,000 active tanks. About 89 percent of
    these tanks were in compliance with equipment requirements at
    that time. As seen in the first chart here, compliance levels
    vary from State to State. The darker the color, the lower the
    compliance rate, and in the black States here, we did not have
    enough data to make a conclusion about compliance.
        Now, 89 percent is a fairly good compliance rate. However,
    we found that almost 30 percent--more than 200,000 tanks--were
    not being operated and maintained properly, thus increasing the
    chances for leaks. Indeed, 15 States reported that leak
    detection equipment was frequently turned off or improperly
    maintained. The EPA and the States speculated that the
    remaining 11 percent, or 76,000 non-compliant tanks were
    probably inactive. However, our study showed that it is
    extremely important to address closed or abandoned tanks
    because they may continue to pose health risks.
        I should point out that these statistics are often based on
    best guesses because many States do not inspect their tanks
    often enough to have definitive information on compliance
    rates. In fact, we found that over half the States do not meet
    the minimum inspection rate recommended by EPA of at least once
    every 3 years. This second chart shows inspection rates by
    States, with the States not meeting EPA minimum depicted in
    gray and black.
        We also found that most States can levy citations or fines,
    but that only about half have the authority to prohibit fuel
    deliveries--probably the most effective tool for ensuring
    compliance with program requirements. This last chart simply
    shows in white the States with the authority to prohibit
    deliveries, and the gray States to not.
        Finally, we found that some tanks, despite being upgraded
    with the required equipment, may continue to leak. Thirty-four
    States reported the potential for such leaks. At the time of
    our review, EPA and some localities had studies under way to
    assess the extent tanks were still leaking. In addition, EPA
    was at the time considering whether tank requirements needed to
    be upgraded, such as mandating double-walled tanks.
        To address the problems highlighted in our report, we
    recommended improved training, better inspections and
    enforcement, and special attention to tanks not yet upgraded,
    closed or removed. We also suggested that Congress consider
    expanding use of the trust fund to include inspection and
    enforcement activities in addition to clean up. By my reading,
    S. 1850 is consistent with these recommendations.
        Madam Chair, that concludes my statement. I will be happy
    to answer any questions.
        Senator Boxer. Thank you. If you could give us about 6
    minutes each for questions, please. Thank you.
        Ms. Horinko, you said that you were pleased with the
    progress. I am not pleased with the progress so let's start
    from there. And that is why I think this bill is so important,
    and I want to even make it broader. I think the GAO has good
    ways to do that. You have not taken a position, the
    Administration, on the bill. When do you think you would?
        Ms. Horinko. I do not have a precise data, Madam
    Chairwoman, but I would be happy to look into that and get back
    to you. I am able to say that many of the bill's provisions are
    very helpful and we certainly support the general tenor and
    direction of the bill.
        Senator Boxer. How about the money--spending the amount of
    money the Senators are working toward, which eventually reach--
    I believe it is $200 million. Is that correct? How about that
    part of it?
        Ms. Horinko. Certainly, I support the President's budget,
    which is consistent with the enacted levels of the program over
    the last number of years.
        Senator Boxer. I was asking you, do you support the levels
    of funding that Senator Chafee is suggesting, which as you know
    is a whole big jump from that, because of the size of the
    problem.
        Ms. Horinko. It certainly is, Madam Chairwoman, and----
        Senator Boxer. I am asking what is your view on that--the
    Administration's view on spending that type of resource on this
    problem in our country.
        Ms. Horinko. Certainly, it is important to spend a
    significant amount of our resources on addressing this
    challenge of MTBE, and we currently are, and the President's
    budget supports that level----
        Senator Boxer. Wait a minute. You say that you are spending
    sufficient resources now on the problem.
        Ms. Horinko. We are spending sufficient resources in light
    of all the competing priorities.
        Senator Boxer. OK. Well, let's put that into context for
    the people. You are spending $73 million. That is your
    proposal. How much is in the trust fund?
        Ms. Horinko. I believe $1.7 billion.
        Senator Boxer. Correct. So the trust fund which is set
    aside specifically for cleaning up tanks, has $1.7 billion. You
    are suggesting $73 million, and in your opinion that is
    adequate.
        Ms. Horinko. It is certainly adequate, Madam Chairwoman,
    given all of the competing challenges that we have to face.
        Senator Boxer. Wait a minute. That fund is specifically--a
    trust fund--am I right, Mr. Stephenson?--to clean up these
    tanks.
        Mr. Stephenson. Right. For cleanup purposes.
        Senator Boxer. Isn't that what it is for?
        Mr. Stephenson. Yes.
        Senator Boxer. Can the money be used for other competing
    challenges?
        Mr. Stephenson. I do not believe so.
        Senator Boxer. No, it cannot. So what are you saying? You
    are saying that you support $73 million out of a $1.7 billion
    trust fund that is sitting there not being used, and you say
    that is adequate. Well, I couldn't disagree with you more on
    the point, and from what I gather, you are going to write us as
    to whether or not you support this bill, but you have just said
    that the President is spending enough. So clearly, you do not
    support the funding formula in that bill. Is that correct?
        Ms. Horinko. Well, we would be pleased to work with you on
    the appropriate funding level, Madam Chairwoman. I would note
    that this is the same funding level that Congress has enacted
    for the past 4 years.
        Senator Boxer. I am not being critical only of you, but you
    are advising us. You have the budget first. We react to the
    budget. Now, obviously Senator Chafee and I are going to work
    very hard with the Congress. That is not--that is our job to
    do. What I am asking you is what the Administration's position
    is in terms of a $1.7 billion trust fund. You have been clear--
    it is $73 million, and you want to work with me on the funding
    levels. I suggest you work with Senator Chafee, because I
    believe we need to do more since that is the point of the trust
    fund.
        I think the American people who live near this and the
    people of Santa Monica who have lost--is it half their drinking
    water supply?--half their drinking water supply. Senator Chafee
    has constituents that it closed down a town. And you are
    sitting on top of a trust fund you cannot spend the money any
    other way. You can't. You are not supposed to.
        Ms. Horinko. Well, Madam Chairwoman, if Congress in its
    sole discretion decides to change the funding for the program,
    we will certainly be pleased to direct it to the----
        Senator Boxer. That is not the issue. This bill is an
    authorizing bill that will put into law a new way of funding
    that will not leave it to the discretion of either you or us.
    It is going to say it is a formula base. So you cannot get out
    of it that way. The President will either have to sign the bill
    that we are going to pass, I hope, or veto the bill. So we need
    to know if the President believes that it is right to have a
    $1.7 billion trust fund for which you have taxed us in a box--
    if he thinks it is right, when the problem, as Mr. Stephenson
    defined it, and I just want to make sure I understand. It
    looked to me like he said there were 200,000 banks that had
    problems. Is that correct?
        Mr. Stephenson. That were not being operated or maintained
    properly, even if they had the equipment installed.
        Senator Boxer. Right. I loved your idea, which I do not
    know if Senator Chafee has it in his bill, that you could use
    some of the funding in the trust fund for enforcement and
    inspection. It is in his bill.
        Mr. Stephenson. It is in there.
        Senator Boxer. This is very important because under this
    Administration, the enforcement teams have been cut way back,
    so they do not have enough to do anything else, let alone this,
    because they have cut it back, and that is the priorities.
        So this, to me, is important. Speaking of promises made, I
    still have not heard from you on the number of Superfund sites
    that are not going to be cleaned up, and you pledged in front
    of this committee to tell us. When can I expect that? I want to
    know what sites are not going to be cleaned up.
        Ms. Horinko. Madam Chairwoman, I believe that my staff
    provided yesterday a current list of sites that are currently
    under consideration.
        Senator Boxer. I want to know what sites are not going to
    be cleaned up. We know the list of what is going to be cleaned.
    We know you are pulling back the number that was promised, and
    I believe it was 60--you gave us 47. Are we to assume the
    others are not being cleaned up?
        Ms. Horinko. The list that we gave you, I believe Madam
    Chairwoman, and I will need to check on this, is the list of
    sites that are potentially under consideration for funding
    decisions this year. We have not made those final decisions
    yet.
        Senator Boxer. When are you going to make the decisions on
    Superfund cleanup?
        Ms. Horinko. There are two checkpoints, Madam Chairwoman.
    We give the money out as the year rolls on because construction
    needs----
        Senator Boxer. Well, there are 4 more months left of this
    year.
        Ms. Horinko. We have one more checkpoint in May, and then
    actually there is a congressionally mandated holdback of $100
    million to September 1. So in August, we make the decision as
    to how that final $100 million will be allocated among our
    sites. So on September 1, we will have a firm decision as to
    what the final cleanup decisions are this year.
        Senator Boxer. Well, this is unacceptable to us, and we
    will not take the time of Senator Chafee's hearing now, but we
    need to get the documents. We need to know what sites are not
    being cleaned up and we need to know them right away. Now,
    yesterday I interviewed this very nice young man, Mr. Suarez,
    who is going to become Deputy Assistant Administrator for
    Enforcement. And he said he would do everything in his power to
    get us those names. Now, I need to tell people in communities,
    I say to my friend, who are expecting Superfund cleanup whether
    it is going to happen or it is not going to happen.
        I have to just say there is such a pattern in this
    Administration of simply not letting us know what is happening.
    I have served under a lot of presidents; been here a long time.
    I have not seen this before. I need to know. I need to tell
    people if they are going to have Superfund cleanup or they are
    not.
        So again, I reiterate that what you gave us is not
    adequate. What we will do is take what you gave us and we will
    send you personally a letter saying what is missing from here.
    But just to sum up on the leaking tanks, again, I cannot praise
    my colleague enough for recognizing the fact that nobody is
    doing enough on this--the Congress, the President. But that
    this particular proposal this year, given the fact that there
    are 200,000 problem sites, is woefully inadequate. I look
    forward to working with you on your bill.
        Senator Chafee.
        Senator Chafee. Thank you, Madam Chairwoman.
        If you think the Chairwoman is angry, you should have stood
    in front of the 1,200 people in Pascoag, RI that could not
    drink or cook. So it is a very, very important issue.
        I am curious just--your statement had so many favorable
    comments about the bill, yet it did not endorse it. Of course,
    ultimately, I would like to have the President's signature on
    it. It is not going to become law without it. What can we do?
    Where is the opposition to the bill? What can we do to improve
    it in order to get a favorable recommendation from EPA and,
    significantly, from the Administration?
        Ms. Horinko. Senator Chafee, my comments indeed reflect the
    fact that the Administration is very positive about many of the
    things that the bill does, particularly, flexibility in how we
    spend the money, that we can direct the trust fund money toward
    inspections, toward compliance, the focus on MTBE, which is
    indeed one of the greatest challenges facing the program. Those
    are all very positive things.
        The things that we have concerns about are indeed very
    minor. For example, the bill does require EPA and the States to
    put out a large number of guidance and regulations on very
    short timeframes, and we would like to work with you and your
    staff to see if we can perhaps provide some more reasonable
    timeframes for getting those regulations and guidance in place.
    Similarly, the bill does place a few restrictions on our
    ability to take compliance and enforcement actions, and we
    would like to work with you to make sure that we are as free to
    take those enforcement actions as we feel we need to be in the
    States as well.
        But overall, the Administration is very positive about the
    steps that the bill is taking in terms of attacking the new
    challenges that we face, particularly the MTBE contamination.
    We would be pleased to sit down and work with you about some of
    our concerns and how we can best address the funding
    constraints that we are facing dealing with the budget, both
    here in the Administration and on Capitol Hill in balancing all
    of the competing, the many pressing environmental priorities
    that we all face.
        Senator Chafee. Well, thank you very much. I am sure we
    will be working with you on that.
        Did your statement reflect those concerns? I know your
    entire statement was submitted for the record.
        Ms. Horinko. Yes, it does.
        Senator Chafee. OK, very good. Certainly, as Mr. Stephenson
    said in his statement, the ultimate enforcement is to prohibit
    delivery. We have had the instance in Rhode Island where it was
    a chronic abuser, and we knew there were problems with a
    service station, but without the hammer of being able to
    prohibit delivery of gas, the problem kept going on and on. So
    this is an important part of the bill is to have that element.
    I should think that would help EPA a lot to have that. Is that
    true? When you say one of your concerns is working out some of
    the timetables on enforcement, is not that ultimately extremely
    helpful to have this aspect of the bill?
        Ms. Horinko. Senator Chafee, the data that we are seeing so
    far in this delivery prohibition or red-tag provision is that
    this is indeed a very powerful tool, a very powerful incentive
    for owners and operators to maintain compliance. Some 20
    States, I believe, have this red-tag authority. They are
    finding it to be a very powerful tool. In extending that to all
    of the States as well as Federal EPA would indeed be in fact a
    powerful incentive for owners and operators to stay in
    compliance.
        Senator Chafee. Thank you very much.
        Mr. Stephenson, thank you very much also for the report,
    first of all, and for your testimony. You didn't seem to have
    any opposition to the bill--am I accurate in that?
        Mr. Stephenson. Yes.
        Senator Chafee. Well, very good.
        Thank you, Madam Chairwoman.
        Senator Boxer. Thank you so much.
        Ms. Horinko, I understand the city of Santa Monica is
    concerned that the oil companies and other responsible parties
    will not ensure a high enough level of cleanup in Santa Monica,
    given all the damage that has been done. What will EPA do to
    ensure Santa Monica's concerns are addressed in terms of the
    level of the cleanup?
        Ms. Horinko. Madam Chairwoman, I have personally been
    briefed on the Santa Monica cleanup during my trip to EPA's
    regional offices in San Francisco, and my regional project
    managers and regional attorneys are involved at a very hands-on
    level. In fact, it is unusual for Federal EPA to be involved
    this directly in an underground tank cleanup as the approach
    that we are taking with respect to the Santa Monica
    contamination. So my folks in Region IX are very concerned that
    we do the highest possible quality cleanup and that we do as
    much as we can to protect the drinking water in Santa Monica. I
    am proud to report that Region IX is probably our leading
    region in terms of enforcement capabilities and statistics. So
    you are being guarded by the best and the brightest of EPA's
    enforcement folks, and they will really keep a firm hand on the
    till.
        Senator Boxer. Could you get back to me on what EPA will do
    to ensure Santa Monica's concerns are addressed in terms of the
    level of the cleanup?
        Ms. Horinko. I will get back to you in writing on that.
        Senator Boxer. Thank you. Thank you very much, because we
    really would like to have that in writing.
        I want to thank both of you. I do not have any further
    questions, and I want to say to Mr. Stephenson, you did a
    tremendous public service with your work. I feel that, you
    know, there is an old expression, since we putting a lot of old
    expressions out, you know, what you don't see can't hurt you,
    but boy, these tanks--I mean, we are talking major hurt. So
    what you did was important and pointing out again to us that
    there is this trust fund. There isn't a money problem because
    there is a trust fund, and that is what it is there for. And
    for us to sit back and spend a tiny portion of that, and then
    say we are pleased, I just don't buy that. Maybe there are some
    members of Congress who feel that way. I hope now, because I
    think Senator Chafee, and with Senator Inhofe's support and my
    support, I mean, my potential support, I think we really have a
    chance to build a coalition and make a difference. So thank you
    both very much.
        We ask the next panel to come up--Mr. Craig Perkins, who is
    director of Environmental and Public Works Management for the
    city of Santa Monica in my home State; Mr. Grant Cope, staff
    attorney with the U.S. Public Interest Research Group; Kathleen
    Stiller, subcommittee chair for the Association of State and
    Territorial Solid Waste Management Officials. Ms. Stiller is
    with the Delaware Department of Natural Resources and
    Environmental Control in New Castle, DE. Mr. Arthur J. DeBlois
    III, president and CEO of DB Companies, Inc. in Providence, RI.
    He is appearing on behalf of the Society of Independent
    Gasoline Marketers of America and the National Association of
    Convenience Stores. Mr. Roger Brunner--is he here? Well, then I
    can't say it, he is not here. But if he does get here, he is
    the profits center manager at Zurich North America, East
    Lansing, MI.
        As I told Senator Chafee, I may have to duck out here for
    another hearing. I will stay as long as I can to hear all of
    you. So why don't we start with--I would love to have Santa
    Monica, and then if I have some questions, maybe I could ask
    them, and then I will turn the gavel over.
        Mr. Perkins, welcome.

