[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



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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.
  

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