Environmental Protection: Improved Inspections and Enforcement	 
Would Better Ensure the Safety of Underground Storage Tanks	 
(04-MAY-01, GAO-01-464).					 
								 
The states and the Environmental Protection Agency (EPA) cannot  
ensure that all active underground storage tanks have the	 
required leak-, spill-, and overfill-protection equipment	 
installed, nor can they guarantee that the installed equipment is
being properly operated and maintained. While the states and EPA 
regions focus most of their limited resources on monitoring	 
active tanks, empty or inactive tanks require attention to ensure
that no soil and groundwater contamination has occurred. Half of 
the states have not physically inspected all of their tanks and  
several others have not conducted frequent enough inspections to 
ensure the tanks' safety. Moreover, most states and EPA lack	 
authority to use the most effective enforcement tools and many	 
state officials acknowledged that additional enforcement tools	 
and resources were needed to ensure tank safety. EPA has the	 
opportunity to correct these limitations within its own regions  
and to help states correct them through its new tank program	 
initiatives. However, the agency has yet to define many of the	 
implementation details, so it is difficult to determine whether  
the proposed actions will be sufficient to ensure more inspection
coverage and more effective enforcement, especially within the	 
states. Congress has an opportunity to help alleviate the states'
resource shortages by providing additional funding for		 
inspections and enforcement or more flexibility to use existing  
funds to improve these activities.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-464 					        
    ACCNO:   A00879						        
  TITLE:     Environmental Protection: Improved Inspections and       
             Enforcement Would Better Ensure the Safety of Underground Storage
             Tanks                                                            
     DATE:   05/04/2001 
  SUBJECT:   Environmental monitoring				 
	     Federal/state relations				 
	     Hazardous substances				 
	     Health hazards					 
	     Inspection 					 
	     Pollution control					 
	     Safety standards					 
	     Tanks (containers) 				 
	     EPA Underground Storage Tank Program		 

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GAO-01-464
     
Report to Congressional Requesters

United States General Accounting Office

GAO

May 2001 ENVIRONMENTAL PROTECTION

Improved Inspections and Enforcement Would Better Ensure the Safety of
Underground Storage Tanks

GAO- 01- 464

Page 1 GAO- 01- 464 Environmental Protection

May 4, 2001 The Honorable Robert C. Smith Chairman, Committee on Environment

and Public Works United States Senate

The Honorable Lincoln Chafee Chairman, Subcommittee on Superfund,

Waste Control, and Risk Assessment Committee on Environment and Public Works
United States Senate

Underground storage tanks that leak petroleum or other hazardous substances
contaminate nearby soil and groundwater. These substances can contain known
carcinogens, and individuals coming into contact with this contamination may
experience health problems ranging from nausea to kidney or liver damage.
Furthermore, one contaminant- methyl tertiary butyl ether (MTBE), a fuel
additive being used with increasing frequency in recent years- is
particularly troublesome in that it migrates quickly through the soil into
the groundwater and even small amounts can render the groundwater
undrinkable. In 1984, because of concerns about risks posed from leaking
tanks, the Congress established the Underground Storage Tank (UST) program
to monitor the more than 2 million tanks active at the time, most of which
were located at gas stations across the country. Administered by the
Environmental Protection Agency (EPA), the UST program was designed to
prevent releases of petroleum and hazardous substances into the environment,
detect releases when they occurred, and clean up any contamination from a
release. To prevent further leaks from active tanks and additional cleanups,
EPA issued regulations requiring tank owners to either install new leak
detection equipment (by the end of 1993) and new spill-, overfill- and
corrosionprevention equipment (by the end of 1998), or permanently close
down or remove their tanks in accordance with federal procedures. As a
result, by September 2000, approximately 1. 5 million tanks had been
permanently closed, leaving an estimated 693,107 tanks subject to federal
UST program requirements. Newly installed tanks must also meet strict
equipment requirements.