       STATEMENT OF CRAIG PERKINS, DIRECTOR OF ENVIRONMENTAL AND
           PUBLIC WORKS MANAGEMENT, CITY OF SANTA MONICA, CA

        Mr. Perkins. Thank you. On behalf of the Mayor and the City
    Council of the city of Santa Monica, I want to thank you for
    the opportunity to give testimony today.
        First, I would like to share with you the key lessons we
    have learned from our rather painful experiences with
    underground storage tanks and MTBE in Santa Monica. We are a
    city of nearly 90,000 permanent residents and over 200,000
    daily visitors. The city depends heavily on groundwater for our
    drinking water supply. After many years of effort, by 1995 we
    had been able to maximize the use of local groundwater supplies
    and achieved 70 percent water self-sufficiency, and this is in
    a semi-arid climate. By using our sustainable local water
    resources, we were able to reduce our reliance on increasingly
    scarce imported water from northern California and the Colorado
    River.
        This all changed in 1996 when Santa Monica was hit with a
    drinking water catastrophe caused by MTBE. Within a 6-month
    period in 1996, MTBE forced Santa Monica to shut down most of
    its water wells. These wells accounted for one-half of the
    total daily supply in Santa Monica and we must now import more
    than 80 percent of our drinking water, putting further strain
    on California's already fragile water supply system. The
    effects of MTBE, as you well know, can be devastating. Once
    released from a tank or a pipeline, MTBE travels quickly and
    readily dissolves in water, unlike the other chemicals in
    gasoline. MTBE has an uncanny ability to find its way into
    drinking water wells. Although gasoline has been around for
    decades, it is only the relatively recent addition of MTBE that
    has caused widespread water contamination in Santa Monica and
    elsewhere.
        MTBE acts swiftly. Once discovered, MTBE levels in the
    city's wells rose more quickly than any other water contaminant
    we had ever encountered. MTBE strikes at the heart of public
    confidence in the safety of drinking water supplies. People
    will not drink water that smells and tastes like turpentine,
    nor should they.
        S. 1850 is a step in the right direction toward stricter
    oversight of underground storage tanks and freeing up
    additional financial resources to facilitate inspection,
    enforcement and corrective actions. However, based on our real-
    world experience in Santa Monica, we believe that S. 1850
    should go much farther in some key areas. First, the allocation
    of $200 million for corrective actions related to MTBE releases
    is far less than what will be needed to clean up the MTBE mess
    nationwide. The project cost just to clean up Santa Monica's
    main well field is over $200 million. Current estimates for
    total cost of nationwide MTBE cleanup are around $30 billion.
        Clearly, the cost for remediation of MTBE and other water
    contamination must ultimately be paid for by the polluter. But
    unfortunately, those companies responsible for causing the MTBE
    pollution in Santa Monica and many other communities have not
    yet stepped forward to do what is right. Until they do,
    significant financial assistance will be required to start the
    cleanup process. Second, let's make sure that we are doing
    everything that we can to keep underground storage tanks from
    leaking in the first place. Even the newest underground storage
    tanks leak, and the leaks are often not in the tank itself but
    in the piping that connects the tank to the fuel dispensing
    systems. A primary focus in S. 1850 needs to be placed on
    inspection, training, and enforcement. Too often in the past,
    operators of underground storage tanks have been able to act
    irresponsible because the threat of enforcement was remote or
    entirely nonexistent. Let's make sure that the tools and
    resources are in place so that noncompliant tanks are taken out
    of service and the public and the environment are better
    protected.
        Finally, nothing in S. 1850 should preclude Santa Monica,
    any State or any other local government from seeking legal
    redress, taking legal action or adopting regulations and
    performance standards with respect to underground storage tanks
    that are more stringent than Federal law. S. 1850 should ensure
    that all storage tank installations at Federal facilities are
    subject to the same requirements as everyone else. S. 1850
    should provide a floor, but should not hamper State or local
    governments from their efforts to protect human health and the
    environment, or pursue polluters.
        If S. 1850 incorporates these stronger provisions as
    suggested, it can become a very significant tool, not only to
    begin the cleanup of existing MTBE contamination, but to
    prevent future storage tank leaks as well. The two irrefutable
    facts that have emerged from Santa Monica's odyssey as the
    poster child of MTBE water contamination are, first,
    underground storage tanks leak; and second, it is extremely
    difficult to get polluters to pay for the cleanup of their
    pollution.
        Please strengthen this bill so that we will all have a
    better chance of not repeating the mistakes of the past, and we
    need to create better options, which is what this bill is
    about.
        I thank you for the privilege of testifying here today.
        Senator Boxer. Mr. Perkins, I want to thank you and use the
    privilege of the chair and the agreement from my ranking member
    to ask some questions, then turn the gavel over.
        I just want to thank you for your very focused testimony.
    Unfortunately, again California leads the way to this place--we
    did not want to. For example, we have two very well-known
    disasters from leaking tanks. Santa Monica is one, and Lake
    Tahoe is the other. Have you ever seen Lake Tahoe? You know
    magnificent it is. Well, we are looking at a minimum of $50
    million to clean up Lake Tahoe; $200 million to clean up Santa
    Monica. The GAO report said that in California, the estimate is
    that between 20 percent and 70 percent of tanks are in
    compliance, so that is a big jump, but even if it is as low as
    30 percent not in compliance, you are talking about huge
    numbers of potential catastrophes here.
        So let me just say, Mr. Perkins, that on this legislation
    where I am going to work very closely with my colleague and
    friend, and we do work closely on environmental issues, I am so
    glad that the three of us are here right now so that we can
    have this conversation. I just want to make sure I present what
    happened in Santa Monica in the right way.
        First, we have a town here that was 70 percent self-
    sufficient in drinking water. I am sure you could tell the same
    story, but in California, this is unheard of, in the south. It
    is all--water is imported because it never rains down there and
    it is just not done that often. And so to see them go from
    being 70 percent self-sufficient to now probably 100 percent
    not self-sufficient or close----
        Mr. Perkins. Yes, less than 20 percent.
        Senator Boxer [continuing]. Less than 20 percent--from 70
    percent to 20 percent is just a tragedy. We want to avoid that
    for other communities, because God knows we do not have enough
    clean drinking water anyway. So that is the first thing, so
    your bill is so important if it has that vision of getting to
    these problems before they erupt.
        Second, this MTBE nightmare of traveling fast, and being so
    astute at finding the point of least resistance to get into the
    water supply, the fact that it is so expensive to clean up--I
    want to work with my colleague on this because it seems to me
    that we might want to work together on a formula that says we
    will go up to the number you picked--you picked a $200 million
    number--or 75 percent of what is in the trust fund if the
    President deems an emergency with drinking water. In other
    words, the money is there. It is a question of how much we tap
    that fund. So if there was a way to leave the door open perhaps
    to tap that fund up to perhaps, I say 75 percent because you do
    not want to use the whole fund up. You want to save some for
    new emergencies. So that is a thought I have.
        You do address inspection, training and enforcement in the
    bill, is that correct? Which is excellent. I think that Mr.
    Perkins makes a point that as far as he is concerned, this is a
    major issue because if you take the tanks out of service, if
    you do a good enforcement, you find that instead of being
    cavalier about it, then you remove the problem. So that is
    really important. I do not think you do anything to stop legal
    redress, but that is important. I don't think you do anything
    on that. Is that--you are silent on that. So that is not an
    issue in the bill.
        So I just want to thank you very, very much, and I just had
    one question, dealing with my question to Ms. Horinko. Are you
    fully satisfied with EPA in the region, that they are holding
    the responsible parties' feet to the fire in terms of the level
    of cleanup? Or do you have some concern? Was I off the wall in
    asking that question, or was it right to ask the question?
        Mr. Perkins. That is a very good question. We waited a
    long----
        Senator Boxer. What, the question that I asked her? Or the
    question I am asking you about the question I asked her? OK.
        Mr. Perkins. Both are important.
        Senator Boxer. Good.
        Mr. Perkins. We waited a long time for people to do the
    right thing in Santa Monica, meaning the people that caused the
    pollution. We worked with oil companies and tried to reach a
    voluntary settlement. That did not happen. We filed a lawsuit
    about a year and a half ago. Within the last 6 months, we made
    a critical decision in terms of how we were going to move
    forward. What we decided is that we were not going to wait for
    the oil companies or the EPA to decide what was in our best
    interests in terms of how to clean up our water. We were going
    to take control of the situation ourselves. We are moving
    forward with a plan for designing and permitting and building a
    treatment facility which will treat all of the water in the
    groundwater basin, not just part of it which is what the oil
    companies wanted to do, and we will treat it faster, rather
    than waiting for years and years and years, which is the
    cheapest way for the contamination to be cleaned up. If we do
    not do that, what we are going to get is the path of least
    resistance, the path of the least impact on the bottom line of
    the polluting companies, and Santa Monica does not find that
    acceptable. So we are going to take control of our destiny and
    make sure it is done right. The EPA does not necessarily agree
    with that right now, but we are moving forward.
        Senator Boxer. So the EPA does not necessarily agree with
    that, is what you are telling me.
        Mr. Perkins. That is right.
        Senator Boxer. But you are working on them?
        Mr. Perkins. We are doing what needs to be done,
    regardless.
        Senator Boxer. OK.
        Mr. Perkins. We have the authority to do that.
        Senator Boxer. Which is your point you made to Senator
    Chafee about making sure that we do not do anything unwittingly
    in the bill that would cause us to do a lesser cleanup. I think
    that is important.
        Well, let me just say, as soon as I receive the letter from
    Ms. Horinko, and I hope she does it faster than she did the one
    on Superfund, but we will work with her. We get that letter
    outlining what they are doing to ensure the highest level--can
    I share it with you? At that point, if she does not come in
    where you are coming in on this, I will take it up with them
    because I do not want you out there having to pay all this, and
    to be out all this, because it is not right. So we will work
    together.
        I want to thank my colleague for writing this bill, for
    focusing our attention on this important issue. I am real proud
    to serve with him, and I will turn over the gavel to you, and
    do not take too much advantage of it, Mr. Chafee.
        [Laughter.]
        Senator Boxer. Let's not hold an election for who is going
    to be the committee chair and all that right now. I have your
    word.
        Senator Chafee. You do.
        Senator Boxer. OK, then I trust you. Very good.
        Senator Chafee. We are of the opposite parties, after all.
        Senator Boxer. That is right. Keep that in mind.
        Senator Chafee. What was the cleanup cost, before I go on
    with the rest of the panel, when you say to implement this
    cleanup that you wanted to do that was in some dispute with
    EPA? What is the cost? In your testimony it was $200 million,
    you said that?
        Mr. Perkins. Over $200 million, and that is essentially a
    conservative estimate. The treatment facility will have to
    operate a minimum of 20 years in Santa Monica, and we are
    hoping it is only 20 and not 40. It is hard to say.
        Senator Chafee. How will you pay for it, just out of
    curiosity?
        Mr. Perkins. We do not know. We are hoping that by the time
    it is ready to be constructed, about 2 or 3 years down the
    road, that we will have money from the companies that caused
    the pollution, but we will have to cross that bridge when we
    are at that point.
        Senator Boxer. And from your bill.
        Senator Chafee. Yes, that will help.
        Senator Boxer. Which will be the law.
        Senator Chafee. Can you pinpoint the guilty party? Have you
    done that?
        Mr. Perkins. This is probably perhaps the scariest element
    in our experience. In our main well field, what we did is we
    drew a 1-mile radius around the well field. Within that 1-mile
    radius, we found 22 separate gasoline stationsites that had
    documented releases of gasoline over the previous 10 years. So
    in narrowing down those potential candidates, we now have a
    list of about 10 to 12 sites within a 1-mile radius of our well
    field, and those are the most likely sources of the
    contamination. In one of those sites, we believe that as much
    as 50,000 gallons of gasoline leaked before the leaks were
    stopped.
        Senator Chafee. In one of them?
        Mr. Perkins. Just one site.
        Senator Chafee. It sounds to me like the guilty party.
        We will move right on with Mr. Grant Cope, staff attorney
    for the U.S. Public Interest Research Group. Welcome, Mr. Cope.

     STATEMENT OF GRANT COPE, STAFF ATTORNEY, U.S. PUBLIC INTEREST
                             RESEARCH GROUP

        Mr. Cope. Thank you, Senator Chafee.
        I would like to thank the committee for holding a hearing
    on S. 1850 and for examining the issues related to improving
    the leaking underground storage tank program.
        I will address three issues today. First, I will briefly
    outline the main threats posed by leaking underground storage
    tanks. Second, I will highlight the main areas where Federal
    legislation is needed to increase protections against these
    threats. And third, I will discuss how S. 1850 incorporates,
    fails to incorporate, or could potentially weaken key
    protections.
        First, leaking underground storage tanks present a serious
    threat to public health and environmental quality. States and
    EPA acknowledge that leaking underground storage tanks are the
    No. 1 potential source of groundwater contamination in the
    country. Of course, 50 percent of the country relies on
    groundwater for drinking water, and virtually 100 percent in
    some rural areas do as well.
        The main contaminant leaking from underground storage tanks
    is gasoline, which actually has about 150 chemicals in it,
    including benzine and toluene. Benzine is a recognized
    carcinogen and reproductive and developmental toxicant. Toluene
    is a recognized development toxicant and is suspected of also
    adversely impacting the cardiovascular system, immune system,
    respiratory system and reproductive systems.
        Congress amended RCRA to create the Federal Underground
    Storage Tank Program to address these types of threats. After
    20 years, available data demonstrate that the program is not
    adequately dealing with the threats caused by leaking
    underground storage tanks. U.S. PIRG supports Federal
    legislation that increases protections against pollution from
    leaking underground storage tanks.
        Such legislation should include five key points:
    strengthening Federal and State enforcement authorities;
    increasing the frequency and thoroughness of inspections; a
    waiver of Federal sovereign immunity at facilities; augmenting
    existing resources for the UST programs; and vigorously
    incorporating the polluter pays principle. Conversely, U.S.
    PIRG opposes legislation that weakens existing protections,
    including EPA's authority to order cleanups of contamination.
    U.S. PIRG would urge the subcommittee to consider modifications
    to certain aspects of S. 1850 that fail to maintain or increase
    protections for public health. I will highlight five key areas
    right now. No. 1, S. 1850 could constrain EPA's authority to
    issue cleanup orders. U.S. PIRG opposes such constraints.
    Leaking underground storage tanks represent a threat to public
    health. The subcommittee should not sanction constraints on
    EPA's ability to protect the public from dangerous
    contamination.
        No. 2, U.S. PIRG supports S. 1850's requirement to increase
    the frequency of inspections. However, consistent with the
    information contained in GAO's 2001 report, S. 1850 should
    require periodic physical inspections of tanks. This is
    critically important.
        No. 3, U.S. PIRG urges the subcommittee to incorporate an
    unambiguous waiver of sovereign immunity related to penalties
    and order authority at Federal facilities. Federal facilities
    put the same cancer-causing materials into the tanks as do
    private citizens. Therefore, they should be subject to the same
    penalties and cleanup provisions as are private citizens.
        No. 4, U.S. PIRG urges the subcommittee to actually
    increase the resources going into the Leaking Underground
    Storage Program. S. 1850 contains decreasing authorization in
    later years and this is contrary to the needs of the program as
    outlined in the GAO report. To the extent that GAO is holding
    resources in reserve that could and should be spent to increase
    protections currently, we would also vigorously urge the
    subcommittee to direct EPA to do so.
        No. 5, U.S. PIRG supports the polluter pays principle as a
    tool for creating disincentives for pollution, conserving
    limited public resources, and shifting costs onto entities that
    are closely associated with contamination. The U.S. PIRG
    opposes sections of S. 1850 that could prohibit EPA cost
    recovery actions or result in polluters paying decreased
    penalties. After 20 years, tank owners and operators should
    understand that if the tanks leak dangerous contamination, EPA
    can and will hold them accountable.
        In conclusion, we look forward to working with the
    committee to increase protections against one of the greatest
    threats to the Nation's groundwater supplies, that of leaking
    underground storage tanks.
        Thank you.
        Senator Chafee. Thank you, Mr. Cope. That is why we have
    hearings, to hear constructive criticism. Thank you, the point
    is very well made.
        Now we will hear from Ms. Kathleen Stiller, Delaware
    Department of Natural Resources and Environmental Control.
    Thank you, Ms. Stiller. Welcome.

     STATEMENT OF KATHLEEN STILLER, DELAWARE DEPARTMENT OF NATURAL
                  RESOURCES AND ENVIRONMENTAL CONTROL

        Ms. Stiller. Good afternoon. My name is Kathleen Stiller
    and I am representing the Association of State and Territorial
    Solid Waste Management Officials. I will focus on four issues
    of special importance to State program managers in my summary
    remarks. I ask that the subcommittee accept our full written
    testimony for the hearing record.
        Senator Chafee. Without objection. Ms. Stiller. The first
    issue is funding. While S. 1850 represents increased workloads
    for States and does authorized increased funding, it does not
    necessarily appropriate increased funding. Without the
    increased funding, States would be unable to do the work. Even
    with increased funding, given State revenues, personnel
    restrictions and hiring freezes at the current time, there are
    some concerns that we may not be able to do the work.
        The second issue is inspections and enforcement. The bill
    requires that inspections every 2 years be done for every
    facility. This may not be practical for all States. In fact,
    States may find that increased inspections with increased
    followup and enforcement have a positive impact on compliance
    rates and the severity of violations. However, they would like
    the option to schedule inspections dependent on the location of
    the tanks by a priority system, that those tanks in areas that
    are more environmentally sensitive and pose more risk to human
    health or public safety be inspected more frequently than those
    of a lower risk.
        States need the flexibility to use all the enforcement
    tools provided in this bill and in other statutes that States
    have. The incentives in performance appear to limit somewhat
    the use of some enforcement tools for States by requiring that
    they consider the compliance history of the violator. The
    States would like to have that enforcement authority without
    restrictions.
        Red-tagging is something that States generally support as
    being added as an option for enforcement tools. However, we
    need to recognize that some States need to do legislative or
    regulatory changes to obtain that authority, and this provision
    should not be linked nor should any of the provisions be linked
    to program approval for States. Many States have just an
    equivalent program, although they do not have a program
    approval from EPA.
        The third issue is operator training. This is a resource-
    intensive program, given the turnover rate of operators for
    facilities. States should be required to provide this training.
    Such options as third-party providers would be beneficial, and
    States do recognize this is as important aspect of the program
    and would help the prevention aspects of the Underground
    Storage Tank Program. However, we would like the flexibility to
    design a program such as a third-party provider with a
    certification that the operator has attended the training, to
    allow the flexibility of delivery and also the flexibility of
    funding, as it is often difficult for States to introduce new
    fees and obtain new funding for programs that require
    resources.
        Our fourth and final issue is MTBE. This is a groundwater
    cleanup issue in States and they are handling it with regard to
    the cleanups. The funding in this bill will help with some
    cleanups. However, as we heard from the gentleman from Santa
    Monica, it may not cover many of the sites we have out there.
    We need to ensure that the entire UST system is designed to
    prevent releases, not just the part of the system that
    routinely contains product, as this has been seen to be an
    issue in many States.
        In closing, while States agree that increased inspections
    followup enforcement and operator training will positively
    impact compliance rates, resources are needed to support these
    efforts. States also see a need for prioritization of
    inspections based on the environmental sensitivity of a site
    and the type of tanks at a site. A prioritization system would
    allow States to focus their resources on areas of concern to
    the State, rather than meeting a blanket requirement. Further,
    States are concerned that even if resources are provided,
    current restrictions at the State level may inhibit the use of
    the resources to meet the inspection and operator training
    requirements.
        Thank you for requesting our testimony regarding this
    important legislation. I would be happy to respond to any
    questions you might have regarding our views.
        Senator Chafee. Thank you very much, Ms. Stiller.
        Welcome, Mr. DeBlois from the great State of Rhode Island,
    representing the National Association of Convenience Stores and
    the Society of Independent Gasoline Marketers.

       STATEMENT OF ARTHUR J. DeBLOIS III, PRESIDENT AND CEO, DB
        COMPANIES INC., REPRESENTING THE SOCIETY OF INDEPENDENT
     GASOLINE MARKETERS OF AMERICA AND THE NATIONAL ASSOCIATION OF
                           CONVENIENCE STORES

        Mr. DeBlois. Thank you, Senator, other members of the
    subcommittee.
        My name is Arthur J. DeBlois. I am the president of DB
    Companies, Incorporated. We are an independent petroleum
    marketer based in Providence, RI. We operate 86 DB Marts in a
    four-State area--Rhode Island, Massachusetts, Connecticut, and
    the Hudson Valley in New York. We also have an additional 84
    franchise operating units.
        Thank you for inviting me to testify today on S. 1850, the
    Underground Storage Tank Compliance Act. As you indicated, I am
    representing the National Association of Convenience Stores,
    NACS, and the Society of Independent Gasoline Markets of
    America, or SIGMA. NACS and SIGMA have been longstanding and
    vocal advocates for vigorous enforcement of all Federal and
    State underground storage tank, or UST, regulations.
        With respect to Federal and State regulations of petroleum
    USTs, NACS and SIGMA have three key objectives: first, ensure
    that an adequate percentage of funds appropriated from the
    Leaking Underground Storage Tank Trust Fund, or LUST Fund, is
    delivered to the State UST programs for proper regulatory
    enforcement and remediation assistance; second, ensure all UST
    owners and operators, including governmental agencies,
    commercial operators and Native American tribes, are held to
    the same standards as the industry and comply with existing UST
    regulations; and finally, to facilitate the prompt remediation
    of releases from USTs.
        NACS and SIGMA support key elements of your bill, S. 1850,
    because the bill is consistent with these objectives. According
    to the Bush Administration's fiscal year 2003 budget, the LUST
    Trust Fund will have a balance at the end of 2002 of just over
    $1.9 billion. Trust fund tax collections this year from people
    such as myself will be over $193 million, and the fund is going
    to earn an additional $113 million in interest. Despite this
    huge balance, the Bush Administration has followed the policy
    of previous Administrations and is only calling for an
    appropriation of $73 million for fiscal year 2003. This is less
    than the amount of interest earned by the fund.
        Given the media attention to UST leaks over the past 5
    years, which has focused particularly on MTBE contamination of
    groundwater, the continued level of low appropriations from the
    trust fund is inexplicable. NACS and SIGMA urge this committee
    to use its influence to increase substantially the fiscal year
    2003 appropriations from the LUST Fund. Previous witnesses this
    afternoon have detailed the May 2001 GAO study and its
    recommendations. NACS and SIGMA support fully those
    recommendations and note that many of them are reflected in
    your bill, S. 1850.
        The legislation is supported by a bipartisan group of
    cosponsors--Senators Jeffords, Smith, Inhofe, Reed and Warner--
    and if enacted, would lead to important reforms in the Federal
    LUST Fund program. These are, require a minimum of 80 percent
    of the funds appropriated from the trust fund be delivered to
    the States; permit States to use the trust fund moneys to
    enforce the 1998 UST deadline; require all regulated USTs to be
    inspected every 2 years; and require States to develop UST
    operator training programs based on EPA guidelines. I think Ms.
    Stiller's idea of having these administered by third parties or
    certified people in a company is a great idea. Also require
    States and Federal agencies to submit to EPA a strategy to
    ensure that all tanks operated by Federal, State and local
    governments comply with existing regulations; require EPA to
    issue regulations to authorize EPA or the States to prohibit
    deliveries of fuel into noncomplying tanks. We are in favor of
    red-tagging. In fact, Massachusetts, as you are aware, has a
    compliance system that allows you to do that. Authorize $200
    million for the remediation of MTBE releases and authorize a
    total of $460 million in appropriations from the trust fund.
        NACS and SIGMA strongly support S. 1850 with one suggested
    amendment. We consider this amendment to be very important in
    achieving the goals of the legislation, that is to ensure
    strong enforcement and quick remediation of UST leaks. As
    introduced, S. 1850 limits the use of LUST Trust Fund moneys by
    State UST reimbursement funds to situations where the UST owner
    or operator would face financial hardships but for the
    reimbursement. I can tell you unequivocally this provision
    encourages noncompliance by UST owners and operators. We
    believe that elimination of this limitation would expedite UST
    cleanups and would leverage the limited tank remediation funds
    currently available at the State level.
        There is a misplaced perception that eliminating the
    limitation in S. 1850 would send millions of dollars back to
    the major oil companies. NACS and SIGMA do not believe this is
    the case. In most instances, the major oil companies were the
    first people to replace their tanks to the 1998 requirements.
    Quite frankly, they have received the bulk of any moneys that
    would be due them under the State insurance funds for the
    cleanup expenses that they have incurred.
        UST owners and operators are more likely to initiate and
    complete tank cleanups if they know that after they pay the
    deductible amount of the up-front fee, they are going to
    receive timely reimbursement for their cleanups. Stated
    differently, if reimbursements become stretched out over a
    longer period of time, the UST owner or operator has an
    incentive to slow down the pace of their cleanups. I am
    personally aware of marketers in our industry who have made
    just such a decision because of the uncertainty of timely
    reimbursement and the company's cash-flow constraints. Thus,
    limiting the UST LUST Fund moneys by State reimbursement funds
    will do nothing to maintain the pace of corrective actions.
        NACS and SIGMA appreciate this opportunity to present their
    views on USTs and S. 1850. We look forward to working with the
    committee on UST legislation and urge the committee to move
    this bill expeditiously. I would be happy to answer any
    questions my testimony may have raised.
        Thank you.
        Senator Chafee. Thank you very much, Mr. DeBlois.
        Mr. Brunner, welcome.
        Mr. Brunner. Thank you, sir.
        Senator Chafee. Mr. Brunner represents the Profits Center
    and is the manager.