To monitor this large number of tanks, EPA has enlisted states? assistance
in implementing and enforcing the UST program. At the time of our review,
EPA had approved 27 states and the District of Columbia to

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 464 Environmental Protection

implement the program with agency oversight and monitoring. Twentyone
additional states operate and enforce their own tank programs under state
laws with EPA maintaining limited oversight. These states have implemented
requirements similar to the federal requirements. The agency also maintains
responsibility for implementing the program for approximately 2, 650 tanks
located on lands owned by Indian tribes and 3,480 tanks in Idaho because
that state does not have the necessary laws in place. 1

Concerned that the tank program is not effectively preventing leaks and that
tanks continue to pose risks, you asked us to determine (1) whether the
tanks regulated by EPA and the states have the required equipment and are
being properly operated and maintained, (2) the breadth of EPA?s and the
states? tank inspections and the types of enforcement actions taken, and (3)
whether upgraded tanks were still leaking. To address your questions, we
obtained information via survey from tank program managers in all 50 states
and the District of Columbia, because nationwide data on implementation of
the program did not exist (see appendix I for a copy of the survey). We
followed up with respondents to clarify and ensure the consistency of the
information provided; however, we did not independently verify the
information. In addition, we spoke with officials in all nine EPA regions
that are responsible for monitoring tanks on tribal lands, and visited the
three regions with the largest number of tanks to regulate.

Based on state and EPA responses to our survey, we estimate that about 89
percent of the total number of regulated tanks, or 616,865 tanks, received
federally required equipment upgrades by the end of fiscal year 2000.
However, we also estimated that about 29 percent of the regulated tanks, or
201,001 tanks, were not being operated or maintained properly, increasing
the risk of soil and groundwater contamination. Survey respondents, as well
as expert and industry groups, attribute operations and maintenance problems
to poor training among tank owners, installers, operators, and removers. The
reliability of the state- and EPA- provided compliance data cannot be
verified, however, because almost half the states and several EPA regions do
not physically inspect all tanks for

1 New York is responsible under state law for inspecting its tanks, but EPA
maintains responsibility for taking enforcement actions at non- compliant
tanks because the state lacks the necessary laws in the areas of spill,
overfill, and corrosion protection. Results in Brief

Page 3 GAO- 01- 464 Environmental Protection

compliance with federal requirements. Instead, these states and regions
estimate compliance rates based on inspections of selected tanks or on tank
owners? self- certification that their tanks are in compliance. In addition,
we found that even though state and EPA officials believe that most of the
estimated 76,000 non- upgraded tanks are either empty or inactive, they
should still be assessed for contamination risks and closed or removed
accordingly. This is important because states have found that empty or
inactive tanks may still pose a contamination risk. Because of continuing
reports of tank problems, EPA announced in October 2000 that it would
undertake a set of four program initiatives, including one intended to
improve tank compliance with federal requirements and address training,
although the agency had not fully defined its implementation plans. We are
recommending that EPA include in its plans ways to better address the
remaining empty or inactive tanks and work with the states to identify and
fill their individual training shortfalls.

Most states and EPA do not physically inspect all underground storage tanks
frequently enough or have access to the most effective enforcement tools to
ensure compliance with federal requirements. Only 19 states and two of the
three EPA regions we visited physically inspect all of their tanks at least
once every three years- the minimum EPA considers necessary for effective
tank monitoring. Ten additional states inspect all of their tanks but less
frequently than every 3 years. The remaining 22 states and EPA region do not
inspect all of their tanks, but instead generally target inspections to
potentially problematic tanks, such as those close to drinking water
sources. As a result, these states and EPA lack the data they need to
evaluate the overall effectiveness of the tank program and to take
appropriate enforcement actions. States and EPA regions attribute their
limited inspection programs to the lack of staff. In addition, 27 states and
EPA noted that they lack the authority to use the most effective enforcement
tool- prohibiting fuel deliveries to non- compliant tanks. Instead, 45
states and EPA typically fine violators, and 19 states and EPA can issue
field citations to violators- a cost- effective method, similar to issuing
traffic tickets, that is used for less serious violations. Nevertheless, 27
states responded that they needed additional enforcement authority and 46
said they needed additional resources. EPA plans to address inspection and
enforcement issues as part of its program initiatives. We are making more
specific recommendations to EPA and suggestions for the Congress to consider
that would encourage periodic inspections of all tanks and help address the
need for additional enforcement authorities and resources.