      STATEMENT OF ROGER BRUNNER, PROFITS CENTER MANAGER, ZURICH
                             NORTH AMERICA

        Mr. Brunner. Ranking Member Chafee, my name is Roger
    Brunner and I serve as a vice president with Zurich North
    America Specialties Business Unit. Zurich North America is a
    unit of Zurich Financial Services Group, the third-largest
    provider of property and casualty insurance in the United
    States.
        My role in the organization is the management of our
    business that provides environmental insurance for petroleum
    storage tanks. Today, Zurich North America is the leading
    provider of storage tank environmental insurance in the United
    States, insuring tens of thousands of petroleum storage tanks,
    which is significantly more than any other private insurer. We
    have been insuring petroleum storage tanks for leakage for
    approximately 10 years and we have paid to clean up thousands
    of leaking underground and above-ground storage tanks.
    Therefore, legislation that impacts the operations and risk
    management practices of petroleum storage tanks significantly
    impacts our business.
        I am here this afternoon to voice support for the passage
    of the Underground Storage Tank Compliance Act of 2001, Senate
    bill 1850. The highly efficient localized storage and delivery
    of petroleum is currently a fundamental component of our
    American lifestyle and economy, and we expect localized
    petroleum storage to continue for the foreseeable future.
    Because the delivery of petroleum as a fuel source is such a
    highly efficient, low-margin business for petroleum
    distributors and represents such a low-cost product for
    businesses, public entities and consumers, we sometimes lack
    respect for the extreme complexity required for safely
    operating our petroleum storage and delivery system. In short,
    we take it for granted.
        It is truly amazing that his volatile and potentially
    dangerous liquid can be extracted from deep beneath the surface
    of our planet, transported across the planet, processed in
    highly technical refineries, then transported, blended and
    stored locally. Even more amazingly, this vital product is then
    sold to organizations and individuals for comparatively less
    than a comparable amount of your favorite fountain soft drink.
    The combination of the low-cost storage and delivery of
    petroleum and the potentially significant damage by petroleum
    releases to human health and the environment create the need
    for Senate bill 1850.
        This legislation is important. We believe that it will
    improve the environmental safety of the local storage and
    delivery of petroleum. Unfortunately, our experiences
    demonstrate the need for this bill. Too often, inadequate
    training procedures or technical appreciation for complex
    monitoring devices leads to otherwise avoidable petroleum
    leaks. For example, last week, I reviewed a case in the mid-
    Atlantic with my claims department that involved a petroleum
    retail location that had not appropriately tracked their
    inventory and did not know that they were missing over 10,000
    gallons of fuel. Imagine if this operator really understood and
    executed the requirements expected if it stopped the release at
    100 gallons instead of 10,000. The environmental contamination
    would have been limited, the damage would have been limited,
    and thousands of dollars, hundreds of thousands of dollars in
    cleanup costs would have been saved.
        Or in a classic example of the need for enhanced training,
    I highlight the case in the Midwest where a local operator
    taped up the miscalibrated electronic release detection system
    that kept flashing and making noises. Apparently, this complex
    electronic system had issued earlier false warnings and was
    viewed somewhat like the boy that cried wolf once too often.
    Unfortunately, when the piping joint came apart for the system
    and there was a real release, no one paid attention until it
    was too late.
        The last personal observation I will cite is a hospital in
    the Southeast that was not sure who was responsible for keeping
    track of the compliance obligation for its generator's diesel
    tanks. Because the hospital's mission is patient care, their
    priority was naturally to make sure just simply that the tank
    was full in case fuel was needed due to a power outage for
    their emergency generator. This important and quite expected
    priority on patient care, and the lack of focus on storage tank
    compliance, missed the fact that a long, slow petroleum leak
    was occurring, thus causing significant environmental damage.
        Each of these examples are real-life claims submitted to
    Zurich North American. Each was the result of poor training
    compliance programs, and a significant amount of damage caused
    by each was avoidable.
        That is why we believe that Senate bill 1850 if enacted
    will have a significant impact on the risk management practices
    of petroleum tank operators in the United States. By requiring
    and funding storage tank system compliance inspections at least
    every 2 years and improving the training of regulated facility
    operators, Senate bill 1850 will go a long way toward ensuring
    a better prepared and more technically proficient operator
    base. As a significant stakeholder, we believe that this is an
    appropriate utilization of the LUST Trust Fund.
        Zurich North America urges immediate passage of this
    legislation. We believe that as long as local storage and
    delivery of petroleum are part of the fabric of our lives,
    environmental problems will occur. However, we believe that
    over several years, the implementation of Senate bill 1850 will
    help reduce the number of underground storage tank-related
    environmental and human health problems and it will be even
    more effective in reducing the severity of these problems that
    do occur in the future.
        I applaud you for introducing such legislation and I look
    forward to working with you in the weeks and months to come.
        Senator Chafee. Thank you very much, Mr. Brunner.
        You have all been very terrific at contributing to this
    bill. Now, we go forward on it. I don't really have any
    questions. I would just ask Mr. DeBlois, is that on the
    frontlines with the people, hiring the people, I know it is an
    industry that traditionally has a great deal of turnover. I
    know DB Marts probably less so than your competitors, but what
    is it like to have the employees come in who are going to be in
    charge of listening to these bells and whistles that might go
    off if there is a leak, and making sure that they do the right
    thing, even if the funds are there, in a business that might
    have more turnover than perhaps others, of employees. Your
    testimony did not cite that as a hardship for your industry,
    but I am just curious as to what that would be like.
        Mr. DeBlois. I think Mr. Brunner's point is well made, and
    the requirement for a training program. Most of the responsible
    operators today, Senator, already have some type of a training
    program. Quite frankly, the industry would welcome a standard
    set of guidelines that would lay out exactly what people
    believe the appropriate training mechanisms are going to be,
    and input from people like Zurich or others that are familiar
    with the devices is very welcome. We have no problem with the
    training program. We do it with our employees. It is costly. We
    do have turnover. But before somebody gets behind a cash
    register in one of our locations, they have basically gone
    through about 2 weeks of training not only on just how to
    operate the store, but what the equipment in the store is.
        You have to realize that when I put a manager and an
    employee behind a counter, I am giving them control of an asset
    that probably has a price tag on it between land, buildings,
    equipment and everything of well over $1 million. So it is in
    my best interest to make sure that it is being properly
    operated. But things like Mr. Brunner cites do happen, and a
    training program I think that is industry-wide and required by
    everybody will go a long way toward helping the industry. But
    more importantly, it is going to help the hospital, the local
    fire department, the commercial operator whose job it is not to
    do that, so they tend not to pay attention to the devices that
    they had to put there, even though they have got a significant
    investment in them.
        Senator Chafee. Very good. Thank you very much all for
    coming some long distances. The testimony is very appreciated.
        The hearing is concluded.
        [Whereupon, at 3:14 p.m., the subcommittee was adjourned,
    to reconvene at the call of the chair.]
        [Additional statements submitted for the record follow:]

          Statement of Hon. Bob Smith, U.S. Senator from the State of
                                 New Hampshire

        I want to express my gratitude to the Chair for holding this
    hearing and to the witnesses for sharing their expertise with the
    committee today. I especially want to thank my friend from Rhode
    Island, Senator Chafee, for his strong leadership on the issue of
    underground storage tanks. In 2000, Senator Chafee and I asked the
    General Accounting Office (GAO) to assess the current Underground
    Storage Tank program and the level of compliance with Federal
    standards. What GAO found, outlined in a report released 1 year ago
    this month, was that among other deficiencies, only 71 percent of tanks
    were operated and maintained according to standards. In response to the
    GAO report, I joined Senators Chafee, Inhofe, Jeffords and Carper in
    introducing S. 1850--the subject of today's hearing. This bill responds
    to the many deficiencies identified in the GAO report. S. 1850 takes
    several needed steps to help Federal, State and local officials to
    clean up and prevent further contamination caused by leaking
    underground storage tanks. The bill increases inspections and training,
    with an emphasis on compliance. It also provides the funding necessary
    to meet the new requirements set out in the legislation. S. 1850 will
    help to ensure that our groundwater will not become contaminated
    because of inadequate maintenance or operation of the Nation's
    underground storage tanks. It my hope that this hearing will give this
    legislation the boost it needs to move through the legislative process.
        The bill also addresses a specific type of gasoline additive
    contamination that has hit New Hampshire hard--MTBE. This bill provides
    $200 million to clean up MTBE contamination. Having visited with a
    number of families and small business owners who have suffered from
    MTBE pollution, I can tell you that these resources will go a long way
    to rid many of the MTBE nightmare. I am grateful that this provision
    has been included in the bill. I know that Senator Chafee's home State
    of Rhode Island has also suffered from MTBE contamination, and we will
    be hearing from a witness today describing their battle with this gas
    additive. By ensuring better compliance and improved underground
    storage tank integrity, we will reduce the amount of MTBE that will
    find its way into our water. But we need to go further and ban MTBE.
    This committee and the Senate have done just that. Both this Congress
    and last, this committee has passed my legislation that would ban MTBE
    and cleanup contamination caused by the gas additive, without
    backsliding on air quality. I was very pleased that the energy package
    the Senate passed recently included my bill to deal with MTBE. It is my
    hope that the House of Representatives will agree to ban this
    substance. It is important to my constituents in New Hampshire and to
    the entire Nation that the poisoning of our groundwater stops.
        S. 1850 also provides the opportunity to pass a narrow, but
    important petroleum liability provision. While currently not included
    in the bill, this provision would be helpful to spur cleanup and
    redevelopment where contamination does exist. I look forward to working
    with my fellow cosponsors, and all members of the committee, in
    exploring this additional provision.
        Once again, I want to thank the Chair for holding this hearing and
    I look forward the testimony of our witnesses.

                                   __________
     Statement of Marianne Lamont Horinko, Assistant Administrator, Office
     of Solid Waste and Emergency Response, U.S. Environmental Protection
                                     Agency

        Good morning Madam Chairman and members of the subcommittee, I am
    Marianne Horinko, EPA's Assistant Administrator for the Office of Solid
    Waste and Emergency Response. I am pleased to appear today to discuss
    S. 1850, the Underground Storage Tank Compliance Act of 2001, identify
    some of the challenges facing the Underground Storage Tank (UST)
    Program, and describe work EPA has undertaken to address those
    challenges.

                                   BACKGROUND

        In 1984, Congress responded to the increasing threat to groundwater
    posed by leaking USTs by adding Subtitle I to the Resource Conservation
    and Recovery Act (RCRA). The statute directed EPA to develop a
    comprehensive regulatory program for USTs storing petroleum or certain
    hazardous substances to protect the environment and human health from
    UST releases. EPA's 1988 regulations set minimum standards for new
    tanks and required owners of substandard tanks to upgrade or close
    them. The regulations addressed a variety of other requirements
    including those related to leak detection and cleanup of releases when
    they occur.
        In 1986, Congress created the Leaking Underground Storage Tank
    (LUST) Trust Fund to provide a stronger funding base for the cleanup
    portion of the underground storage tank program. The LUST Trust Fund
    provides money for EPA to help administer the program nationwide and
    implement the program in Indian Country. In 1998, Congress also created
    explicit authority for EPA to provide LUST funding to federally
    recognized Indian tribes. The majority of the LUST Trust Funds are
    provided to the States to oversee cleanups, take enforcement actions at
    leaking tank sites, and undertake State-lead cleanups when a
    responsible party cannot be found or is unable or unwilling to
    remediate a site which presents a threat to public health and the
    environment. EPA provides approximately 81 percent of the annual LUST
    Trust Fund appropriation to the States. Since the inception of the LUST
    Trust Fund, States have received approximately $790 million.
        Since its inception in the mid-1980's, EPA's UST program has
    developed an extremely effective partnership with States to implement
    the program. From the outset, this program was designed to be
    implemented primarily by States. In general, all States implement an
    underground storage tank program using grants and cooperative
    agreements from EPA. Twenty-nine States, Puerto Rico and the District
    of Columbia have been formally approved by EPA to operate their UST
    programs in lieu of the Federal UST program. EPA retains the authority
    to implement and enforce the State's UST program in authorized States
    and to implement and enforce the Federal program in unauthorized
    States. EPA implements and enforces the program in Indian Country where
    EPA works closely with Indian tribes. EPA continues to work with other
    States to help them have their programs formally approved. In many
    respects, the successes achieved by this program are due to
    partnerships, not only with States and tribes, but also with the
    private sector. We believe the UST program's effective partnerships can
    serve as a model for other programs.

                                PROGRAM PROGRESS

        As EPA established the UST program, it faced some unique challenges
    including the immense regulated universe of over 2 million USTs. Many
    of these USTs were old, made of bare steel, and subject to corrosion.
    Since the inception of the program, EPA and the States have made
    substantial progress. Over 1.5 million substandard USTs have been
    closed. As a result of the closures, these UST systems are no longer
    sources of additional contamination. There are now approximately
    705,000 active USTs, nearly all of which have the required leak
    detection and prevention equipment. Additionally, States report that
    approximately 75 percent of these USTs are operated and maintained
    correctly.
        EPA and States have made substantial progress in cleaning up
    releases from leaking USTs. Since the inception of the program,
    approximately 419,000 petroleum releases from USTs have been reported.
    Much progress has already occurred in cleaning up releases. Cleanups
    have been initiated for 379,000 (over 90 percent) of these releases and
    cleanups have been completed for about 269,000 (approximately two-
    thirds) of the releases. This represents a tremendous amount of work
    and success by the States, tribes, EPA, responsible parties and cleanup
    contractors. Among the major factors affecting this success are the
    cleanup funds States have established. These funds, which raise and
    expend approximately $1 billion annually, pay for the vast majority of
    site assessments and remediation each year.
        We have also made considerable progress reducing the number of new
    releases. Since 1990, the number of new releases reported annually has
    averaged approximately 30,000. In fiscal year 2001, the number of new
    releases reported dropped to approximately 6,500. While this represents
    a dramatic improvement, it is still too many.

                               PROGRAM CHALLENGES

        While substantial progress has been made since the mid-1980's,
    there are additional challenges that still need to be addressed. First,
    while many releases have been cleaned up, there are still approximately
    150,000 where the cleanup has not been completed including releases
    with methyl tertiary-butyl ether (MTBE) contamination. Second, there
    are hundreds of thousands of abandoned USTs, many of which have had
    releases that need to be addressed. Third, while USTs have been
    improved and generally are operated and maintained properly,
    approximately 25 percent of the UST systems still need to be brought
    into compliance and all UST systems need to be operated and maintained
    properly so that once they are in compliance, they remain in
    compliance. And finally, while UST systems are greatly improved and the
    number of new releases has dramatically reduced, there are still
    releases from new and upgraded systems.
        The first challenge is the large number of releases--150,000--that
    are not yet cleaned up. While substantial progress has been made on
    many of these releases, there still is an immense amount of work that
    remains to be done to increase the pace at which cleanups are
    completed, and reduce and ultimately eliminate this backlog of
    releases.
        The vast majority of regulated USTs contain petroleum products that
    contain toxic substances, such as benzene, toluene, and naphthalene.
    Therefore, releases from USTs may pose both human health and
    environmental risks. Further, the presence of MTBE makes the challenge
    of cleaning up these releases more difficult, because MTBE is more
    likely to reach groundwater than other petroleum constituents, and once
    it does, can make the water unpotable due to its unpleasant taste and
    odor.
        MTBE contamination has affected communities across the country. For
    example, the city of Santa Monica, CA has faced a massive loss of a
    significant portion of its drinking water supplies due to MTBE
    contamination caused by failures of UST systems. Lake Tahoe has faced
    similar problems. In Long Island, New York, MTBE contamination has
    resulted in alternate or improved water supplies having to be provided
    for over 160 affected public and private wells. Pascoag, RI, while
    smaller in size than Santa Monica, Lake Tahoe or Long Island, has also
    lost its water supply. More recently, attention has turned to a release
    in Roselawn, IN. In this case, the source of the release, which may be
    from an UST system, has not yet been identified.
        MTBE contamination from all sources, including USTs, is fairly
    widespread. A 2001 U.S. Geological Survey study found that MTBE was
    detected in 9 percent of community water systems in 10 States, although
    generally below EPA's drinking water advisory value. A national study
    by the New England Interstate Water Pollution Control Commission in
    2000 found that most States detect MTBE at 60 to 80 percent of leaking
    UST sites. Based on an analysis of data from 31 States, a report in
    Environmental Science & Technology (May 2000) estimated that up to
    9,000 community water supplies in those 31 States may be threatened by
    MTBE contamination.
        The second challenge we face is finding, removing and, where
    necessary, cleaning up abandoned USTs. The General Accounting Office
    (GAO) estimated there are approximately 200,000 abandoned USTs at
    brownfields sites. In addition, there are many abandoned USTs at sites
    that have not been designated as brownfields sites. The workload
    associated with abandoned tanks, many of which have not yet been found,
    probably exceeds that of dealing with the backlog of known release
    sites that have yet to be cleaned up.
        Preventing releases before they occur is the best way to protect
    human health and the environment. The remaining challenges focus on
    preventing and rapidly detecting releases before they become problems.
        The third challenge involves compliance with the UST regulations.
    In a recent report, Improved Inspections and Enforcement Would Better
    Ensure the Safety of Underground Storage Tanks, the GAO estimated that
    approximately 29 percent of USTs were not operated or maintained
    properly. While the vast majority of USTs have the proper equipment,
    proper operation and maintenance remains a considerable challenge.
    Owners and operators of USTs normally have many responsibilities which
    compete with the time necessary to properly operate and maintain their
    UST systems. The challenge here is to help all owners and operators to
    achieve compliance and maintain it through ongoing proper operation and
    maintenance of their UST systems. We will do this using all available
    tools including compliance assistance, training, inspections, and
    enforcement.
        Finally, as we have already noted, new and upgraded UST systems
    continue to have releases, although at a much reduced rate. There is
    also evidence releases are not being detected by the existing leak
    detection infrastructure as often as they should be. The Federal
    requirements set basic UST system performance standards, but allow a
    wide variety of approaches to meet those standards. While that provides
    significant flexibility to the tank owners, it also complicates efforts
    to operate, maintain, and inspect UST systems. If the equipment is
    insufficient or the operation and maintenance of the equipment is not
    performed correctly, there will continue to be significant risk posed
    by releases from USTs. Our challenge is to determine the source and
    cause of the problems, and identify the appropriate remedies.

                 PROGRAM INITIATIVES TO ADDRESS THE CHALLENGES

        In October 2000, EPA announced four initiatives to address the
    challenges facing the program: (1) Faster Cleanups, (2) USTfields for
    Abandoned Tanks, (3) Improving Compliance, and (4) Evaluating UST
    System Performance. In addition, the Agency has taken additional
    actions to deal with the challenges posed by MTBE. Before turning to
    the four initiatives, let's briefly examine some of the work that deals
    with MTBE.
        EPA has undertaken several efforts to aid States in addressing
    problems with MTBE contamination. EPA has provided substantial funding
    and/or technical support to Santa Monica, South Lake Tahoe and Long
    Island to remediate MTBE. In addition, EPA is chairing a Federal-State
    workgroup that will create a multi-chapter interim guidance for States
    on MTBE related issues. Two years ago, EPA supported a grant to the New
    England Interstate Water Pollution Control Commission to develop a
    national baseline survey on the scope of the MTBE problem. EPA also
    maintains a website which documents MTBE remediation case studies so
    that experiences with MTBE remediation can be shared nationwide. EPA is
    also conducting a demonstration of treatment and remediation
    technologies for MTBE-contaminated soil, groundwater and drinking water
    at Port Hueneme, CA.

                                FASTER CLEANUPS

        The goal of our first initiative, Faster Cleanups, is to increase
    the pace at which cleanups, including those with MTBE contamination,
    are initiated and completed, with an eye toward making land and water
    resources available for reuse. To accomplish this goal, EPA is
    finalizing a method for setting goals for completing cleanups more
    quickly. EPA has also recently created a web-based toolbox for
    promoting pay-for-performance contracting methods which in most cases
    shortened cleanup times and reduced cleanup costs by 30 to 50 percent.
    Finally, EPA plans to foster the development of voluntary multi-site
    cleanup agreements between State or Regional EPA programs and private,
    Federal, or tribal owners of multi-site leaking underground storage
    tanks. The economies of scale in developing multi-site agreements
    should help achieve faster cleanups.

                                   USTFIELDS

        Our second initiative, dealing with USTfields, is designed to
    address abandoned USTs. USTfields applies to abandoned or underused
    industrial and commercial properties where reuse is complicated by real
    or perceived environmental contamination from federally regulated USTs.
    Petroleum contamination is generally excluded from coverage under the
    Comprehensive Environmental Response, Compensation, and Liability Act
    and is not, therefore, covered under EPA's current brownfields program.
    EPA has undertaken the USTfields initiative to address petroleum
    contamination from abandoned tanks generally excluded from brownfields
    reuse. In November 2000, EPA announced its first 10 USTfield pilot
    grants. A recently released report, Recycling America's Gas Stations,
    captures the experiences from the first 10 pilots. These pilots are
    intended to help increase our knowledge of finding out how best to
    address abandoned and underused petroleum-impacted sites. EPA expects
    to announce an additional 40 USTfield grants later this spring.
        In January 2002, President Bush signed the ``Small Business
    Liability Relief and Brownfields Revitalization Act'' into law. Under
    this legislation, substantially more funding is authorized to deal with
    abandoned petroleum contaminated sites that are not addressed under
    current programs. The President's budget requests $30 million to carry
    out this effort. This legislation will enable States, tribes, and
    communities throughout the country to assess, remediate, and ready for
    reuse a multitude of sites that otherwise would remain abandoned for
    many years. The USTfield pilots will provide invaluable lessons as we
    deal with many abandoned sites under the new legislation.

                                   COMPLIANCE

        Our third initiative focuses on improving compliance with the UST
    requirements. EPA and our State and tribal partners are constantly
    working to improve compliance. As part of this initiative, we are
    taking several specific steps. First, we have changed the way we are
    measuring compliance to focus on proper operation and maintenance.
    Previously, we focused primarily on whether the facility had the proper
    equipment. As part of this initiative, we are improving the quality of
    compliance data so that EPA, States, and the public have an accurate
    and consistent measure of compliance. Second, we are looking at a
    variety of approaches, including third-party inspections and
    environmental results programs, such as the one in Massachusetts being
    used to improve compliance by dry cleaners, printers and photo
    finishers, to help improve compliance. Third, EPA is promoting multi-
    site compliance agreements between EPA and multi-site owners to bring
    their tanks into operational compliance. Finally, EPA is focusing
    additional attention on training needs, both for inspectors and for
    owners and operators. We are nearing completion of an evaluation of
    training needs. And we are working to increase training opportunities
    through a variety of institutions, including universities, and are
    exploring increased use of internet-based training.