Page 4 GAO- 01- 464 Environmental Protection

Upgraded tanks continue to leak despite the installation of leak prevention
and detection equipment, although the extent of the problem is unknown.
Fourteen states reported that some of their upgraded tanks still leaked, 17
states said their tanks seldom or never leaked, and 20 states did not know
whether their tanks leaked. EPA and some localities have studies underway to
obtain better data on the extent of leaks. One California locality study
concluded that tanks with upgraded equipment do not provide complete
protection against leaks, and that tank monitoring systems, even when
properly operated and maintained, cannot guarantee the detection of leaks.
One of EPA?s initiatives to determine whether current equipment and
operation and maintenance requirements are adequate to prevent leaks or if
the agency needs to set new requirements should eventually help address
concerns about continuing leaks. States and key stakeholders agree with the
need to reconsider these requirements.

An underground storage tank is defined as a tank and any underground piping
connected to the tank that has at least 10 percent of its combined volume
underground. When the UST program was established, Congress and EPA excluded
about 2 million tanks meeting this definition from coverage based upon their
size, content, location, or regulation under other programs or laws. For
example, certain tanks used to store heating fuel or small tanks used on
farms and residences were excluded. Under EPA?s UST program, a tank owner
must notify a designated state or local agency of any tank storing petroleum
or hazardous substances. EPA and the states track and regulate these
underground tanks, updating its databank as new tanks become active. Most
regulated tanks store fuel for vehicles and are located at gas stations.

Although tank owners and operators are ultimately responsible for cleaning
up contamination from leaks, the Congress created a trust fund in 1986 to
help EPA and the states cover cleanup costs which tank owners and operators
could not afford or were reluctant to pay. In instances where owners and
operators would not pay, EPA or the relevant state could proceed with the
cleanup and later seek reimbursement from the owners and operators. EPA
derives about $70 million annually from the trust fund, most of which it
distributes to states to implement its cleanup program. The trust fund is
replenished primarily by revenue generated from a $0.001 per gallon tax on
gasoline, diesel, and aviation fuel. At the end of fiscal year 2000, the
balance in the fund was about $1.5 billion. States receiving support from
the trust fund must spend it on cleanup and related activities, and cannot
use the money for inspections or Background

Page 5 GAO- 01- 464 Environmental Protection

enforcement of leak detection and prevention requirements. States can keep
any reimbursements from owners and operators for states? cleanup costs and
use these extra funds on future cleanups. EPA also awards states annual
grants of about $187,000 each to help states cover some of the program?s
inspection and enforcement costs, and spends about $6 million annually on
its own headquarters and regional program implementation, management, and
oversight activities.

In addition to setting equipment requirements for active tanks, EPA has
established operational and maintenance requirements to help ensure that
these tanks remain safe. These requirements specify actions that tank owners
and operators are to take to prevent the spills, overfilling, and corrosion
that typically cause leaks, such as periodic system testing. EPA has taken
further steps to improve the UST program. For example, in recent years, MTBE
-a gasoline additive designed to reduce emissions and raise octane- has been
detected with increasing frequency in groundwater used for drinking water
supplies. MTBE is a potential carcinogen and the effects of exposure include
headaches, eye, nose and throat irritation, cough, nausea, dizziness, and
disorientation. In recent years, water suppliers have incurred increasing
costs to clean up MTBE contamination. In November 1998, EPA convened a panel
of experts to help investigate reported releases of this fuel additive into
some groundwater, including releases from tanks. In 1999, the agency also
convened a focus group of nine industry representatives who provided
comments on the current status of the tank program and leak prevention
methods. Using information from these two groups and a variety of other
sources, in October 2000, EPA announced a set of four program initiatives
intended to:

 Improve compliance

 Achieve faster cleanups

 Evaluate the performance of tank systems

 Promote tank cleanups at abandoned and idled properties that are
contaminated.

At the time of our review, EPA had just begun to assemble working groups to
define the initiatives? time frames and implementation details.

The Congress has introduced several legislative proposals to help states
increase their capacity to inspect tanks and to enforce federal requirements
intended to prevent problems with leaking tanks. For example, S. 2962, which
was introduced in July 2000, would have allowed states, among other things,
to spend a portion of the funds they receive

Page 6 GAO- 01- 464 Environmental Protection

from the tank cleanup trust fund on inspections and enforcement of leak
detection and prevention requirements.

Although most tanks have been upgraded with the federally required equipment
to help prevent leaks, spills, and corrosion, the states and EPA regions
report operations and maintenance problems that could lead to spills, leaks,
and health risks. Consequently, some upgraded tanks still pose potential
health risks. State and EPA officials believe that the tanks without the
equipment are generally empty and inactive, but further investigation is
needed to determine whether these tanks should be removed to guard against
contamination or undergo cleanup. States also noted that owners, operators,
installers, and inspectors need more training to help solve the operations
and maintenance problems. As a result, EPA has included improved training
and tank compliance in its program initiatives.

Based on state responses to our survey, we estimate that about 89 percent of
the 693,107 regulated tanks, or 616,865 tanks, had been upgraded with the
federally required equipment by of the end of fiscal year 2000. Compliance
rates among the states varied, as the following figure illustrates. Most
Tanks Have

Been Upgraded With Leak- and Spill- Prevention Equipment, but Many Are Not
Being Operated and Maintained Properly

State Compliance With Federal Equipment Requirements Is High but Still
Varies Considerably

Page 7 GAO- 01- 464 Environmental Protection

Figure 1: Most Tanks Comply With Federal Equipment Requirements, but
Compliance Rates Vary (total active tanks per state)

Source: GAO estimates based on responses to a survey of tank program
managers in all 50 states and the District of Columbia

Note: EPA implements the federal tank program in Idaho and enforces certain
requirements in New York because these states lack some or all of the
necessary laws.

Page 8 GAO- 01- 464 Environmental Protection

In comparison, EPA data indicated that about 70 percent of the tanks that
its regions regulate on tribal lands had also been upgraded, but this varied
among the regions as well. For example, four regions reported upgrades in
more than 90 percent of their tanks, while a fifth region reported that only
36 percent out of its 736 tanks complied with federal requirements.

The accuracy of the states? tank compliance estimates varies, however,
because some are based on more reliable data than others are. For example,
29 states base their estimates on periodic physical inspections of all of
their tanks. Other states base their overall compliance rate estimate on
inspections of only a subset of their tanks or on information provided by
owners and operators that certifies that their tanks had been upgraded. The
accuracy of EPA compliance data for tanks on tribal lands also varies. For
example, one region reported it lacked data to know the actual location of
some of the 300 tanks it was supposed to regulate on tribal lands and
therefore could not verify whether these tanks had been upgraded.

We estimate that the remaining 11 percent, or about 76,000, of the regulated
tanks may not be upgraded. Seventeen states and the three EPA regions we
visited reported that they believe that most of these tanks were either
empty or inactive, while five states reported that at least half of their
non- upgraded tanks were still in use. EPA program managers surmised that
many states most likely assume that the empty or inactive tanks pose less
risk and therefore allocate fewer resources to their care. However, states
also reported that they generally do not discover tank leaks or
contamination around tanks until the empty tanks are removed from the ground
during replacement or closure. Therefore, unless EPA and the states address
the issue of empty or inactive tanks in a timely manner, this potential
source of contamination may be overlooked.

We estimate that 29 percent of regulated tanks, or 201,001 tanks, are not
being operated and maintained properly. Operations and maintenance problems
varied across the states, as the following map illustrates. Tank Operations
and

Maintenance Problems Increase the Risk of Contamination

Page 9 GAO- 01- 464 Environmental Protection

Figure 2: Compliance With Federal Operations and Maintenance Requirements
Varies Among States (total active tanks per state)

Source: GAO estimates based on responses to a survey of tank program
managers in all 50 states and the District of Columbia

Note: EPA implements the federal tank program in Idaho and enforces certain
requirements in New York because these states lack some or all of the
necessary laws.

Page 10 GAO- 01- 464 Environmental Protection

States reported a variety of operations and maintenance problems that
surfaced during routine inspections of underground storage tanks:

 19 states reported frequent problems with the equipment intended to
prevent corrosion,

 15 states reported that leak detection equipment was frequently turned off
or improperly maintained, and

 7 states reported frequent problems with the equipment to prevent spills
and overfilling.