                             UST SYSTEM PERFORMANCE

        The fourth initiative, Evaluating UST System Performance, is an
    effort to determine the sources and causes of releases, as well as the
    reasons for the failure of release detection to detect releases, and to
    develop approaches to address these problems. To evaluate the
    performance of UST systems, EPA needed to gather and review
    quantitative and qualitative data currently available, and to initiate
    additional studies to gather additional quantitative data. EPA gathered
    and analyzed more than 50 existing reports or studies from States and
    industry and has met with or interviewed numerous State and industry
    experts. In order to obtain greater quantitative information about the
    types of systems failing and the reasons for those failures, EPA is
    partnering with 24 States to perform leak autopsies at new release
    sites to determine the source and cause of the release. EPA is also
    initiating studies with a number of States to evaluate specific UST
    system components and technologies and to compare the performance of
    various UST systems. EPA has learned much from these efforts about the
    sources and causes of problems, and there are clear trends emerging
    from these efforts.
        EPA's evaluation of UST system performance has confirmed that new
    and upgraded UST systems still have releases and those releases are
    often not properly detected. We have identified faults with most
    components of UST systems, including the design, installation,
    operation, and maintenance of the various components. Many of the
    problems appears to be caused by human error or oversight--including
    failure to test and maintain corrosion protection and leak detection
    systems--but problems with the actual equipment is also of concern.
    Piping continues to be the leading cause for concern. Spills and
    overfills during product delivery also continue at an unacceptable rate
    and releases from dispensers have emerged as a major concern. Since
    most UST systems in operation are still single-walled, a failure of
    these UST systems will lead to a release directly into the environment.
    And when a release does occur, the existing release detection
    infrastructure is failing to adequately detect releases from tanks and
    pipes, and is, in fact, not even designed to detect most spills and
    overfills or dispenser releases. Also, the release detection
    infrastructure is by design reactive, only detecting releases after
    they enter the environment, unless a system is secondarily contained
    with interstitial monitoring. Finally, there is emerging evidence that
    vapor releases from new and upgraded UST systems are common, and
    released vapors--including MTBE--can find their way into the
    groundwater.
        It is important to note that the current generation of UST systems
    is significantly more protective than the previous generation, but a
    number of problems remain. More work needs to be done to further
    understand the sources and causes of problems and to identify
    appropriate remedies. As part of this work, we will be collecting
    additional data. We will also increase our discussions with States and
    the regulated community to further examine these issues and to discuss
    potential solutions to the problems and challenges that still face us.
    This remains a significant priority for EPA.
        In summary, Madam Chairman, we believe very substantial progress
    has been made on a variety of UST challenges including closing
    substandard USTs, improving compliance, and cleaning up releases.
    Nevertheless, the amount of work, especially in light of MTBE
    contamination, remaining to be accomplished is also substantial. We
    look forward to working with Congress, States, and our other partners
    to address the work before us.

            S. 1850--UNDERGROUND STORAGE TANK COMPLIANCE ACT OF 2001

        I would like to commend Senators Chafee, Carper, Smith, Jeffords
    and Inhofe for introducing S. 1850, the Underground Storage Tank
    Compliance Act of 2001, which would help prevent and cleanup releases
    from USTs. The Agency has been reviewing the legislation and continues
    to analyze specific provisions. While we do not have an official
    Administration position on the bill, I have some thoughts I would like
    to share.
        First of all, I appreciate the subcommittee's recognition of the
    importance of preventing and cleaning up UST releases. While tremendous
    progress has been made over the past decade there are still substantial
    challenges and risks posed by USTs, as I have outlined in this
    testimony. More specifically, the focus on remediating MTBE
    contamination is both timely and appropriate. As I have discussed, MTBE
    poses challenges to communities throughout the country. There are
    thousands of releases containing MTBE that still need to be addressed,
    and this will be a continuing challenge for EPA, its State and tribal
    partners, and the regulated community.
        Preventing future releases is equally important and I also commend
    the subcommittee on its efforts to provide more tools and resources to
    make that happen. S. 1850's focus on inspection frequency and improving
    operator training is appropriate and could go a long way toward
    ensuring UST systems are properly managed to reduce the risk of
    releases.
        Section 6 of S. 1850 has several important provisions. One of these
    provisions deals with delivery prohibition programs. Approximately 20
    States have some form of delivery prohibition program. While these
    programs vary from State-to-State, many States have found these
    effective in promoting compliance with the UST requirements. This tool
    could be extremely valuable to those States that do not currently have
    delivery prohibition programs and to the Federal Government.
        The legislation expands the eligible uses of LUST funding. This
    would give increased flexibility to both States and EPA to direct our
    resources to the most pressing needs. For example, we could use LUST
    funding for inspections and enforcement to ensure compliance with the
    preventive requirements. Since unique factors affect many States, the
    flexibility will prove particularly important to deal with State-
    specific issues.
        The legislation also places increased emphasis on operator
    training. We believe this is extremely important to ensure proper
    operation and maintenance of UST systems. Some States, including
    California, are already taking steps to ensure proper operator
    training. Given the high turnover in facility personnel, ensuring
    proper training for all UST operators is particularly challenging. To
    meet this challenge will take considerable effort by the regulated
    community, States, and EPA.
        While there are many provisions in S. 1850 that would strengthen
    the current UST program, there are provisions that need further
    clarification or could have the unintended effect of hindering UST
    program progress. We would be pleased to work with you and your staff
    to discuss these issues and concerns with the funding authorization
    levels in more detail.
        I again commend the subcommittee for focusing on the challenges
    facing the UST program and for supporting efforts to protect our
    citizens from risks posed by leaking USTs. I look forward to working
    closely with the Environment and Public Works Committee and Congress as
    it continues deliberations on the bill.

                                   __________
           Statement of John Stephenson, Director, Natural Resources
                                and Environment

        Madam Chairwoman and members of the subcommittee, I am pleased to
    have this opportunity to come before you today to discuss our May 2001
    report on the Environmental Protection Agency's (EPA) Underground
    Storage Tank (UST) program.\1\ The report relates directly to the topic
    of today's hearing--the proposed Underground Storage Tank Compliance
    Act of 2001 (S. 1850)--that is consistent with many of the suggested
    program improvements found in our report. The timing of the legislation
    and hearing is critical. Recent studies have shown that tanks that leak
    hazardous substances, such as methyl tertiary butyl ether (MTBE),
    contaminate the soil or water and continue to pose health risks ranging
    from nausea to kidney or liver damage or even cancer. Indeed, leaks of
    MTBE--a fuel additive for reducing emissions and raising octane--have
    been found in drinking water sources and several communities have now
    had to close their wells. For example, a school in Roselawn, IN,
    discovered that the children had been using and drinking water with 10
    times EPA's recommended safe limit.
    ---------------------------------------------------------------------------
        \1\ Environmental Protection: Improved Inspections and Enforcement
    Would Better Ensure the Safety of Underground Storage Tanks (GAO-01-
    464, May 4, 2001).
    ---------------------------------------------------------------------------
        The Congress in 1984 created the UST program to protect the public
    from potential leaks from the then more than 2 million tanks located
    across the Nation, mostly at gas stations. Under the program, EPA
    required tank owners to install new leak detection equipment by the end
    of 1993 and new spill-, overfill-, and corrosion-prevention equipment
    by the end of 1998. If these conditions were not met, owners had to
    close or remove their tanks. In general, EPA has granted States the
    authority to implement the program with Agency oversight and
    monitoring, or States operate their own program under State law with
    limited EPA oversight. EPA has provided States funding (about $187,000
    per State) for doing so. EPA retains authority for a small number of
    tanks primarily located on Indian lands. In addition, the Congress
    created a trust fund in 1986 to help EPA and the States cover tank
    cleanup costs that owners and operators could not afford or were
    reluctant to pay. The fund is replenished partly through a $.001/gallon
    tax on gasoline and other fuels. At the end of fiscal year 2001, the
    fund had a balance of about $1.7 billion.
        Because the States are primarily implementing the provisions of the
    program, in October 2000, we conducted a survey of all 50 States and
    the District of Columbia to determine whether tanks are complying with
    program requirements, how EPA and the States are inspecting tanks and
    enforcing the requirements, and whether upgraded tanks still leak. We
    also visited the three EPA regions with the largest number of tanks to
    monitor. In summary, we found that:
         About 1.5 million tanks had been permanently closed since
    the program was created, leaving about 693,000 tanks subject to UST
    requirements. Based on the States' responses to our survey, we
    estimated that about 89 percent of these tanks had the required
    protective equipment installed, but that almost 30 percent of them--
    more than 200,000 tanks--were not being operated and maintained
    properly, thus, increasing the chance of leaks. For example, 19 States
    reported frequent problems with corrosion--prevention equipment and 15
    States reported that leak detection equipment was frequently turned off
    or improperly maintained. The States and EPA attributed these operation
    and maintenance problems primarily to poorly trained staff. Of the
    remaining 11 percent, or 76,000, tanks that we estimated had not been
    retrofitted with the required equipment, EPA and the States speculated
    that the tanks were probably inactive and empty. Nevertheless, it is
    important to address them because experience has shown that they may
    have leaked in the past, but the contamination, which poses health
    risks, is not discovered until the tank is dug up for removal. However,
    most States and EPA do not know if all inactive tanks are empty--and we
    could not verify the accuracy and completeness of the compliance data
    they reported--because they do not physically inspect all tanks.
         In fact, over half of the States do not inspect all of
    their tanks frequently enough to meet the minimum rate recommended by
    EPA--at least once every 3 years. In addition, 27 States lack the
    authority to prohibit fuel deliveries to stations with problem tanks--
    one of the most effective tools for ensuring compliance with program
    requirements--relying instead on issuing citations and fines. States
    said that they did not have the money, staff, or, authority to conduct
    more inspections or more strongly enforce tank compliance.
         Finally, States reported that even tanks with the required
    leak prevention and detection equipment installed continue to leak,
    although the full extent of the problem is not known. In response to
    our survey, 14 States reported some tank leaks, 17 States said their
    tanks seldom or never leaked, and 20 States did not know if leaks
    occurred before the tanks were upgraded. EPA and some localities have
    studies underway to obtain better data on leaks from upgraded tanks.
    EPA, as part of a set of four program initiatives it announced in
    October 2000, is also considering whether it needs to set new tank
    requirements, such as double-walled tanks, to prevent further leaks.
        To address these problems, our report recommends that EPA work with
    the States to determine training needs and ways to fill them, and to
    more specifically address the estimated 76,000 tanks that have not yet
    been upgraded, closed, or removed as required. Our report also contains
    recommendations to EPA and suggestions to the Congress on ways to
    promote better inspections and enforcement and to address related
    resource shortfalls by expanding the use of the $1.7 billion trust fund
    designated for tank cleanup to also cover additional inspection and
    enforcement activities. The proposed legislation is consistent with
    many of the program improvements that we suggested.

       MOST TANKS HAVE BEEN UPGRADED, BUT MANY ARE NOT PROPERLY OPERATED
                                 AND MAINTAINED

        Based on State responses to our survey, we estimated that nearly
    617,000, or about 89 percent of the approximately 693,000 regulated
    tanks, had been upgraded with the federally required equipment by the
    end of fiscal year 2000. EPA data showed that about 70 percent of the
    total number of tanks that its regions regulate on tribal lands had
    also been upgraded.
        With regard to the approximately 76,000 tanks that we estimated
    have not been upgraded, closed, or removed as required, 17 States and
    the 3 EPA regions we visited reported that they believed that most of
    these tanks were either empty or inactive. However, another five States
    reported that at least half of their non-upgraded tanks were still in
    use. EPA and States assume that the tanks are empty or inactive and
    therefore pose less risk. As a result, they may give them a lower
    priority for resources. However, States also reported that they
    generally did not discover tank leaks or contamination around tanks
    until the empty or inactive tanks were removed from the ground during
    replacement or closure. Consequently, unless EPA and the States address
    these non-compliant tanks in a more timely manner, they may be
    overlooking a potential source of soil and groundwater contamination.
        Even though most tanks have been upgraded, we estimated from our
    survey data that more than 200,000 of them, or about 29 percent, were
    not being properly operated and maintained, increasing the risk of
    leaks. The extent of operations and maintenance problems varied across
    the States, as figure 1 illustrates.

    [GRAPHIC] [TIFF OMITTED] T3685.001

        The States reported a variety of operational and maintenance
    problems, such as operators turning off leak detection equipment. The
    States also reported that the majority of problems occurred at tanks
    owned by small, independent businesses; non-retail and commercial
    companies, such as cab companies; and local governments. The States
    attributed these problems to a lack of training for tank owners,
    installers, operators, removers, and inspectors. These smaller
    businesses and local government operations may find it more difficult
    to afford adequate training, especially given the high turnover rates
    among tank staff, or may give training a lower priority. Almost all of
    the States reported a need for additional resources to keep their own
    inspectors and program staff trained, and 41 States requested
    additional technical assistance from the Federal Government to provide
    such training.
        To date, EPA has provided States with a number of training sessions
    and helpful tools, such as operation and maintenance checklists and
    guidelines. One of EPA's tank program initiatives is also intended to
    improve training and tank compliance with Federal requirements, such as
    setting annual compliance targets with the States. The Agency is in the
    process of implementing its compliance improvement initiative, which
    involves actions such as setting the targets and providing incentives
    to tank owners, but it is too early to gauge the impact of the Agency's
    efforts on compliance rates.

    MOST STATES DO NOT MEET EPA'S RECOMMENDATION TO INSPECT ALL TANKS EVERY
     3 YEARS OR HAVE THE ENFORCEMENT TOOLS NEEDED TO IDENTIFY AND CORRECT
                                    PROBLEMS

        According to EPA's program managers, only physical inspections can
    confirm whether tanks have been upgraded and are being properly
    operated and maintained. However, only 19 States physically inspect all
    of their tanks at least once every 3 years--the minimum that EPA
    considers necessary for effective tank monitoring. Another 10 States
    inspect all tanks, but less frequently. The remaining 22 States do not
    inspect all tanks, but instead generally target inspections to
    potentially problematic tanks, such as those close to drinking water
    sources. In addition, not all of EPA's own regions comply with the
    recommended rate. Two of the three regions that we visited inspected
    tanks located on tribal land every 3 years. Figure 2 illustrates the
    States' reported inspection practices.

    [GRAPHIC] [TIFF OMITTED] T3685.002

        According to our survey results, some States and EPA regions would
    need additional staff to conduct more frequent inspections. For
    example, under staffing levels at the time of our review, the
    inspectors in 11 States would each have to visit more than 300
    facilities a year to cover all tanks at least once every 3 years, but
    EPA estimates that a qualified inspector can only visit at most 200
    facilities a year. Moreover, because most States use their own
    employees to conduct inspections, State legislatures would need to
    provide them additional hiring authority and funding to acquire more
    inspectors. Officials in 40 States said that they would support a
    Federal mandate requiring States to periodically inspect all tanks, in
    part because they expect that such a mandate would provide them needed
    leverage to obtain the requisite inspection staff and funding from
    their State legislatures.
        In addition to more frequent inspections, a number of States stated
    that they need additional enforcement tools to correct problem tanks.
    EPA's program managers stated that good enforcement requires a variety
    of tools, including the ability to issue citations or fines. One of the
    most effective tools is the ability to prohibit suppliers from
    delivering fuel to stations with problem tanks. However, as figure 3
    illustrates, 27 States reported that they did not have the authority to
    stop deliveries. In addition, EPA believes, and we agree, that the law
    governing the tank program does not give the Agency clear authority to
    regulate fuel suppliers and therefore prohibit their deliveries.

    [GRAPHIC] [TIFF OMITTED] T3685.003

        Almost all of the States said they need additional enforcement
    resources and 27 need additional authority. Members of both an expert
    panel and an industry group, which EPA convened to help it assess the
    tank program, likewise saw the need for States to have more resources
    and more uniform and consistent enforcement across States, including
    the authority to prohibit fuel deliveries. They further noted that the
    fear of being shut down would provide owners and operators a greater
    incentive to comply with Federal requirements.
        Under its tank initiatives, EPA is working with States to implement
    third party inspection programs, using either private contractors or
    other State agencies that may also be inspecting these business sites
    for other reasons. EPA's regions have the opportunity, to some extent,
    to use the grants that they provide to the States for their tank
    programs as a means to encourage more inspections and better
    enforcement. However, the Agency does not want to limit State funding
    to the point where this further jeopardizes program implementation. The
    Congress may also wish to consider making more funds available to
    States to improve tank inspections and enforcement. For example, the
    Congress could increase the amount of funds it provides from the
    Leaking Underground Storage Tank trust fund, which the Congress
    established to specifically provide funds for cleaning up contamination
    from tanks. The Congress could then allow States to spend a portion of
    these funds on inspections and enforcement. It has considered taking
    this action in the past, and 40 States said that they would welcome
    such funding flexibility.

        SOME TANKS CONTINUE TO LEAK EVEN AFTER THEY HAVE BEEN UPGRADED,
                 ALTHOUGH THE EXTENT OF THIS PROBLEM IS UNKNOWN

        In fiscal year 2000, EPA and the States confirmed a total of more
    than 14,500 leaks or releases from regulated tanks, although the Agency
    and many of the States could not verify whether the releases had
    occurred before or after the tanks had been upgraded. According to our
    survey, 14 States said that they had traced newly discovered leaks or
    releases that year to upgraded tanks, while another 17 States said they
    seldom or never detected such leaks. The remaining 20 States could not
    confirm whether or not their upgraded tanks leaked.
        EPA recognizes the need to collect better data to determine the
    extent and cause of leaks from upgraded tanks, the effectiveness of the
    current equipment, and if there is a need to strengthen existing
    equipment standards. The Agency has launched studies in several of its
    regions to obtain such data, but it may have trouble concluding whether
    leaks occurred after the upgrades. In a study of local tanks,
    researchers in Santa Clara County, CA, concluded that upgraded tanks do
    not provide complete protection against leaks, and even properly
    operated and maintained tank monitoring systems cannot guarantee that
    leaks are detected. EPA, as one of its program initiatives, is working
    with the States to gather data on leaks from upgraded tanks in order to
    determine whether equipment requirements need to be strengthened, such
    as requiring double-walled tanks. The States and the industry and
    expert groups support EPA's actions.
        In closing, the States and EPA cannot ensure that all regulated
    tanks have the required equipment to prevent health risks from fuel
    leaks, spills, and overfills or that tanks are safely operated and
    maintained. Many States are not inspecting all of their tanks to make
    sure that they do not leak, nor can they prohibit fuel from being
    delivered to problem tanks. EPA has the opportunity to help its regions
    and States correct these limitations through its tank initiatives, but
    it is difficult to determine whether the Agency's proposed actions will
    be sufficient because it is just defining its implementation plans. The
    Congress also has the opportunity to help provide EPA and the States
    the additional inspection and enforcement authority and resources they
    need to improve tank compliance and safety.
        Therefore, to better ensure that underground storage tanks meet
    Federal requirements to prevent contamination that poses health risks,
    we have made a number of recommendations to the EPA administrator,
    including that the Agency:
        1. Work with the States to address the remaining non-upgraded
    tanks, such as reviewing available information to determine those that
    pose the greatest risks and setting up timetables to remove or close
    these tanks.
        2. Supplement the training support it has provided to date by
    having each region work with each of the States in its jurisdiction to
    determine specific training needs and tailored ways to meet them.
        In addition, we suggested several actions that the Congress may
    want to consider to help the program, which have been incorporated in
    the proposed legislation. Such actions include efforts to determine
    whether to increase the program's resources, for example, by increasing
    the amount of funds it appropriates from the trust fund and allowing
    States to spend a limited portion on training, inspection, and
    enforcement activities, as long as cleanups are not delayed. In
    addition, we suggested that the Congress consider (1) authorizing EPA
    to require physical inspections of all tanks on a periodic basis, (2)
    authorizing EPA to prohibit fuel deliveries to tanks that do not comply
    with Federal requirements, and (3) requiring that States have similar
    authority to prohibit fuel deliveries.

                                   __________
     Statement of Craig Perkins, Director of Environment and City of Santa
                                   Monica, CA

        On behalf of the Mayor and City Council of the city of Santa
    Monica, I want to thank you for the opportunity to give testimony on S.
    1850. First, I would like to share with you today the key lessons we
    have learned from our painful experiences with underground storage
    tanks and MTBE in Santa Monica. Santa Monica is a city of nearly 90,000
    permanent residents and over 200,000 daily visitors. The city depends
    heavily on groundwater for its drinking water supply. After many years
    of effort, by 1995 we had been able to maximize the use of local
    groundwater supplies and achieve 70 percent water self-sufficiency. By
    using our sustainable local water resources we were able to reduce our
    reliance on increasingly scarce water imported from northern California
    and the Colorado River. This all changed in 1996 when Santa Monica was
    hit with a drinking water catastrophe caused by MTBE. Within a 6-month
    period in 1996 MTBE forced Santa Monica to shut down most of its water
    wells. These wells accounted for one-half of the total daily water
    supply in Santa Monica and we must now import more than 80 percent of
    our drinking water, putting further strain on California's already
    fragile water supply system. The effects of MTBE can be devastating:
         Once released from a tank or pipeline, MTBE travels
    quickly and readily dissolves in water unlike the other chemicals in
    gasoline;
         MTBE has an uncanny ability to find its way into drinking
    water wells. Although gasoline has been around for decades, it is only
    the relatively recent addition of MTBE that has caused widespread water
    contamination in Santa Monica and elsewhere;
         MTBE attacks swiftly. Once discovered, MTBE levels in the
    city's wells rose more quickly than any other water contaminant we had
    ever encountered; and
         MTBE strikes at the heart of public confidence in the
    safety of drinking water supplies. People will not drink water that
    smells and tastes like turpentine, nor should they be expected to.
        S. 1850 is a step in the right direction toward stricter oversight
    of underground storage tanks and freeing up of additional financial
    resources to facilitate inspection, enforcement and corrective actions.
    However, based on our ``real world'' experience in Santa Monica we
    believe that S. 1850 should go much farther in some keys areas.
        First, the allocation of $200 million for corrective actions
    related to MTBE releases is far less than what will be needed to clean
    up the MTBE mess nationwide. The projected cost to just cleanup Santa
    Monica's main well field is over $200 million. Current estimates for
    the total cost of nationwide MTBE clean-up are around $30 billion.
    Clearly, the costs for remediation of MTBE and other water
    contamination must ultimately be raid for by the polluter. But,
    unfortunately, those companies responsible for ceasing the MTBE
    pollution in Santa Monica and many other communities have not yet
    stepped forward to do what's right. Until they do, significant
    financial assistance will be required to start the clean-up process.
        Second, let's make sure we are doing everything that we can to keep
    that underground storage tanks from leaking in the first place. Even
    the newest underground storage tanks leak, and the leaks are often not
    in the tank itself but in the piping that connects the tank to the fuel
    dispensing systems. A primary focus in S. 1850 needs to be placed on
    inspection, training and enforcement. Too often in the past, operators
    of underground fuel tanks have been able to act irresponsibly because
    the threat of enforcement was remote or even nonexistent. Let's make
    sure that the tools and resources are in place so that non-compliant
    tanks are taken out of service and the public and environment are
    better protected.
        Finally, nothing in S. 1850 should preclude any State or local
    government from seeking legal redress, taking legal action or adopting
    regulations and standards of performance with respect to underground
    storage tanks that are more stringent than Federal law, and S. 1850
    should ensure that all underground storage tank installations at
    Federal facilities are subject to the same requirements as everyone
    else. S. 1850 should provide a floor, but should not hamper State or
    local governments in their efforts to either protect human health and
    the environment or pursue polluters.
        If S. 1850 incorporates the stronger provisions suggested above, it
    can become a very significant toot to not only begin the cleanup of
    existing MTBE groundwater contamination but to prevent future storage
    tank leaks as well.
        The two irrefutable facts that have emerged from Santa Monica's
    odyssey as the ``poster child'' for MTBE water contamination are: (1)
    underground storage tanks leak; and (2) it is extremely difficult to
    get polluters to pay for the cleanup of their pollution. Please
    strengthen S. 1850 so that we will all have a better chance of not
    repeating the mistakes of the past. We need to create better options,
    which is what S. 1850 is about. Thank you for the privilege of
    testifying before your subcommittee today.

                                   __________
      Statement of Grant Cope, on Behalf of U.S. Public Interest Research
                                     Group

                                   I. SUMMARY

        I would like to thank Senator Boxer for holding a hearing on the S.
    1850, and examining the issues related to improving the Leaking
    Underground Storage Tank program (``UST''). We would also like to thank
    the Senator for allowing us to submit testimony on this issue. Leaking
    underground storage tanks present a serious threat to public health and
    environmental quality. The current Federal program, which most States
    implement through their own programs, is not inadequately addressing
    threats posed by underground storage tanks. Federal legislation is
    needed to strengthen Federal and State enforcement authorities,
    increase the frequency of inspections, expand pollution prevention
    efforts, waive sovereign immunity at Federal facilities, and augment
    existing resources to ensure that Federal and State UST programs
    protect public health and the environment. U.S. PIRG opposes any
    legislation that weakens existing protections, including EPA's
    authority to order the cleanup of contamination.

     II. LEAKING UNDERGROUND STORAGE TANKS PRESENT A SIGNIFICANT THREAT TO
                                 PUBLIC HEALTH

        Groundwater is a fundamental resource for human life and economic
    vitality in our Nation. Fifty percent of the people in the United
    States use groundwater for drinking water, including virtually 100
    percent of people in many rural areas.\1\ In 29 States, over 50 percent
    of the population rely on groundwater for drinking water.\2\
    ---------------------------------------------------------------------------
        \1\ EPA, Safe Drinking Water Act, Section 1429 Groundwater Report
    To Congress, EPA-816-99-016, ii (1999).
        \2\ Id, at 4.
    ---------------------------------------------------------------------------
        Leaking underground storage tanks present significant risks to
    groundwater quality, and therefore to human health, environmental
    quality, and economic growth. To address the risks posed by leaking
    underground storage tanks, Congress amended the Resources Conservation
    and Recovery Act in 1982 to create a program that would cleanup
    contamination related to underground storage tanks, and prevent future
    contamination. Despite Congress's creation of the UST program, leaking
    underground storage tanks continue to present serious threats to public
    health and the environment.
        As of February 28, 1999, there were about 390,000 releases from
    regulated underground storage tanks.\3\ These releases present serious
    threats to public health and environmental quality. Many State and
    Federal agencies rank leaking underground storage tanks as the most
    prominent source of groundwater contamination. For example, 37 States
    listed leaking underground storage tanks the No. 1 ``major source of
    groundwater contamination.''\4\ EPA found that leaking underground
    storage tanks are one of the sources most frequently cited as being of
    greatest concern as a potential source of groundwater contamination.\5\
    ---------------------------------------------------------------------------
        \3\ Id, at 16.
        \4\ EPA, National Water Quality Inventory, 1998 Report To Congress,
    EPA 816-R-00-013, 8 (2000).
        \5\ Supra, Note 3.
    ---------------------------------------------------------------------------
        Gasoline leaking from underground storage tanks is one of the most
    common sources of groundwater contamination.\6\ Gasoline contains more
    than 150 chemicals, including benzene, toluene, and automotive
    gasolineylene.\7\ Benzene is a recognized carcinogen, and reproductive
    and developmental toxicant.\8\ Toluene is a recognized developmental
    toxicant, and is suspected of also adversely impacting the
    cardiovascular, immune, respiratory, and reproductive systems.\9\ These
    chemicals, and many other held in underground storage tanks threaten
    public health.
    ---------------------------------------------------------------------------
        \6\ Id.
        \7\ Agency for Toxic Substances and Disease Registry, ToxFaqs Fact
    Sheet on Automotive Gasoline, 1 (1996).
        \8\ Scorecard, downloaded on May 6 at http://www.scorecard.org/
    chemical-profiles/.
        \9\ Scorecard, downloaded on May 6 at http://www.scorecard.org/
    chemical-profiles/.
    ---------------------------------------------------------------------------
    A. Many States That Depend On Groundwater For Drinking Water Have A
            High Number Of Leaking Tanks
        EPA has ranked states based on the number of confirmed releases
    from underground storage tanks.\10\ EPA ranked States in three tiers:
    (1) Tier One included States with 10,001 to 34,000 confirmed releases;
    (2) Tier Two included States with 5,001 and 10,000 confirmed releases;
    and (3) Tier Three included State with 0 to 5,000 confirmed releases.
    As will be discussed later, these numbers could be an underestimate due
    to inadequate inspections.
    ---------------------------------------------------------------------------
        \10\ EPA, Safe Drinking Water Act, Section 1429 Groundwater Report
    To Congress, EPA-816-99-016, 16 (1999).
    ---------------------------------------------------------------------------
        Fifty-six percent of the States have over 5,001 confirmed releases.
    There are 12 States ranked as ``Tier One'', in nine of these States,
    over 40 percent of the population get drinking water from groundwater.
    Eighty-two percent of States ranked as Tier One or Two (23 of 28
    States) use groundwater as a source of drinking water for over 40
    percent of their population. This data paints a very troubling picture,
    and highlights the need for increasing protections against existing and
    potential sources of contamination from underground storage tanks.

     III. STATES ARE FAILING TO COMPLY WITH REQUIREMENTS TO PROTECT PUBLIC
                           HEALTH AND THE ENVIRONMENT

        In May 2001, the General Accounting Office published a report to
    Congress examining State and Federal Underground Storage Tank
    programs.\11\ GAO concluded that these programs were in need of reforms
    to ensure that underground storage tanks were adequately regulated to
    protect public health and environmental quality.
    ---------------------------------------------------------------------------
        \11\ General Accounting Office, Improved Inspections and
    Enforcement Would Better Ensure the Safety of Underground Storage Tanks
    (2001).
    ---------------------------------------------------------------------------
    A. GAO Conclusions
        GAO reached nine specific conclusions. In general, these
    conclusions demonstrate that Underground Storage Tank programs are of
    widely varying quality, with many inadequately protecting public health
    and environmental quality. GAO's conclusions demonstrate a serious need
    to significantly increase EPA's ability to enforce Federal requirements
    for tanks, and to take other steps to increase the thoroughness and
    frequency of inspections.

                                               States Ranked By Confirmed Releases From Underground Storage Tanks
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Confirmed     Percent                                  Confirmed     Percent
                              Rank                                State       Releases*   Pop. use GW      Rank          State       Releases*   Pop. Use GW
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1.......................................................           FL             1          92.8           26            GA             2          41.4
    2.......................................................           WI             1          69.8           27            VA             2          34.1
    3.......................................................            NC            1          49.8           28            KY             2          25.1
    4.......................................................           TN             1            47           29            HI             3          96.5
    5.......................................................           OH             1          46.3           30            ID             3          96.2
    6.......................................................           MI             1            46           31            NM             3          89.9
    7.......................................................             CA           1          45.5           32            SD             3          69.8
    8.......................................................           TX             1          45.4           33            DE             3          66.1
    9.......................................................           PA             1          41.2           34            VT             3            65
    10......................................................           NY             1          34.6           35            NH             3          61.7
    11......................................................           IL             1          33.2           36            LA             3          60.9
    12......................................................           MD             1          30.8           37            AK             3          60.8
    13......................................................           MS             2          92.1           38            ME             3          60.4
    14......................................................           NE             2          87.1           39            WY             3          58.5
    15......................................................           MN             2          79.8           40            UT             3            57
    16......................................................           IA             2          78.1           41            ND             3          56.9
    17......................................................           IN             2          63.6           42              CT           3          54.1
    18......................................................           WA             2          60.8           43            MT             3          53.4
    19......................................................           AZ             2          60.2           44            AR             3          53.1
    20......................................................           MO             2          53.8           45            KS             3          50.4
    21......................................................           NJ             2          53.2           46            WV             3          43.3
    22......................................................           AL             2          51.9           47            OK             3          33.9
    23......................................................           MA             2          45.7           48            NV             3          30.8
    24......................................................            SC            2          44.9           49            RI             3          26.5
    25......................................................           OR             2          43.6           50              CO           3         22.1
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    *Rank based on the following range of releases: 1=10,000 to 34,000; 2=5,001 to 10,000; and 3=0 to 5,000
    Please Note: Confirmed releases could be an underestimate due to lack of accurate inspections.

        GAO's specific conclusion included the following:
        (1) About 30 percent of the regulated tanks (over 200,000) ``were
    not being operated or maintained properly, increasing the risk of soil
    and groundwater contamination.''\12\
    ---------------------------------------------------------------------------
        \12\ Id, at 2.
    ---------------------------------------------------------------------------
        (2) Operation and maintenance problems were largely a result every
    person who comes into contact with the tank, including tank owners,
    installers, operators and removers, being poorly trained.\13\
    ---------------------------------------------------------------------------
        \13\ Id, at 2.
    ---------------------------------------------------------------------------
        (3) EPA and State compliance data for tanks is unreliable because
    States and several EPA regions do not physically inspect all tanks for
    compliance, but rather, merely estimate compliance rates based on
    inspections of selected tanks or owners' self-certifications.\14\
    ---------------------------------------------------------------------------
        \14\ Id, at 3.
    ---------------------------------------------------------------------------
        (4) An estimated 76,000 empty or inactive tanks may still pose
    threats to human health and environmental quality and therefore should
    be inspected and removed when merited.\15\
    ---------------------------------------------------------------------------
        \15\ Id.
    ---------------------------------------------------------------------------
        (5) Five States reported that at least half of their non-upgraded
    tanks are still in use.\16\
    ---------------------------------------------------------------------------
        \16\ Id, at 8.
    ---------------------------------------------------------------------------
        (6) Fourteen States reported some upgraded tanks still leaked, and
    twenty did not know whether their tanks leaked.\17\
    ---------------------------------------------------------------------------
        \17\ Id, at 4.
    ---------------------------------------------------------------------------
        (7) A California study found that tanks with upgraded equipment do
    not provide complete protections against leaks, and that monitoring
    systems cannot guarantee to detect leaks.\18\
    ---------------------------------------------------------------------------
        \18\ Id.
    ---------------------------------------------------------------------------
        (8) Twenty-seven States and EPA lacked the authority to use the
    most effective enforcement tool to ensure compliance with protections:
    prohibiting fuel deliveries to non-compliant tanks.\19\
    ---------------------------------------------------------------------------
        \19\ Id.
    ---------------------------------------------------------------------------
        (9) Forty-seven States needed additional resources to adequately
    enforce the protections.\20\
    ---------------------------------------------------------------------------
        \20\ Id, at 10.
    ---------------------------------------------------------------------------
    B. GAO Recommendations to EPA
        GAO made four specific recommendations to correct some of the
    deficiencies noted in their report. First, GAO recommended that EPA
    work with States to determine which empty or inactive tanks pose the
    greatest potential health and environmental risks.\21\ This should
    include setting up timetables for owners, States or EPA to remove or
    close these tanks in compliance with Federal requirements and taking
    enforcement action against entities that continue to operate tanks
    without required equipment.\22\ Second, GAO recommended that EPA
    increase their training and support capacities for States.\23\ Third,
    GAO recommended that EPA negotiate with States to determine a minimum
    frequency for physical inspection of all tanks.\24\ Fourth, GAO
    recommended that EPA tell Congress how much additional resources are
    needed to ensure tanks comply with Federal requirements.\25\
    ---------------------------------------------------------------------------
        \21\ Id, at 18.
        \22\ Id, at 19.
        \23\ Id.
        \24\ Id.
        \25\ Id.
    ---------------------------------------------------------------------------
    C. GAO Recommendations to Congress
        GAO also made two broad recommendations to Congress. First, GAO
    recommended that Congress want to consider increasing resources to the
    program.\26\ Second, GAO recommended that Congress may want to
    authorize Federal requirements for physical inspection of tanks on a
    regular basis; prohibitions on the delivery of fuel to tanks that are
    out of compliance with Federal requirements; and States to prohibit
    fuel deliveries under similar circumstances.\27\
    ---------------------------------------------------------------------------
        \26\ Id.
        \27\ Id.
    ---------------------------------------------------------------------------
        IV. S. 1850 SHOULD BETTER ADDRESS THREATS TO PUBLIC HEALTH FROM
                                 LEAKING TANKS

        U.S. PIRG has reviewed S. 1850, the ``Underground Storage Tank
    Compliance Act of 2001.'' U.S. PIRG agrees with the need to increase
    compliance with protections for public health and environmental quality
    related to underground storage tanks. However, we believe that S. 1850
    should be substantially strengthen in 15 ways, consistent with the
    GAO's finding and good public policy respecting public health and
    environmental quality. Further, in several key respects, S. 1850 could
    weaken protections. Therefore, as elaborate below, U.S. PIRG suggests
    the following modifications to S. 1850.
    A. Owners and Operators Should Be Liable For All Corrective Action
            Costs
        U.S. PIRG supports the polluter pays principle, which holds that
    polluters should pay to clean up their contamination. S. 1850 could
    relieve owners and operators of underground storage tanks of their
    responsibility to compensate the government for money expended to clean
    up contamination from tanks.\28\ Therefore, U.S. PIRG opposes this
    provision of S. 1850.
    ---------------------------------------------------------------------------
        \28\ S. 1850, p. 3 lines 6-10.
    ---------------------------------------------------------------------------
        U.S. PIRG urges Congress to ensure that owners and operators are
    held liable for the full cleanup costs incurred by government agencies.
    If owners and operators could not pay off the entire amount, then they
    should be allowed to pay off these costs little by little. To
    accomplish this goal, this current section should be modified to allow
    EPA and States to work out payment plans with owners and operators that
    can demonstrate that they cannot pay the full costs of cleanup
    activities.
    B. Congress Should Encourage States To Fund Their Programs Using The
            Polluter Pays Principle
        U.S. PIRG urges Congress to encourage States to create programs
    that shift program costs to entities that use regulated underground
    storage tanks. We suggest that Congress incorporate this incentive by
    setting aside a percentage of the funds that can be distributed only to
    States that have shifted costs onto such entities. This would conserve
    trust fund resources and place the costs of State programs on State
    entities that are being regulated.
    C. Congress Should Require State and Local To Enforce Requirements That
            Provide Equal Or Greater Protection As Federal Requirements
        U.S. PIRG urges Congress to ensure that State and local entities
    implement and enforce requirements that provide an equal or greater
    level of protection as Federal requirements.\29\ Leaking underground
    storage tanks represent a serious threat to public health and
    environmental quality. This addition would help ensure that State and
    local enforcement officials work to implement and enforce strong
    protections against contamination from these tanks.
    ---------------------------------------------------------------------------
        \29\ S. 1850, p. 3, lines 11-18.
    ---------------------------------------------------------------------------
    D. EPA Should Not Have To Discuss Reallocation With Tank Owners and
            Operators
        U.S. PIRG does not believe that EPA should have to consult with
    tank owners and operators prior revising the reallocating process.\30\
    The decision to reallocate funds should be based on protecting public
    health and environmental quality. EPA could reasonably consult with
    States that have knowledge about program needs related to this issue.
    However, owners and operators of tanks could have more parochial
    interests. Therefore, EPA should not be required to consult with these
    entities.
    ---------------------------------------------------------------------------
        \30\ S. 1850, p. 5, lines 12-13.
    ---------------------------------------------------------------------------
    E. U.S. PIRG Opposes S. 1850's Prohibition On Cost Recovery
        U.S. PIRG supports the polluter pays principle, which holds that
    polluters should pay to clean up their contamination. Consequently,
    U.S. PIRG opposes S. 1850's prohibition on cost recovery.\31\ Congress
    should encourage--not prohibit--EPA from undertaking cost recovery
    actions against owners and operators for cleanup activities related to
    contamination from leaking underground storage tanks.
    ---------------------------------------------------------------------------
        \31\ S. 1850, p. 7, lines 1-6.
    ---------------------------------------------------------------------------
    F. Congress Should Strengthen S. 1850's Inspection Requirements
        U.S. PIRG urges Congress to strengthen S. 1850's inspection
    requirements in two key ways. First, Congress should require physical
    inspections. Second, Congress should disallow self-certification, due
    to the potential of conflicts of interests noted by GAO. These
    requirements would put a premium on preventing contamination, which
    will conserve limited public resources and prevent potential threats to
    public health and the environment.
    G. Congress Should Require Community Involvement In Operator Training
            Procedures
        U.S. PIRG urges Congress to incorporate community members into the
    decisionmaking process related to operator trainings.\32\ Many
    community groups have technical and practical experience with
    appropriate activities related to operating and maintaining underground
    storage tanks. Congress should require Federal and State agencies to
    utilize this knowledge where it is available.
    ---------------------------------------------------------------------------
        \32\ S. 1850, p. 8, lines 3-10, and p. 9, lines 7-14.
    ---------------------------------------------------------------------------
    H. Congress Should Require State Guidelines To Consider The Importance
            Of State Groundwater Resource
        U.S. PIRG urges Congress to require States to consider the
    potential risks posed by leaking underground storage tanks to
    groundwater quality and quantity, and the potential future importance
    of groundwater for the State in developing guidelines and strategies
    for training operators.\33\ This could help to increase the
    preventative nature of training. U.S. PIRG suggests that Congress add
    the following language to S. 1850 in the relevant sections, ``The
    importance of high quality groundwater and the need to emphasize
    preventing contamination.''
    ---------------------------------------------------------------------------
        \33\ S. 1850, p. 8, lines 2-25, and p. 9, lines 7-14.
    ---------------------------------------------------------------------------
    I. Congress Should Not Limit EPA's Authority To Issue Administrative
            Orders
        U.S. PIRG opposes the constraints on EPA's authority to issue
    orders to clean up contamination contained in S. 1850.\34\ Congress
    should not restrict in any way EPA's authority to protect public health
    and environmental quality. However, the language contained in S. 1850
    could be interpreted in this fashion. Therefore, Congress should
    clarify its intent that EPA should not be restricted in any way from
    issuing cleanup orders when there may be a threat to public health or
    environmental quality.
    ---------------------------------------------------------------------------
        \34\ S. 1850, p. 12, lines 23-24, and p. 13, lines 1-14.
    ---------------------------------------------------------------------------
        Conversely, Congress should encourage EPA and the States to heavily
    fine repeat violators of protections for public health and the
    environment. Therefore, U.S. PIRG agrees that Congress should direct
    EPA to consider whether owners and operators of tanks and transporters
    of fuel have repeatedly violated such protections. U.S. PIRG also urges
    Congress to clarify that EPA should consider such past actions, or
    activities that are inconsistent with established training programs, as
    a rationale to increase the gravity of fines. Of course, at a minimum,
    EPA should collect any economic gain resulting from the violation and
    assess a penalty adequate to ensure the entity will not again violate
    any requirements.
    J. Congress Should Make Authority To Prohibit Fuel Shipments, Operator
            Training Requirements, and Inspection Provisions Self-Effecting
        U.S. PIRG urges Congress to make critical enforcement tools and
    preventative measures self-effecting, so that this is no ambiguity or
    delay in their use. In particular, Congress should clarify that EPA and
    State authorities can prohibit fuel shipments to tanks that are out of
    compliance upon S. 1850 date of enactment.\35\ Similarly, Congress
    should state that S. 1850's operator training requirements \36\ and
    inspection provisions \37\ are also unambiguously enforceable. This
    would ensure that EPA and States could protect public health and
    environmental quality despite any delay in promulgating regulations.
    ---------------------------------------------------------------------------
        \35\ S. 1850, p. 13, lines 21-14, and p. 14, lines 1-20.
        \36\ S. 1850, p. 8, lines 1-24, and p. 9, lines 1-20.
        \37\ S. 1850, p. 7, lines 7-21.
    ---------------------------------------------------------------------------
    K. Congress Should Require More Specific Data
        U.S. PIRG supports S. 1850's requirement for a database on issues
    related to underground storage tanks. However, we urge the Congress to
    incorporate requirements that State collect and also make publicly
    available information on the owners and operators of all underground
    storage tanks. Providing the public with information about polluters is
    a proven, low-cost method to increase compliance and decrease
    pollution. S. 1850 should incorporate the principle of right-to-know by
    requiring the collection and dissemination of such information.
    L. EPA Should Develop Uniform Guidelines For State Data Bases
        U.S. PIRG supports S. 1850's requirement that States make
    information related to underground storage tanks available to the
    public electronically.\38\ U.S. PIRG urges Congress to require EPA to
    develop software that states use to supply such information. This would
    make State databases readily comparable, which could aid enforcement
    efforts and facilitate the public's right-to-know about potential
    sources of contamination in their communities.
    ---------------------------------------------------------------------------
        \38\ S. 1850, p. 16, lines 17-4.
    ---------------------------------------------------------------------------
    M. Congress Should Unambiguously Waive Federal Sovereign Immunity
        U.S. PIRG urges Congress to unambiguously waive sovereign immunity
    for Federal agencies that own or operate underground storage tanks.\39\
    Federal facilities should not be above the law. If their actions
    threaten public health and environmental quality, then EPA and States
    should be able to fine these agencies. Courts are loath to find such
    waivers absent an unambiguous statement from Congress. Therefore,
    Congress should amend S. 1850 to incorporate an unambiguous waiver of
    sovereign immunity.
    ---------------------------------------------------------------------------
        \39\ S. 1850, p. 16, lines 5-23.
    ---------------------------------------------------------------------------
    N. Congress Should Increase The Authorization Of Appropriations
        U.S. PIRG supports an increase in the authorization of
    appropriations for the leaking underground storage tank program. GAO
    recommended that Congress consider increasing resources to the program.
    However, S. 1850 currently proposes declining authorizations.\40\ This
    is contrary to GAO's recommendations and sends the wrong signal
    regarding the need to address severe deficiencies in a regulatory
    program charged with protecting public health, environmental quality,
    and economic growth from a significant threat. Therefore, U.S. PIRG
    recommends that Congress direct EPA to spend unused funds currently in
    the trust fund and then increases authorized appropriations consistent
    with program needs.
    ---------------------------------------------------------------------------
        \40\ S. 1850, p. 18, lines 17-24, and p. 19, lines 1-16.
    ---------------------------------------------------------------------------
    O. Congress Should Direct Federal Entities And States To
            Comprehensively Assess The Adequacy Of Financial Responsibility
            Mechanisms
        U.S. PIRG urges Congress to require a comprehensive review of the
    adequacies of financial responsibility mechanisms. There is data
    demonstrating that facilities that have a requirement to maintain
    similar financial responsibility requirements under other programs may
    not be adequately complying with such requirements, and that such
    requirements may be inadequate to protect public health.\41\ Given the
    threats posed by leaking underground storage tanks, U.S. PIRG believes
    that Congress should study and problems and direct appropriate steps to
    taken to ensure tank owners and operators can cover the cleanup costs
    associated with leaking underground storage tanks.
    ---------------------------------------------------------------------------
        \41\ EPA Office of Inspector General, RCRA Audit Report, RCRA
    Financial Assurance for Closure and Post-Closure, 2001-P-007 (2001).
    ---------------------------------------------------------------------------