States also reported that the majority of operational compliance problems
occurred at tanks owned by small, independent businesses; non- retail and
commercial companies, such as cab companies; and local governments. EPA and
the states attribute operations and maintenance problems to insufficient
training for all staff implementing tank requirements, including owners,
operators, installers, removers, and inspectors. Owners and operators are
responsible for making sure that they and their staffs acquire adequate
training. However, the owners and operators from these smaller businesses
and local government operations may find it more difficult to afford
adequate training for themselves and their staff, especially given the high
employee turnover, or give training a lower priority. States and EPA must
also ensure that their own inspectors receive proper training. However, 47
states reported the need for additional training for their staff, and 41
requested additional technical assistance from the federal government to
provide such training.

EPA?s expert and industry panels also called on the agency to take
additional measures to address the problems surrounding tank operations,
maintenance, and staff training. The expert panel concluded that releases
were more likely to occur in smaller, independently owned tanks because
owners and employees may have less training in performing operational and
maintenance activities. The panel recommended the creation of expanded
programs to train and to license tank staff. The industry group also
identified the need to better address operations and maintenance problems
and to provide better training. The group discussed various training methods
that EPA could pursue, such as developing instructional videos for operators
and inspectors, and suggested the establishment of a national program to
certify tank staff and inspectors.

To date, EPA has provided states with a number of training sessions and
helpful tools designed to address these issues, including operations and
maintenance checklists and manuals, and other publications and guidance. EPA
has also publicized its training initiatives and operations and

Page 11 GAO- 01- 464 Environmental Protection

maintenance guides, which companies and the states have found to be
successful. For example, the American Petroleum Institute now offers
recommended practices on underground storage tank management and is in the
process of developing operations and maintenance training for members. The
state of California now requires training courses for all tank owners,
operators, installers, and inspectors. EPA has entered a cooperative
agreement with a university in another state to provide similar training.

One of EPA?s tank program initiatives is intended to improve training and
tank compliance with federal equipment, operational, and maintenance
requirements. With this initiative, EPA wants to

 encourage EPA regions and the states to improve the quality of their tank
compliance data so that the agency can compile an accurate and consistent
compliance measure,

 get states to commit to annual targets so that substantially more tanks
will be in compliance with federal requirements by the end of 2005, and

 provide owners, operators, and inspectors with the technical assistance,
improved guidance, and training needed to achieve compliance.

EPA program managers said the agency is currently working out the details of
how it will implement and achieve this initiative. At the time of our
review, the agency had set up a working group of state and EPA
representatives whose initial tasks, among other things, will be the
establishment of compliance targets.

Twenty- two states and one of the three EPA regions we visited do not know
the extent to which their tanks comply with federal requirements, because
limited staff and resources inhibit the physical inspection of all affected
tanks. Most states and industry stakeholders support establishing a federal
requirement for periodic inspections, but the states would need more
inspectors to ensure compliance. Likewise, only 24 states have the authority
to prohibit fuel delivery to a non- compliant tank- the most effective
enforcement tool. The law governing the tank program does not give EPA clear
authority to regulate fuel delivery. Most states reported that they need
either additional enforcement authority or resources. EPA plans to address
inspection and enforcement issues under its initiatives, and the Congress
could consider actions to allocate additional funds to help states with
their tank inspection and enforcement activities. Most States Do Not

Inspect All Tanks Frequently Enough or Have All the Enforcement Tools Needed
to Correct Problems

Page 12 GAO- 01- 464 Environmental Protection

According to EPA?s program managers, only physical inspections can confirm
whether tanks have been upgraded and are being properly operated and
maintained. The managers stated that tanks should ideally be inspected on an
annual basis to ensure that problems are being identified and resolved
quickly. However, if a state or region lacks the resources to inspect tanks
annually, all tanks should be inspected at a minimum of at least once every
3 years. Twenty- nine states reported that they inspected all of their tanks
on a regular basis, but only 19 states- and two of the three EPA regions we
visited- inspected all tanks at least once every 3 years.

Figure 3: Most States Do not Inspect all Tanks at Least Once Every 3 Years

Source: Responses to a GAO survey of tank program managers in all 50 states
and the District of Columbia

Note: EPA implements the federal tank program in Idaho because this state
lacks the necessary laws.

Most States? Tank Inspections Are Too Infrequent to Ensure Compliance

Page 13 GAO- 01- 464 Environmental Protection

Twenty- two states do not inspect all of their tanks on a regular basis, and
therefore, some tanks may never be inspected. These states typically target
tanks for inspection based on factors such as a tank?s proximity to
groundwater or the number of complaints lodged against it. Overall, we
estimated that states and EPA inspected about 185,000 tanks in fiscal year
2000. However, 17 states inspected only 10 percent of their tanks or less
that year.

The possibility of a tank inspection provides tank owners and operators
incentive to comply with federal requirements. If tank owners and operators
did not think that their tanks would be subject to inspection, some might be
less concerned about ensuring compliance, although others might comply for
fear of being held liable for any damage from spills and contamination.
Nevertheless, broader and more frequent inspection coverage would provide
EPA and the states with more complete compliance data, which could then be
used to better target their enforcement actions and improve tank compliance.
However, states and EPA would need to hire additional staff to conduct more
frequent inspections- every tank at least once every 3 years. For example,
based on current staffing levels, inspectors in 11 states would have to
visit more than 300 facilities a year to inspect all of their tanks within
this time frame. However, this number exceeds EPA?s estimate of 200 facility
visits that a qualified inspector can make in one year.

Most states use their own employees to conduct inspections. Therefore, an
increase in the number of inspectors may be dependent on whether their state
legislatures consent to granting them additional hiring authority and
funding. A few states supplement their programs by delegating inspection
responsibilities to local government employees, such as local fire
department personnel. Three states allow tank owners and operators to hire
licensed or state- certified private inspectors who report the results of
their inspections back to the state. EPA has issued a guidebook to states on
the use of such third party inspectors. However, program managers caution
that this approach raises the potential for a conflict of interest on the
part of the inspectors. For example, the managers said that inspectors may
not readily identify tank violations for fear that tank owners or operators
may not rehire them for future inspections.

Officials in 40 states said that they would support a federal mandate
requiring states to periodically inspect all underground storage tanks. Some
states expect that such a mandate would provide them the leverage they need
to obtain additional staff and funding from their state legislatures. EPA?s
industry panel likewise supported a requirement for

Page 14 GAO- 01- 464 Environmental Protection

periodic- annual if possible- inspections and a set of inspection standards
to promote consistency across the states.

EPA?s program managers stated that the most effective enforcement programs
employ a variety of authorities or tools, including the ability to (1) levy
a fine against a violator; (2) issue field citations to owners or operators
at the time of the inspection for less serious violations; and (3) prohibit
fuel deliveries to non- compliant tanks. Some states have also filed civil
and criminal actions for more egregious violations, although these tend to
be more time- consuming and costly.

Only 8 of the 49 states that are responsible for enforcement activities
reported having all three tools- levying fines, issuing citations, and
prohibiting deliveries- at their disposal. As the following figure
illustrates, 30 states reported that they did not have the authority to
issue field citations and 27 reported that they did not have the authority
to prohibit fuel deliveries. These variances indicate that a tank owner or
operator in one state could be fined for a violation, while an owner or
operator in another state could be forced to cease operations for a similar
violation. In total, 27 states said they needed additional enforcement
authorities, while 46 said they could use additional enforcement resources.
Most States and EPA Lack

the Most Effective Enforcement Authority

Page 15 GAO- 01- 464 Environmental Protection

Figure 4: State Enforcement Authorities Vary Widely

Source: Responses to a GAO survey of tank program managers in all 50 states
and the District of Columbia

Note: EPA implements the federal tank program in Idaho and enforces certain
requirements in New York because these states lack some or all of the
necessary laws.