      V. CONCLUSION: CONGRESS SHOULD INCREASE--NOW WEAKEN--PROTECTIONS AT
                       LEAKING UNDERGROUND STORAGE TANKS

        Leaking underground storage tanks are a serious threat to public
    health and environmental quality demanding immediate congressional
    attention. Congress should act to increase, not weaken, protections. As
    discussed above, S. 1850 contains provisions that would weaken
    protections. U.S. PIRG opposes any such weakening of protections for
    public health. U.S. PIRG believes that if Congress incorporates the
    suggestions outlined above and then enacts the legislation, Congress
    will have taken a significant step toward addressing the risks posed by
    leaking underground storage tanks.
        U.S. PIRG thanks the Senate Environment and Public Works for
    providing an opportunity to testify on this important issue and
    legislation.

                                   __________
    Statement of Kathleen Stiller, Delaware Department of Natural Resources
     and Environmental Control, on Behalf of the Association of State and
             Territorial Solid Waste Management Officials (ASTSWMO)

        Good afternoon. I am Kathleen Stiller and I am the chair of the
    Tanks Subcommittee of the Association of State and Territorial Solid
    Waste Management Officials (ASTSWMO). Thank you for inviting ASTSWMO to
    testify concerning S. 1850, the Underground Storage Tank Compliance Act
    of 2001, introduced by Mr. Chafee (for himself, Mr. Carper, Mr. Smith
    of New Hampshire, Mr. Jeffords, and Mr. Inhofe). ASTSWMO is a non-
    partisan, non-profit association which represents the collective
    interests of waste program directors of the Nation's States and
    Territories. Besides the State regulatory program managers for
    underground storage tanks, ASTSWMO's membership also includes the State
    regulatory program managers for solid waste, hazardous waste, and waste
    minimization and recycling programs as well as State cleanup and
    remedial program managers. Our membership is drawn exclusively from
    State employees who deal daily with the many management and resource
    implications of the State waste management programs they direct. As the
    day-to-day implementers of the State and Federal cleanup programs, we
    believe we can offer a unique perspective to this dialog.
        ASTSWMO State members who implement the tanks regulatory and
    cleanup programs have discussed S. 1850 since its introduction, and
    find many positive features included in the provisions. However, the
    first thing we need to point out is that the collective requirements of
    this legislation on State programs involve substantial increases in
    State workload. As a generalization, we are obliged to tell you that
    most States cannot meet these new requirements without substantially
    increased resources. We know that this bill contains substantial
    increases in the levels of funding authorized for State programs, and
    we are appreciative of that important fact. We also understand that the
    Senate Environment and Public Works Committee cannot guarantee that the
    President will request, nor the Congress appropriate funding at these
    authorized levels in future years. However, if this money is not
    appropriated in future years, we will not be able to do the job
    demanded by this legislation. Without adequate appropriations, this
    would be a significant unfunded mandate for our member State programs.
        This is especially true today, with State revenues down, deficits
    up, and many personnel restrictions and hiring freezes in place. If
    this legislation were to pass this year, we are afraid that some States
    would not be able to startup immediately, nor be able to implement a
    number of features in the initial years.
        With that important caveat stated, let me outline the reactions of
    our members to a number of the specific provisions of the bill which
    would directly affect their State programs:

                  SECTION 2. LEAKING UNDERGROUND STORAGE TANKS

        States' reactions to codifying a distribution to the States of at
    least 80 percent of the funds appropriated each year from the LUST
    Trust Fund indicated that State needs would probably be met if the
    level of appropriations is at the full level of authorization. However,
    if the annual LUST Fund appropriation decreases, or if it remains
    static as program costs and mandates increase, some State programs
    would experience hardship. It has been our understanding that
    approximately 85 percent of the annual appropriation was divided among
    the States, so a mandatory 80 percent distribution could actually
    represent a decrease under some circumstances. We believe that it is
    very important that the annual appropriations be increased to the
    proposed authorized levels to meet many pressing and vital areas in our
    programs which cannot be properly implemented with current funding
    levels. The provision in Section 2 that would authorize States to use
    the LUST Trust Funds to enforce State or local tank leak detection,
    prevention, and other requirements would be a welcome improvement to
    State flexibility. This too, would require increased appropriations, as
    today's demands on these LUST funds would not allow use of the new
    flexible options at current funding levels.

               SECTION 3. INSPECTION OF UNDERGROUND STORAGE TANKS

        Most of our members agree in principle with achieving the goal that
    all USTs regulated under Subtitle I be inspected every 2 years, but we
    have varying opinions of how practical that will be in implementation.
    Some think that in geographically large States with smaller
    tank populations, where there is already an established 3-year
    inspection cycle (which coincides with a 3-year cathodic protection
    test) and where private, third party inspectors are utilized, a 2-year
    inspection cycle would be problematic.
        In States with a larger UST universe, the ability to implement a 2-
    year inspection schedule for federally regulated tanks is dependent on
    the State receiving and being able to use the additional funding that
    would be needed to hire additional inspectors and to develop an
    effective strategy.
        We think that States without a federally approved program, but
    which have a mature and active petroleum leak prevention program which
    could be expanded to include biennial inspections of federally
    regulated tanks, should be allowed to receive appropriations provided
    by the bill to perform the same work that would be done under a
    federally approved program.
        This new requirement for biannual inspections is probable the most
    resource critical feature of the bill. If it is actually funded at the
    $35 million level for each of the first 2 years and $20 million for
    every year thereafter, there is a strong possibility that the
    inspection rate can be increased and will result in greater compliance
    levels. But, if it is not fully funded, then the 2-year inspection
    schedule simply cannot be implemented, and the requirement to perform
    such a Herculean feat is not attainable.
        Once the $35/$20 million appropriations authorized by S. 1850 are
    made, then the formula used to apportion the money among the States
    becomes critical. Our experience is that funds apportioned by State
    population or by the number of federally regulated facilities probably
    will come closer to matching the level of effort required. Other
    formulas are more problematic, especially if they are not directly
    connected to the cleanup or compliance target facilities.
        As a final point regarding inspections, any inspection cycle must
    include followup enforcement and it is unclear whether the authorized
    level of funding in this bill includes money for conducting followup
    enforcement activities.

                          SECTION 4. OPERATOR TRAINING

        The requirement for operator training could be a substantial
    undertaking given the turnover associated with this type of business
    and the number of UST facilities which varies widely from State-to-
    State. While it is difficult to project the scope of this training
    program until Federal regulations are developed, it is apparent that
    owners could gain substantial benefit from reduced penalty exposure and
    reduced remediation costs. We do not believe that States should be
    expected to bear the burden of providing the training. The
    responsibility to provide training must remain with the owners of
    regulated facilities, and the final legislation should unambiguously
    state that responsibility.
        States programs recognize the importance of UST operator training,
    but resources needed to implement effective operator training programs
    have historically not been available. The UST operator training
    provisions of the bill potentially represent a very significant new
    workload. As an example, if a State had a universe of 10,000 facilities
    subject to the Federal UST regulations, depending on who is considered
    to be an ``operator'' and, therefore, would become a trainee, the
    training program may have as few as 10,000 or a multiple of that number
    of students. This would be a huge undertaking.
        Currently, it is difficult to make a qualitative assessment of the
    UST operator's training during an inspection. However, a common
    shortcoming we find during inspections is poor operation and
    maintenance that logically can be attributed to poor training or no
    training. Such a shortfall seriously undermines the prevention side of
    State UST programs.
        We think that the program recommended by the Administrator will
    need to allow creative and innovative State implementation, and avoid a
    ``one-size-fits-all'' regulatory and funding approach. A certification
    requirement would help ensure that operators maintain a basic level of
    understanding of the equipment at the station. For example,
    implementation may not involve the direct delivery of such training.
    Rather, training programs may be created which utilize third party
    services. Community colleges or private enterprises may be harnessed to
    perform this function. Some States may prefer more direct involvement
    in training programs and have taken steps to offer training and have
    attempted to help owner/operators understand their equipment and
    responsibilities as onsite inspections are conducted. High turnover
    rates, however, have made this path difficult. Another option would be
    requiring owners/operators to fund the costs to administer the program
    and allow the States to pass these costs directly onto them or make
    annual funding available based on the number of active regulated UST in
    each State.
        The key is that States don't want to be forced to provide the
    training directly, and to have flexibility in causing training to meet
    established outcomes. When considering allowing the Administrator to
    provide an award of up to $50,000 if a State develops and implements a
    State operator training strategy, State managers consider it unlikely
    that a one-time $50,000 award could support a program that must deal
    with many thousands of regulated UST facilities.
        In sum, we think that the substance of the Federal training
    guidelines must allow flexible State oversight and design in the way
    training requirements are met within each State. States should have the
    flexibility in the way required training is delivered and paid for, and
    allow Federal funding use for costs of managing training efforts.

                  SECTION 5. REMEDIATION OF MTBE CONTAMINATION

        Providing $200 million for MTBE remediation is a welcome funding
    increase. However, a worst-case MTBE remediation, which involves
    potable supply, wells, bedrock aquifers and active remediation, can
    reach into the millions of dollars for investigation and cleanup. Two-
    hundred million dollars could potentially be used up on a small number
    of sites nationally with large amounts of money directed toward little
    effective contamination recovery.
        As with any cleanup, but especially true with MTBE, quick response
    actions can help achieve large amounts of contaminant recovery early
    on. The remaining cleanup could then occur with traditional State funds
    or responsible party/enforcement driven actions. Our members suggest
    that the focus should be on accelerated source and receptor control of
    MTBE and other additives to best leverage funding.
        Additionally, $200 million for MTBE remediation should only be
    included in a legislative package that ensures that all aspects of an
    UST system are properly maintained and tested. There are components of
    an upgraded UST system that are considered ``non product bearing'' that
    have been found to be the source of MTBE contamination; these sources
    have been identified only as a result of monitoring ground water for an
    older release or a potable well impact.
        UST ``autopsy'' studies of significant spills have also shown that
    spill buckets (that crack or become loose from fill ports) should be
    tested regularly; sumps that contain turbines (at which leaks occur)
    should also be product tight and tested regularly. Finally,
    requirements for dispenser pans and Stage 2 vapor recovery systems
    (including drop tanks) should be imposed. All these escape routine
    testing under the existing Federal UST rules and have been found to be
    sources of MTBE contamination in many States. This aspect is
    particularly critical for States that can adopt rules no more stringent
    than EPA.
        When considering chemical properties of MTBE, cleanup costs cannot
    be precisely calculated. Every gasoline release represents a potential
    MTBE site and some of us have seen MTBE contamination from leaks of
    other types of petroleum products such as diesel fuel and heating oil.
    Due to the unique physical and chemical characteristics of MTBE, the
    cost of remediation in some States has been driven up by 20 to 50
    percent at sites with no threat to potable water. In some cases, the
    cost to clean up releases where water supply wells are impacted can
    increase by 100 percent.
        In States where a cleanup guideline for MTBE has been established
    to address taste and odor thresholds, many more private water supply
    wells contaminated with MTBE must be remediated at substantial added
    costs.

                  SECTION 6. RELEASE PREVENTION AND COMPLIANCE

        State program managers believe that an increase in inspection rates
    and followup enforcement activities would have a direct positive effect
    on compliance rates among UST facilities and have created priorities
    for targeting facilities with a higher potential for being the source
    of a release. Thus, some facilities are inspected more often than
    others to prevent releases at sites where the potential for such an
    incident is deemed to be higher. Generally, each time a State UST
    inspector completes an inspection cycle the compliance rate increases
    and the severity of the noncompliance issues tends to lessen. An
    increase in funding for States to conduct inspections, issue orders, or
    bring enforcement actions under this section would be very desirable.
    We would also like to suggest that rather than a rigid 2-year
    inspection cycle envisioned in Section 3 of the Bill, EPA could be
    required to develop a prioritization system based on risk to the
    environment, public health and safety, and the use of the tank. The
    system could require tanks in more sensitive areas to be inspected more
    frequently and those with higher through puts to be inspected more
    frequently.

    Government-Owned Tanks
        Historically, the compliance rate of facilities owned and operated
    by government agencies is generally lower than privately owned sites.
    This includes all levels of government, not just Federal. Local
    government has among the lowest compliance rates for leak prevention
    requirements. Many State and Federal agencies are also remiss in this
    area. We think that the proposed award of up to $50,000 if the State
    develops and implements a compliance strategy for government-owned
    facilities is a good provision. We strongly agree with the parallel
    requirements for a compliance strategy for federally owned tanks.

    Incentives for Performance
        States have reviewed the provisions requiring consideration of
    whether an owner or operator has a history of noncompliance and has
    been to training or has a training program before deciding to issue an
    enforcement action. While these are items that many States consider in
    making their enforcement determination, States do not want their
    enforcement authorities limited to only those facilities that have a
    history of non-compliance or have not been to or do not have a training
    program for operators. A violation may be of a serious enough nature
    that an enforcement action should be undertaken even if there is no
    history of non-compliance and the operator has been trained. States
    need discretion in their enforcement activities and this appears to
    limit that.

    Red Tagging
        States have considered delivery prohibition and ``red tagging'' to
    prohibit product delivery and generally support the use of ``red
    tagging'' as an enforcement tool. A number of States use this method,
    and they find it to be a highly effective method to obtain higher rates
    of compliance among the regulated facilities. However, the proposal for
    delivery prohibition should not be linked to State program approval. As
    in Section 9011 (1)(B) for LUST Trust Fund eligibility, the ability to
    use the Federal delivery prohibition should be linked to the State
    implementing a similar or identical Federal requirement. This could be
    accomplished in a variety of ways, and would provide all the States
    with this valuable enforcement tool.

    Databases
        States have considered developing a record of regulated USTs which
    could be made available to the public. In some States, existing
    databases are adequate for this purpose. Following attacks on the
    United States on September 11th, some States implemented measures
    intended to protect sensitive information that could potentially be
    used to injure the Nation. The identity and location of facilities
    where petroleum products are stored may be regarded as potentially
    valuable information to terrorists. In recognition of this aspect, the
    authors may wish to consider modifications requiring record keeping and
    reporting without granting wide spread public access to precise
    information about individual facilities. Further, we believe that this
    record keeping requirement could have a very high hidden cost if some
    limitations are not placed on the Administrator's authority to require
    the data to be maintained, ``in such a manner and form'' as he/she
    shall prescribe. A clearer statement of the desired legislative outcome
    of this provision would help define the system eventually required.
        Thank you for requesting our testimony regarding this important
    legislation. I would be happy to respond to any questions you might
    have regarding our views.

                                   __________
         Statement of Arthur J. DeBlois III, on Behalf of the National
       Association of Convenience Stores and the Society of Independent
                         Gasoline Marketers of America

                                I. INTRODUCTION

        Good morning, Madam Chairwoman and members of the subcommittee. My
    name is Arthur J. DeBlois. I am president and chief executive officer
    of DB Companies, Inc., an independent motor fuels marketer
    headquartered in Providence, RI. Our company owns and operates 86 ``DB
    Marts'' in Rhode Island, Massachusetts, Connecticut and the Hudson
    Valley of New York. In addition, we have 84 franchisee-operated
    locations.
        Thank you for inviting me to testify today on S. 1850--the
    ``Underground Storage Tank Compliance Act.'' I appear before the
    subcommittee representing the National Association of Convenience
    Stores (``NACS'') and the Society of Independent Gasoline Marketers of
    America (``SIGMA'').
        NACS is a national trade association of more than 2,000 companies
    that operate over 119,000 convenience stores nationwide and employ 1.4
    million individuals. Over 75 percent of NACS' member companies sell
    motor fuels, and the convenience store industry sold more than 115
    billion gallons of motor fuels in 2001, accounting for approximately 70
    percent of all motor fuel sold across the Nation.
        SIGMA is a national trade association of approximately 260 motor
    fuels marketers operating in all 50 States. SIGMA members supply over
    28,000 motor fuel outlets and sell over 48 billion gallons of gasoline
    and diesel annually--or approximately 30 percent of all motor fuels
    sold in the Nation.

         II. NACS' AND SIGMA'S CORE OBJECTIVES FOR UNDERGROUND STORAGE
                                TANK REGULATION

        NACS and SIGMA have been long-standing and vocal advocates for
    vigorous enforcement of Federal and State underground storage tank
    (``UST'') regulations. With respect to Federal and State regulation of
    petroleum USTs, NACS and SIGMA have three key policy objectives:
         Ensure that an adequate percentage of funds appropriated
    from Leaking Underground Storage Tank (``LUST'') Trust Fund is
    delivered to State UST programs for proper regulatory enforcement and
    remediation assistance.
         Ensure all UST owners and operators--including
    governmental agencies, commercial operators, and Native American
    tribes--are held to the same standards and comply with existing UST
    regulations.
         Facilitate prompt remediation of releases from USTs.
        Some persons attending today's hearing may wonder why petroleum and
    convenience store marketers support effective and comprehensive
    enforcement of the UST regulations. Let me explain our position.
        First, it is the correct and environmentally sound position to make
    as responsible businesses. The motor fuels marketing industry has a
    responsibility to our customers and the communities we serve to assure
    that we conduct our business in an environmentally safe manner. If
    marketers are not complying with Federal and State tank regulations and
    leaks occur, then our entire industry receives a ``black eye'' in the
    public's perception.
        Second, since EPA promulgated its UST requirements in 1988, NACS
    and SIGMA members have spent hundreds of millions of dollars complying
    with the tank standards. My company spent over $5 million to comply
    with the 1998 deadline to upgrade our tanks. Additionally, we spend
    approximately $250,000 annually to maintain our compliance with these
    regulations. Clearly, if my competitors and other tank owners have not
    undertaken similar investments, they have enjoyed, and will continue to
    enjoy, a competitive advantage over companies like ours.
        Finally, many of our members, including both large companies and
    the smaller ``mom-and-pop'' retailers, have closed locations as a means
    of compliance with the 1998 tank deadline. I testified many years ago
    at a hearing held by the late Senator John Chafee that, with a 10-year
    phase-in of the requirements, there is absolutely no reason why any UST
    owner and operator should not be in compliance. Tanks that have not
    been upgraded by now, almost 3\1/2\ years after the 1998 deadline and
    13 years after the deadline was announced, should be closed. It does
    not matter if these tanks are owned by a Federal or local government
    Agency or a private concern. A tank that has not been upgraded
    represents an unacceptable risk to our environment and must be closed.
        This point was best articulated by the late Senator Chafee in a
    December 1998 letter to EPA. He stated that there is no justification
    for EPA or the States to distinguish between private- and publicly
    owned tanks when it comes to protecting human health and environment. A
    leak from the local public works or fire department's tank causes the
    same environmental harm as a release from a retail gasoline outlet's
    UST.
        Accordingly, NACS and SIGMA support the key elements of S. 1850--
    namely, expanding the allowable uses of the LUST Trust Fund moneys for
    UST enforcement; requiring every UST to be inspected at regular
    intervals; directing EPA to publish guidelines for training operators
    in the proper operation and maintenance of USTs; requiring EPA and the
    States to publish strategies for ensuring compliance for USTs owned by
    governmental agencies at every level; and providing additional funding
    for the remediation of certain MTBE or high-priority UST releases.

                   III. BACKGROUND ON FEDERAL UST REGULATION

        Congress recognized in the mid-1980's that leaking petroleum USTs
    posed a threat to the environment. To respond to this threat, Congress
    mandated that all petroleum USTs must be upgraded, replaced, or closed
    by December 22, 1998. Despite the fact that UST owners and operators,
    including Federal, State, and local government agencies, knew about
    this deadline for over a decade, the Environmental Protection Agency
    recently estimated that as many as 17 percent of the Nation's USTs have
    not yet come into compliance.
        To assist EPA and the States to implement the 1998 deadline,
    Congress in 1986 established the LUST Trust Fund and enacted a 0.1-cent
    per gallon Federal tax on petroleum products--the proceeds from which
    are directed to the LUST Trust Fund. Each year, Congress appropriates
    money from the Trust Fund to be used by EPA and the States to oversee
    UST corrective actions. EPA has generally allocated an average of 80 to
    85 percent of each year's Trust Fund appropriations to States under
    cooperative agreements.

                        IV. CURRENT STATUS OF TRUST FUND

        According to the Bush Administration's fiscal year 2003 budget, the
    LUST Trust Fund balance at the end of 2002 will be over $1.9 billion.
    Trust Fund tax collections in fiscal year 2003 will be $193 million;
    and, the Trust Fund will earn $113 million in interest. Despite this
    huge fund balance, the Bush Administration has requested only that $73
    million be appropriated from the Trust Fund for fiscal year 2003--less
    than the amount of the interest the Trust Fund will earn during the
    year!
        Given the media attention to UST leaks over the past 5 years, which
    has focused particularly on MTBE contamination of groundwater, the low
    level of appropriations from the Trust Fund is inexplicable. These
    moneys, which were collected from sales of gasoline and diesel fuel
    over the past 15 years, should be put to the use for which they were
    collected--remediating releases from petroleum USTs.
        NACS and SIGMA urge this committee to use its influence to increase
    substantially the fiscal year 2003 appropriations from the LUST Trust
    Fund.

                 V. RECENT UST LEGISLATION AND 2001 GAO REPORT

        This is not the first time that this committee has considered UST
    reform legislation. This committee passed narrower UST reform
    legislation during the 105th Congress, and the House of Representatives
    passed similar bills in both the 104th and 105th Congresses.
    Unfortunately, the full Senate never considered this committee's bill
    in 1998. As a result, these important legislative reforms have
    languished, until S. 1850 was introduced by Senator Chafee last year.
        The U.S. General Accounting Office (``GAO'') released a report in
    May 2001 entitled ``Improved Inspections and Enforcement Would Better
    Ensure the Safety of Underground Storage Tanks'' (GAO-01-464). GAO
    concluded, in part, that EPA and the States have failed to enforce
    consistently the existing UST requirements. GAO estimated that, nearly
    3 years after EPA's deadline of the 10-year phase-in (December 22,
    1998) for environmentally protective tanks, only 89 percent of the
    regulated USTs had been replaced, upgraded or closed. GAO identified
    State and local governmental agencies and very small businesses as the
    primary categories of UST owners and operators who remain in non-
    compliance. GAO also indicated that rates for ongoing UST leak
    detection and compliance are lower than expected.
        The GAO report contained the following recommendations to Congress:
         Increase the amount of funds Congress provides from the
    Trust Fund;
         Authorize States to spend a portion of these moneys on
    training, inspection, and enforcement;
         Authorize EPA to establish a Federal requirement for
    onsite inspections of all tanks on a periodic basis;
         Authorize EPA to prohibit the delivery of fuels to tanks
    that do not comply with Federal requirements, and establish a Federal
    requirement that States have the authority to prohibit fuel deliveries
    into non-complying tanks.

              VI. S. 1850 WOULD IMPLEMENT THE GAO RECOMMENDATIONS

        S. 1850, introduced by Senator Chafee and supported by a bi-
    partisan group of co-sponsors (including Senators Jeffords, Smith,
    Carper, Inhofe, Reed, and Warner), contains the following provisions to
    implement the GAO recommendations:
         Require a minimum of 80 percent of the funds appropriated
    from the Trust Fund be delivered to States;
         Permit States to use Trust Fund moneys to enforce the 1998
    UST deadline;
         Require all regulated USTs to be inspected every 2 years;
         Require States to develop UST operator training programs
    based on EPA guidelines;
         Require States and Federal agencies to submit to EPA a
    strategy to ensure that all tanks operated by Federal, State, and local
    governments comply with existing regulations;
         Require EPA to issue regulations to authorize EPA or the
    States to prohibit the delivery of fuels into non-complying USTs;
         Authorize $200 million for remediation of MTBE releases;
    and,
         Authorize a total of $460 million in appropriations from
    the Trust Fund.
        NACS and SIGMA strongly support S. 1850, with one suggested
    amendment, and urge this committee to approve this important
    legislation at the earliest possible date.

                      VII. SUGGESTED AMENDMENT TO S. 1850

        There is one provision in S. 1850 that NACS and SIGMA would like to
    change. As introduced, S. 1850 limits the use of LUST Trust Fund moneys
    by State UST reimbursement funds to situations where the UST owner or
    operator would face financial hardships but for the reimbursement. This
    provision encourages non-compliance by UST owners and operators. We
    believe that elimination of this limitation would expedite UST clean-
    ups and would leverage limited tank remediation funds at the State
    level.
        Most UST cleanups are managed by responsible parties--that is, tank
    owners or operators--and are overseen by State UST implementing
    agencies. The UST corrective action program largely has worked
    extremely well. As the chart attached to my testimony outlines for the
    States represented by members of this committee, UST clean-ups in your
    States are taking place at a consistent pace.
        State UST reimbursement funds have expended more than $5 billion
    for UST clean-ups over the past decade. According to State data, most
    State UST reimbursement funds are solvent; however, some of these funds
    have been paying claims at a faster rate than the revenues they
    receive. A growing concern from NACS and SIGMA members is that some
    State legislatures, increasingly strapped for cash, might ``borrow'' or
    raid the cash balances in these State UST assurance funds. This
    occurred in my home State of Rhode Island during the State's last
    budget ``crunch.'' Cash flow, therefore, remains critical to the
    success of the State UST reimbursement funds, and allowing a State to
    use some of its LUST Trust Fund moneys from EPA for its UST
    reimbursement fund is one way to leverage limited clean-up resources.
        There is also a misplaced perception that eliminating the
    limitation in S. 1850 would send millions of dollars back to the major
    oil companies. NACS and SIGMA do not believe that to be the case. Most
    major oil companies were the first to replace their tanks, and likely
    have received the bulk of any clean-up reimbursements they were owed
    under the State UST assurance funds.
        UST owners and operators are more likely to initiate and complete
    tank clean-ups if they know that, after they pay the required ``front
    end,'' or deductible, amount, the State UST assurance fund will timely
    reimburse their clean-up expenses. Stated differently, if
    reimbursements become stretched out over a longer period of time, the
    UST owner or operator has an incentive to slow down the pace of their
    clean-ups. Thus, limiting the use of LUST Trust Fund moneys by State
    UST reimbursement funds will do nothing to maintain the pace of
    corrective actions.
        SIGMA and NACS also feel that removing the limitation also will
    assist with the clean-up of high-priority releases, such as MTBE
    contamination cases. If, for example, a small business can avoid
    significant legal expenses by assigning their clean-up costs to a State
    UST reimbursement fund, limited resources can be expended on clean-ups,
    rather than lawyers and consultants.
        NACS and SIGMA urge this committee to make this change to S. 1850
    prior to reporting the bill to the full Senate. We stand ready to work
    with the committee in crafting appropriate amendment language.

                                VIII. CONCLUSION

        NACS and SIGMA appreciate this opportunity to present their views
    on USTs and S. 1850. We look forward to working with the committee on
    UST legislation and urge the committee to move this bill expeditiously.
        I will be happy to answer any questions my testimony may have
    raised. Thank you.

                                                                                                                   ATTACHMENT
                                                                 Select State Financial Assurance Funds--Design Characteristics, Funding, Level of Activity, and Current Status
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                               Total                  Number of Sites
                                       Number of Tanks    Corrective Action     Fund Coverage                            Per-Gallon        Approximate      Approximate      Total      Where Claims    Average Cost Per   Current Status of
                 State                     Covered             Covered           Deductible        Annual Tank Fee      Petroleum Fee    Annual Revenues  Current Balance  Number of  Have Been  Paid   Site at Completed         Fund
                                                                                                                                            (Millions)       (Millions)      Sites        to Date        Clean-up Sites
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    California.....................  180,000...........  Yes...............  Between $0 and      N/A...............  $0.012............             $190           $215.3     28,000            8,400  $98,000...........  The fund is still
                                                                              $10,000.                                                                                                                                      receiving and
                                                                                                                                                                                                                            processing new
                                                                                                                                                                                                                            claims.
    Colorado.......................  12,532............  Yes...............  $10,000 for clean-  $35...............  $0.00-$0.009375...            $22.6             $4.9      7,934            1,332  unknown...........  The fund is
                                                                              up; $25,000 for                                                                                                                               stable and
                                                                              third party.                                                                                                                                  solvent.
    Connecticut....................  N/A...............  Yes...............  $10,000...........  N/A...............  N/A...............              $11            $14.2        971            1,859  $1 million........  N/A
    Delaware.......................  720...............  Partial...........  $2,500............  $50 (not used for   $9 mils/gallon....            $1.35            $.488        115              115  $73,927...........  No new claims are
                                                                                                  State fund).                                                                                                              currently being
                                                                                                                                                                                                                            accepted.
    Florida........................  N/A...............  Partial...........  From $500 up to     $50 for UST         $0.02.............             $203             $152     18,460           10,000  $200,000..........  The fund is
                                                                              25 percent of all   initial.                                                                                                                  stable and
                                                                              costs.                                                                                                                                        solvent.
    Idaho..........................  3,917.............  Yes...............  $10,000 for ASTs/   $25 for USTs/ASTs;  Fee suspended       Fee temporarily              $30        291              117  $129,917..........  The fund provides
                                                                              USTs; $100 for      $5 for heating      until surplus            suspended                                                                    insurance
                                                                              heating oil.        oil.                drops to $15                                                                                          coverage for
                                                                                                                      million.                                                                                              losses from
                                                                                                                                                                                                                            insured tanks
                                                                                                                                                                                                                            that occurred
                                                                                                                                                                                                                            during the
                                                                                                                                                                                                                            policy period.
    Missouri.......................  40,000............  Yes...............  $10,000...........  None..............  $0.003125.........            $17.9              $40      3,914            1,068  $41,986...........  The fund insures
                                                                                                                                                                                                                            owners/operators
                                                                                                                                                                                                                            of USTs and ASTs
                                                                                                                                                                                                                            containing
                                                                                                                                                                                                                            petroleum, as
                                                                                                                                                                                                                            long as
                                                                                                                                                                                                                            compliance is
                                                                                                                                                                                                                            demonstrated.
    Montana........................  N/A...............  Partial...........  $17,500 per         None..............  3/4 cents per                  $6.4             $1.6      1,192            1,075  $11,780...........  The fund is
                                                                              release.                                gallon.                                                                                               currently
                                                                                                                                                                                                                            reimbursing
                                                                                                                                                                                                                            money at a rate
                                                                                                                                                                                                                            faster than
                                                                                                                                                                                                                            revenue is being
                                                                                                                                                                                                                            collected.
    Nevada.........................  3,600.............  Partial...........  10 percent for      $100..............  $0.0075 $7.5                     $9               $2      1,075              935  N/A...............  The fund is
                                                                              regulated tanks.                        million.                                                                                              alive, well, and
                                                                                                                                                                                                                            adding
                                                                                                                                                                                                                            improvements.
    New Hampshire..................  N/A...............  Yes...............  ..................  Motor fuel: $.014/  $.014.............            $14.6            $12.9      1,843            1,398  $35,000...........  The fund is
                                                                                                  gal UST, $.001/                                                                                                           active in all
                                                                                                  gal AST.                                                                                                                  project areas
                                                                                                                                                                                                                            and continues to
                                                                                                                                                                                                                            accept claims
                                                                                                                                                                                                                            for historical
                                                                                                                                                                                                                            and new
                                                                                                                                                                                                                            releases.
    New Jersey.....................  30,000............  Yes...............  None..............  N/A...............  N/A...............              $20             $8.7        900              600  ..................  The fund is open
                                                                                                                                                                                                                            for businesses
                                                                                                                                                                                                                            that submitted
                                                                                                                                                                                                                            applications by
                                                                                                                                                                                                                            1/01/99.
    New York.......................  N/A...............  Yes...............  N/A...............  1100-2000 gallons:  $0.08 per barrel                $35             $2.4        178              N/A  unknown...........  The fund is a non-
                                                                                                  $50 every 5         transferred by a                                                                                      reimbursement
                                                                                                  years; 2001-4999    MOSF.                                                                                                 fund.
                                                                                                  gallons: $150
                                                                                                  every 5 years;
                                                                                                  5000-399,999
                                                                                                  gallons: $250
                                                                                                  every 5 years.
    Ohio...........................  23,575............  Yes...............  $55,000 std         $450/$550K          N/A...............             $9.5            $43.4    unknown            2,116  $58,360...........  The fund will
                                                                              $11,000 rdc.        deductible  $600/                                                                                                         accept claims
                                                                                                  $11K  deductible.                                                                                                         for releases
                                                                                                                                                                                                                            occurring before
                                                                                                                                                                                                                            and after 12/22/
                                                                                                                                                                                                                            98.
    Oklahoma.......................  38,885............  Yes...............  $5,000............  N/A...............  $0.01.............              $27            $17.2      3,891            1,922  $77,000...........  The fund remains
                                                                                                                                                                                                                            solvent.
    Oregon.........................  N/A...............  No, for State       Not Available to    $85...............  N/A...............              N/A              N/A        N/A              N/A  N/A...............  Funded by State
                                                          Remediation Only.   Private Parties.                                                                                                                              for State
                                                                                                                                                                                                                            Remediation
    Pennsylvania...................  34,940............  Yes...............  $5,000............  $.01..............  $0.0005...........               $5             $335      3,000            2,950  N/A...............  The fund now pays
                                                                                                                                                                                                                            97 percent of
                                                                                                                                                                                                                            all claims
                                                                                                                                                                                                                            presented with a
                                                                                                                                                                                                                            release date of
                                                                                                                                                                                                                            2/01/94 or
                                                                                                                                                                                                                            later.
    Rhode Island...................  1,817.............  Yes...............  $20,000...........  0.................  $0.01.............             $4.2             $1.3        300              138  $57,024...........  As of May 2001,
                                                                                                                                                                                                                            the Board was
                                                                                                                                                                                                                            having
                                                                                                                                                                                                                            difficulty
                                                                                                                                                                                                                            paying the
                                                                                                                                                                                                                            quarterly
                                                                                                                                                                                                                            disbursement due
                                                                                                                                                                                                                            to a severe
                                                                                                                                                                                                                            shortfall in
                                                                                                                                                                                                                            funds.
                                                                                                                                                                                                                            Government
                                                                                                                                                                                                                            entities had
                                                                                                                                                                                                                            taken the
                                                                                                                                                                                                                            majority of the
                                                                                                                                                                                                                            funds.
    Vermont........................  4,181.............  Partial...........  $250--$10,000.....  $200/tank.........  $0.01.............               $5             $4.1      2,300              755  $24,776...........  The fund is still
                                                                                                                                                                                                                            accepting claims
                                                                                                                                                                                                                            for new and old
                                                                                                                                                                                                                            releases.
    Virginia.......................  43,022............  Partial...........  $10,000-$200,000..  N/A...............  $0.002-0.006 for              $33.6             $1.9     16,038            3,760  $37,488...........  The fund is
                                                                                                                      motor fuel,                                                                                           currently active
                                                                                                                      diesel, heating                                                                                       covering all new
                                                                                                                      oil.                                                                                                  releases with no
                                                                                                                                                                                                                            sunset
                                                                                                                                                                                                                            provisions.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    All information is based on responses to a survey conducted by the Vermont Department of Environmental Conservation. Updated May 2001.

        Statement of Roger Brunner, Vice President, Zurich North America
        Chairman Boxer, Ranking Member Chafee, members of the subcommittee,
    my name is Roger Brunner and I serve as a vice president with Zurich
    North America's Specialties business unit. Zurich North America is a
    unit of the Zurich Financial Services Group, the third largest provider
    of property and casualty insurance in the United States. My role in the
    organization is the management of our business that provides
    environmental insurance for petroleum storage tanks.
        Today, Zurich North America is the leading provider of storage tank
    environmental insurance in the United States, insuring tens of
    thousands of petroleum storage tanks, which is significantly more than
    any other private insurer. We have been insuring petroleum insurance
    tanks for leakage for approximately 10 years, and we have paid to clean
    up thousands of leaking underground and above ground storage tanks.
    Therefore, legislation that impacts the operations and risk management
    practices of petroleum storage tanks significantly impacts our
    business.
        I am here this afternoon to voice support for the passage of the
    Underground Storage Tank Compliance Act of 2001 (S. 1850). The highly
    efficient localized storage and delivery of petroleum is currently a
    fundamental component of our American lifestyle and economy, and we
    expect localized petroleum storage to continue for the foreseeable
    future. Because the delivery of petroleum as a fuel source is such a
    highly efficient, low margin business for petroleum distributors (and
    represents such a low cost product for businesses, public entities and
    consumers), we sometimes lack respect for the extreme complexity
    required for safely operating our petroleum storage and delivery
    system. In short, we take it for granted.
        It is truly amazing that this volatile and potentially dangerous
    liquid can be extracted from deep beneath the surface of our planet,
    transported across that planet, processed in highly technical
    refineries, then transported, blended and stored locally. Even more
    amazingly, this vital product is then sold to organizations and
    individuals for comparatively less than a comparable amount of your
    favorite fountain soft drink.
        The combination of the low cost storage and delivery of petroleum
    and the potentially significant damage by petroleum releases to human
    health and the environment create the need for S. 1850. This
    legislation is important. We believe that it will improve the
    environmental safety of the local storage and delivery of petroleum.
        Unfortunately, our experiences demonstrate the need for S. 1850.
    Too often, inadequate training procedures or technical appreciation for
    complex monitoring devices leads to otherwise avoidable petroleum
    leaks. For example, last week I reviewed a case in the mid-Atlantic
    with my claims department that involved a petroleum retail location
    that had not appropriately tracked their inventory and did not know
    that they were missing over 10,000 gallons of fuel. Imagine if this
    operator really understood and executed the requirements expected of
    him and had stopped the release at 100 gallons instead of 10,000; the
    environmental contamination would have been limited, and thousands of
    dollars in cleanup costs would have been saved.
        Or, in a classic example of the need for enhanced training, I would
    highlight the case in the mid-west where a local operator taped up the
    mis-calibrated electronic release detection system that kept flashing
    and making noises. Apparently, this complex electronic system had
    issued earlier false warnings, and was viewed somewhat like the boy
    that cried, ``wolf'' one too many times. Unfortunately, when the piping
    joint came apart and there was a real release, no one paid attention
    until it was too late.
        The last personal observation I'll cite is a hospital in the
    Southeast that was not sure who was responsible for keeping track of
    the compliance obligations for its generator's diesel tanks. Because
    the hospital's mission is patient care, their priority was naturally to
    make sure that the tank was full in case the fuel was needed in event
    of a power outage. This important and quite expected priority on
    patient care, and the resulting lack of focus on storage tank
    compliance, missed the fact that a long, slow petroleum leak was
    occurring, thus causing significant environmental damage.
        Each of these examples are real-life claims submitted to Zurich
    North America. Each was the result of poor training and compliance
    programs. And a significant amount of damage caused by each was
    avoidable.
        This is why we believe that S. 1850, if enacted, will have a
    significant impact on the risk management practices of petroleum tank
    operators in the United States. By requiring and funding storage tank
    system compliance inspections at least every 2 years, and improving the
    training of regulated facility operators, S. 1850 will go a long way
    toward ensuring a better prepared and more technically proficient
    operator base. As a significant stakeholder, we believe that this is an
    appropriate utilization of the LUST Trust Fund.
        Zurich North America urges immediate passage of this legislation.
    We believe that as long as local storage and delivery of petroleum are
    part of the fabric of our lives, environmental problems will occur.
    However, we believe that over several years the implementation S. 1850
    will help reduce the number of underground storage tank related
    environmental and human health problems, and that it will be even more
    effective in reducing the severity of these problems that do occur in
    the future.
        I applaud you for introducing such legislation, and look forward to
    working with you in the weeks and months to come.

                                   __________
         Statement of Randy Golding and Shannan Marty, Tracer Research
                                  Corporation

        Tracer Research Corporation (Tracer) has been in the business of
    detecting and locating leaks from tank,; and pipelines since 1984. Over
    the past 18 years, the Company has tested over 3000 miles of piping and
    over 200,000 tanks.
        Tracer is regarded as having the most sensitive leak detection test
    in the industry--The Company is frequently called in to Lest systems
    that are the subject of litigation and has frequently worked with
    regulatory agencies and private industry to locate release sources so
    they can be repaired.
        Tracer is currently contracted by the State of California to
    perform the most comprehensive review of underground storage is and
    piping systems at gas stations ever performed. The case studies
    presented here are from the California Field Based Research project.
        Tracer is making a number of recommendations today. These
    recommendations are based on our years of experience and observation in
    working with leak detection and gas stations. Some of the
    recommendations call for the use of increased leak detection where
    appropriate, others suggest that increased leak detection is not the
    total answer. We begin this testimony with our recommendations.

                                 RECOMMENDATION

         Require deliveries to be monitored and signed off
         Big vapor releases are a safety and environmental hazard
         Don't commission new systems without testing them with
    newer, more sensitive commissioning tests
         (Commissioning test is the most important test to ever be
    performed at a site)

        Require deliveries to be monitored and signed off.--A significant
    fraction, even a majority in some areas, of contamination at UST
    facilities does not come from the UST system itself, but is instead
    related to fuel handling practices. Examples of activities with
    significant opportunity to release fuel include deliveries, UST system
    maintenance, and dispensing. Increased scrutiny of delivery events has
    not been addressed since the inception of the UST program, in spite of
    the fact that it is a significant source of contamination.
        Big vapor releases are a safety and environmental hazard.--Large
    vapor leaks in UST systems with stage IT vapor recovery systems carp
    release up to hundreds of gallons of gasoline vapors in the tank
    backfill every day. This amount of vapors contains a few pounds of
    gasoline. This amount of leakage can he environmentally significant.
    Any water that infiltrates through the tank backfill from the surface
    scrubs MTBE or any other oxygenate out of any vapor in the backfill and
    transports it quickly to the water table. Vapor leaks can be a
    significant source of groundwater contamination.
        Don't commission new systems without testing them with newer, more
    sensitive commissioning tests.--Many leaks that we find in systems have
    been there since the system was built. Operations and maintenance
    dollars are most beneficially spent on systems after they are
    completely tight. All systems are tightness tested before they are put
    into service, bit the sensitivity of these commonly used commissioning
    tests is not good enough to protect the environment. A very sensitive
    commissioning or recommissioning test allows maintenance dollars to be
    spent on a tight system rather than a leaking one.

                                RECOMMENDATIONS

         Increased inspections will assist in better overall
    compliance but only cover what an inspector can see--they do not assess
    the condition of the tanks or piping. Inspections must also include
    sensitive leak detection tests that can identify both liquid and vapor
    releases.
         There is no effective hydrocarbon monitoring
         EPA needs data--Create a central database for states to
    annually report data
        Inspections must include sensitive leak detection tests that can
    identify both liquid and vapor releases.--Current leak detection
    standard, allow for as much as 0.1 gph or 6,000 lbs. per year of liquid
    hydrocarbons to go undetected. Currently compliant systems are able to
    ignore up to 6,000 lbs. of leakage each year from each underground
    storage tanks--Current standards are based on the performance of
    systems that were current in the 1970s. Today, release detection
    technology, from a number of providers, has the capability of
    significantly more sensitivity. The Teak detection performance standard
    should be lowered from the current level of 0.1 gph.
        Hydrocarbon vapor monitoring methods are so unreliable and
    ineffective that they should not he allowed.--The reasons that these
    methods are ineffective include the inability of these methods to deal
    adequately with any existing background contamination, the under-
    appreciated role of microbial degradation of hydrocarbons in
    controlling vapors and the tendency of soil to filter Borne
    hydrocarbons out of the vapor phase and thereby preventing the required
    vapor transport for these methods to be effective.
        Create a central database for states to annually report data.--EPA
    needs some basic information about numbers of tanks, types of systems
    and status of those tanks and systems to make goad policy. Without that
    information, they are guessing.

                                RECOMMENDATIONS

         Different levels of staff expertise exist in different
    States--efforts to improve overall skill base necessary
         Trust fund moneys need to be made available to States for
    enforcement and prevention programs
         EPA fund research an ``acceptable leak rate'' (amount of
    hydrocarbons the environment is capable of self-remediating) for new
    leak detection standard
        Fund research on ``acceptable leak rate.''--Tracer's research, as
    well as other groups, suggests that there is an environmentally
    ``acceptable leak rate'' that would be based on the amount of
    hydrocarbons the environment is capable of self-remediating. The
    current leak detection standard of .1 gph is based on 1970s technology.
    There are a number of leak detection technologies in the market place
    currently that are capable of detecting smaller releases. Currently,
    much of the market doesn't want to know about releases that are smaller
    than current regulations, and thus require the more sensitive
    technologies to `dumb down' their tests to meet the regulatory
    standard.

                     TRACER TESTING BASICS.--A QUICK REVIEW

        Tracer tests tanks and piping using a chemical tracer based test
    method. The tracer chemicals that are used are non-toxic, biologically
    inert, non-radioactive, and have no effect on product quality. They are
    placed in the system in very small concentrations and are looked for
    outside of the system.

    [GRAPHIC] [TIFF OMITTED] T3685.004

        First sampling points or probes are placed through the pavement and
    into the backfill around tanks and pipes.

    [GRAPHIC] [TIFF OMITTED] T3685.005

        Second, a non-toxic, inert unique, easily detectable chemical
    called a leak indicating tracer is added to the product in the UST
    system.

    [GRAPHIC] [TIFF OMITTED] T3685.006

        During normal wage, the tracer is mixed with the product and
    because the tracer has a tendency to become a vapor part of the tracer
    evaporates and also mixes with the vapors in the tank. The tracer is
    also transported through the product piping, vent piping the vapor
    recovery piping. If any vapor or liquid escapes from the UST system and
    enters the back fill, the tracer spreads out in to the backfill in all
    directions as a vapor.

    [GRAPHIC] [TIFF OMITTED] T3685.007

        Finally, samples are collected from the sampling ports and the
    samples are analyzed to determine whether any tracer is present.
        A good indicator of whether a leak is a liquid leak or a vapor leak
    is the ratio of the hydrocarbon vapors (TV-HC) to tracer vapors A vapor
    leak transports more tracer in to the backfill relative to the
    hydrocarbons. The bio-remedial health of a site can ale he gauged by
    the rate at which hydrocarbon vapors are degraded.

                            TRACER TIGHT TECHNOLOGY

         Sensitive as we need to be
         Adjust sensitivity between vapor/liquid leaks
         Pinpoint locations in systems with current leaks
        Tracer has Third Party Certifications that have been reviewed and
    accepted by EPA's National Work Group for tank and pipeline tightness
    tests to the level of 0.005 gph.

                                THE FBI PROJECT

         Goal: To quantify probability and environmental
    significance of releases from new and upgraded UST systems
         Mandated by Senate Bill 989
         Report Completion by June 2002
        The following portion of the testimony is data from the California
    Field Based Research Project. This project was mandated by California
    Senate Bill 989 that was passed and signed into law in 1999.
        Sites throughout California were randomly selected and asked to
    participate in the study.

                           PROJECT OBJECTIVES/PURPOSE

        1. Comparison of three major UST system groups
        2. Identify system component(s) most likely to cause a release
        3. Estimate environmental significance (comparison of potential for
    vapor versus liquid release)
        4. Assess effectiveness of leak detection information

        [GRAPHIC] [TIFF OMITTED] T3685.008

        One out of seventy-three UST systems was found to have an ongoing
    liquid release. The leak rate was between 0.0001 and 0.005 gph or
    between 1 and 40 gallons per year. The Leak was due to an installation
    defect and may have been leaking for a significant portion of the life
    of the system. This leak was too small for outdated but currently used
    leak detection methods to detect.
        Sixty-five percent of the tanks were found to have detectable vapor
    leaks. Vapor leak rates varied from a few gallons of vapor per year to
    hundred of gallons of vapor peer day. In this random population of
    systems, vapor leaks were found to be orders of magnitude morn
    significant in terms of groundwater contamination than liquid leaks.

                                            Tightness Frequency by Tank Type
    ----------------------------------------------------------------------------------------------------------------
                              Tank Type                                   Tracer ND               Pass Percent
    ----------------------------------------------------------------------------------------------------------------
    Double-walled...............................................                    16/48                33 percent
    Single-walled...............................................                    10/25                40 percent
    ----------------------------------------------------------------------------------------------------------------

        Vapor leakage from double walled tanks was found as frequently as
    form single walled tanks, The only liquid leak found was from a single,
    walled pipe (that had probably been leaking since it had been
    installed).

                                              Vapor Recovery System by Type
    ----------------------------------------------------------------------------------------------------------------
                         System Type                          Fail/Total         Fail Percent       Tracer Average
    ----------------------------------------------------------------------------------------------------------------
    Balance.............................................              30/48                  62                 0.8
    Assist..............................................              18/25                  72                   3
    ----------------------------------------------------------------------------------------------------------------

        Assist type vapor recovery systems have a greater tendency to
    pressurize the vapor space of the tank than balance type vapor recovery
    systems and were found to correlate with greater amounts of vapor
    leakage.

                                CASE STUDY NO. 1

         Large vapor release suspected based on TPH and tracer
    concentrations

              TPH: 164 mg/L
              Tracer: 30 ug/L

         Tank essentially venting to backfill
         Release point: Faulty drain valve into fill riser spill
    bucket, via separated joint in spill bucket into a containment sump,
    out top of containment sump and underneath manhole cover into the
    backfill.
        This system was found to be leaking in excess of 400 gallons of
    gasoline vapors per day. This would account for about 2 to 3 lbs. of
    gasoline per day or about a thousand pounds per year. Tanks should be
    made to be vapor tight and should be tested to determine whether they
    are vapor tight.
        About 30 percent of the spill buckets at the systems tested failed
    to hold water. The most likely cause of the watch leakage was dirt,
    leaves and trash in the drain valve. Unfortunately, leaking drain
    valves that are attached to UST systems that have a tendency to be
    pressurized become tanks vents that are located directly below manhole
    covers.
        The hydrocarbon distribution at this site was high concentration
    and widespread. The lower explosive limit (LEL) for hydrocarbons is 20-
    40 percent. The hydrocarbon concentrations in the back fill at this
    site were 4-8 times higher than the LEL.

                                CASE STUDY NO. 2

         Vapor release at each gasoline tank ATG cap, no release
    from diesel tank
         Gasoline tanks missing o-ring for cable penetration and
    under pressure from pressure release vent cap
         Diesel tank, o-ring present and tank not under pressure
        Sixty-five percent of the tanks in the study had vapor leaks that
    were detectable and ranged from very small to very large. The sources
    of these vapor leaks were many and varied and upon identification and
    location, most could be repaired.
     what's been learned in california in the field based research project

                        AND FROM ENHANCED LEAK DETECTION

         Gas Station systems (primary containment) work well
         Liquid releases from the systems are rare
         System liquid releases found were far below the threshold
    of detection equipment
         Some sites with completely tight systems still had
    significant amounts of liquid product on the groundwater at the site
    (non-system release events)
         MTBE problems exist at some completely tight facilities
         California has the most policed systems in the United
    States but still have significant vapor releases
         Tanks, etc. at gas stations are not designed/installed to
    be vapor tight
         Continual release of vapors to the backfill can be a
    safety as well as an environmental hazard
        The California Field Based Research Project is the first
    comprehensive evaluation of existing UST systems ever done. The
    findings offer unique scientific insights to help create effective UST
    system policies.
        One hundred eighty-two systems have now been evaluated. The updated
    report from the continued evaluation will be available June 1, 2002.
    Tracer would he happy to provide the updated report when it is
    available.

                                   __________
       Statement of the Petroleum Marketers Association of America (PMAA)

        The Petroleum Marketers Association of America (PMAA) submits the
    written testimony below for the Senate Hearing Record for the May 8th
    hearing on S. 1850. PMAA generally supports S. 1850, but recommends
    some changes to the bill as it is currently written.
        PMAA welcomes this hearing, as PMAA has long sought legislation to
    alleviate the financial burden placed on States with regard to
    requirements of the Resource Conservation and Recovery Act (RCRA) and
    the leaking underground storage tank program. PMAA views this
    legislation to be of critical importance to petroleum marketers from
    your respective States and across the country. PMAA has been working
    with congressional staff for many years now to secure States their fair
    share of Federal funding under the Federal Leaking Underground Storage
    Tank (L.U.S.T.) program and is pleased to see that Senate members are
    interested in moving forward on this legislation.
        PMAA is a federation of 42 State and regional trade groups
    representing some 8,000 small, independent petroleum marketers.
    Collectively these 8,000 marketers sell half the gasoline, three
    quarters of the diesel fuel and 60 percent of the home heating oil
    consumed in the U.S. annually.
        PMAA is aware that some will try to say that the polluter isn't
    paying for clean-ups. PMAA responds by saying that marketers,
    themselves, have paid into this fund for approximately 15 years for the
    explicit purpose of cleaning up leaking underground storage tanks. It
    should be made very clear that this fund is not general taxpayer
    money--it was funded by the industry for an explicit purpose--not to be
    used as political fodder for special interests. As the subcommittee
    members may be aware, various legislators have twice tried to raid the
    fund--once to pay for enforcement of the Endangered Species Act and a
    second time to pay for the Superfund program, which would have depleted
    the L.U.S.T. fund in a matter of 2 years.
        PMAA and its marketer members have worked to secure passage of S.
    1850, as an essential step in helping ensure that States continue to
    receive the lion's share of Federal L.U.S.T. funds. As you know, S.
    1850, if passed, would achieve several important objectives. First, the
    legislation would ensure that States--by statute--receive at least 80
    percent of money appropriated by Congress yearly for the L.U.S.T.
    program. PMAA strongly believes that this provision is critical to
    States to ensure that they are given the resources necessary to carry
    out their obligations under the Federal L.U.S.T. program mandates. It
    would be an injustice if States were to lose additional funding for
    their .responsibilities, because they are the very entities to whom
    Congress made mostly responsible for carrying out the requirements
    under RCRA.
        If States do not continue to receive the bulk of the money
    appropriated, the requirements for leaking underground storage tanks
    would quickly become an unfunded Federal mandate. Passage of S. 1850,
    would--at the very least--assure States of their share of Federal
    funding, especially as budgetary constraints grow tighter.
        Second, the bill would give States and tank owners and operators a
    greater voice in the allocation process. The bill provides that--should
    E.P.A. want to change the current allocation formula, it must consult
    with the State administrators and representatives of tank owners and
    operators. The bill also uses E.P.A.'s current allocation formula and
    adds additional criteria that E.P.A. should take into consideration.
    Under S. 1850, E.P.A. would be required to also take into account the
    amount of revenue received into the Federal L.U.S.T. fund from a given
    State.
        The bill requires that these criteria be considered ``at a
    minimum'', but does not prevent E.P.A. from adding additional criteria
    after consultation with the regulated community. PMAA feels that this
    is an important provision because States are ensured that there will be
    a variety of criteria considered, including the amount of money their
    marketers have paid into the fund.
        Third, the bill would allow States greater flexibility regarding
    their use of the funds. PMAA believes that this is essential because,
    as States face greater demand for the clean-up funds and additional
    administrative and enforcement costs, Congress should provide the
    greatest flexibility possible.
        Every State faces a different situation with regard to their
    respective program. The bill would allow States to use money for
    administration; enforcement and to aid--at a minimum--tank owners or
    operators who face financial hardship.
        PMAA feels that this provision should be included for a variety of
    reasons. Primarily, PMAA urges Congress to aid in the clean-up of
    leaking underground storage tanks because that was the purpose intended
    when the fund was created. Unfortunately, only approximately 1 percent
    of the money has been used for actual clean-up--and that has been for
    the clean-up of orphan tanks where the owner or operator could not be
    identified and or Native American owned tanks. Clearly, there is a
    community need for the money to be used for actual clean-ups.
        PMAA is strongly supportive of the language included in the bill,
    which would allow States to use Federal L.U.S.T funds for the clean-up
    of MTBE, which has been a growing problem for many States. PMAA would
    like to see the eventual phase-out of the use of the product, but
    believes the provisions in S. 1850 will give States an added resource
    to deal with the groundwater contamination that is occurring
    nationwide.
        Using E.P.A.'s figures, approximately 99 percent of the money
    appropriated each year goes for administration and enforcement of the
    L.U.S.T. program and approximately 1 percent is spent on the clean-up
    of orphan tanks. For example, that means that, out of the approximately
    $70 million appropriated for the program in fiscal year 2002, only
    about $700,000 went to clean-up sites (orphan only). The rest of the
    money appropriated in fiscal year 2002--$69,300,000--went for the
    administration and oversight of the program (for both Federal and State
    E.P.A. enforcement).
        Responsible parties will continue to clean-up sites, but PMAA feels
    strongly that States should be allowed the flexibility to make a
    decision, in certain cases, to use Federal funds for actual cleanups.
    PMAA's position has been and remains that the bulk of clean-ups need to
    be done in situations where the owner or operator can be identified but
    may need financial assistance.
        To add background to our earlier point, PMAA and other petroleum
    groups actually supported the reinstituted L.U.S.T. tax of \1/10\ of a
    cent per gallon when it was enacted. As a matter of fact, industry
    actually wanted a higher tax because industry believed that the fund
    would be used for its intended purpose--to clean-up leaking underground
    storage tanks and that it would be spent and used productively.
    Industry wanted a higher rate for two reasons, (1) to actually help
    later when clean-ups would become more actively pursued and (2) because
    there is no way to reflect such a nominal increase in the posted
    gasoline price. So, many marketers accepted the \1/10\ of a cent per
    gallon tax and ate the cost because it could not be passed along to the
    consumer.
        Now, we have a Federal fund with over $2 billion sitting idly,
    while States and marketers have no funds to clean-up sites. And, the
    yearly appropriation level has not risen in several years.
        Under the Chafee bill, States would be able to spend the money for
    tank clean-up, administration and enforcement--wherever they believe
    their States could most effectively use the money. PMAA believes that
    States are closer to the problem and can make a more competent decision
    with regard to the L.U.S.T. program and spending the money wisely.
        PMAA strongly recommends that the language in the bill requiring a
    State to conduct an inspection at least every 2 years be further
    clarified so States do not misinterpret that bill's intent. Currently,
    many States (29 at this time) have E.P.A. approved programs that they
    do not want undermined with this bill. In other words, marketers and
    State associations have spent years working with their State
    environmental authorities to ensure a strong tank program. In many
    States, electronic monitoring is already required. What would the
    required inspection entail under S. 1850--a review of the records, an
    actual thorough tank inspection, or something else? PMAA would like to
    see this language clarified to give the States the most flexibility
    possible to allow them to operate under programs they may already have
    in place. PMAA recommends that the subcommittee amend the bill to say
    ``. . . if a State has an E.P.A. approved program in place, the 2 year
    inspection requirement does not apply''. PMAA also believes that, once
    a marketer, gets a ``clean bill of health'' after an inspection, he or
    she should not be targeted every 2 years with more inspections. Rather,
    PMAA feels the States should target their resources toward the ``bad
    actors'' rather than the entire tank community.
        PMAA would also like to see language in the bill that clarifies
    when an inspector could shut down a tank operation to exclude paperwork
    violations from being sufficient grounds to stop the operation of a
    tank. Often, paperwork violations are the cause for a citation and
    should not warrant such an extreme response.
        PMAA recommends that the language in the bill relating to publicly
    owned tanks be strengthened to include an actual enforcement mechanism,
    rather than simply requiring States to come up with a ``compliance
    strategy''. Industry has long known that a large number of tank leaks
    come from publicly owned tanks, and government and other publicly owned
    tanks should not be exempt from having to comply with Federal law. The
    bill lacks a sufficient remedy to compel Federal, State, and other
    public authorities to come into compliance and remedy those tanks that
    are leaking or otherwise not in compliance.
        PMAA urges the subcommittee to approve this important legislation
    with the recommended changes outlined above and expedite its
    consideration by the full committee and Congress. The 1998 E.P.A.
    deadlines have long passed, but there is still a great need to get this
    important funding to the States and to offer them increased
    flexibility. On behalf of our over 8,000 marketer members, PMAA urges
    your support for S. 1850, with amendments.