EPA regions can levy fines or issue citations but cannot prohibit fuel
delivery to non- compliant tanks. According to the program managers, EPA
believes, and we agree, that the law governing the tank program does not
give it clear authority to regulate fuel distributors. They also noted

Page 16 GAO- 01- 464 Environmental Protection

that the regional enforcement of tanks located on tribal land was more
difficult because of the agency?s focus on respecting tribal sovereignty.
For example, program managers in two regions stated that they could not
impose any sanctions against tribal owners; they could only issue notices of
compliance problems. Managers at EPA headquarters confirmed that regional
program managers needed to obtain headquarters approval before any
enforcement action could be taken against a tribal owner.

The expert panel and industry group raised similar concerns about the
effectiveness of program enforcement. The expert panel recommended that the
states be granted the authority to prohibit fuel deliveries to noncompliant
tanks and obtain additional resources. The industry group, which maintained
that the fear of being shut down provided an incentive for owners and
operators to comply with federal requirements, saw a need for more uniform
and consistent enforcement across the regions and states.

EPA is developing several initiatives to encourage states to improve their
tank programs. A state must first demonstrate that it has the capabilities
and enforcement procedures in place to ensure effective program compliance
before EPA will approve a state program. EPA regions oversee the states and
conduct annual reviews of their activities, focusing their efforts on more
problematic states, such as those that inspect fewer tanks. The regions also
have the opportunity, to some extent, to use the state grants as a means to
influence state program implementation. According to EPA program managers,
regions can also conduct inspections in states and, if necessary, take
enforcement action.

Program managers acknowledged that UST- specific resources are limited,
problems with inspections and program enforcement continue, and more work is
necessary. In EPA?s initiative to improve tank compliance with federal
requirements, the agency has said that it will attempt to obtain state
commitments to increase their inspection and enforcement activities if they
do not meet their compliance targets through 2005. However, EPA does not
plan to address the variation in enforcement authorities among states. EPA
has announced that it may elect to supplement enforcement in those states
that fall significantly below their targets, although the agency may be
constrained by available resources.

The Congress may wish to consider whether it can help address EPA and state
resource limitations to develop better inspection and enforcement programs.
The Congress could provide states more funds from the general treasury. The
Congress could also increase the trust fund allotments it EPA and
Congressional

Initiatives Could Improve Inspection and Enforcement Effectiveness and
Increase Available Resources

Page 17 GAO- 01- 464 Environmental Protection

grants to states and give the states the flexibility to use some of these
funds on inspections and enforcement rather than cleanup- an action the
Congress has considered taking in the past. Officials in 40 states said that
they would welcome such funding flexibility. The Congress may have to
include some safeguards, however, to ensure that this reallocation of funds
does not interfere with tank cleanup progress.

Despite the equipment requirements, a number of states reported that some of
the upgraded tanks leaked last year, while other states did not know whether
this was happening with their tanks. EPA has launched studies to determine
the extent of the leaks, the effectiveness of the current equipment, and
whether the existing equipment standards should be strengthened. States and
other stakeholders believe that further equipment requirements are needed
and support EPA?s efforts.

In fiscal year 2000, EPA and the states confirmed a total of more than
14,500 leaks or releases from tanks subject to federal regulation, although
they were uncertain whether the releases occurred before or after the tanks
had been upgraded. According to our survey, 14 states said they had traced
newly discovered leaks or releases to upgraded tanks that year, while
another 17 states said that they seldom or never detected such leaks. Twenty
states, however, could not confirm whether or not their upgraded tanks
leaked.

States that reported leaks attributed them to poor operations and
maintenance, although 33 states suggested that improper equipment
installation may have caused some leaks . The remaining states were
uncertain about the possible causes of continuing leaks.

EPA is concerned that upgraded tanks may still be leaking and recognizes the
need to collect better data to determine the extent and cause of this
problem, including whether the current equipment requirements are sufficient
to prevent leaks. Several states and three EPA regions have studies underway
to try to determine the extent and source of leaks. Researchers studying
tanks in California?s Santa Clara County suspected that 13 of the 16 tanks
they reviewed had undetected leaks after the tanks had been upgraded,
although they could not conclusively determine whether the leaks and
releases came from tanks before or after they had been upgraded. To resolve
this problem, California launched a new statewide study to trace leaks
coming from newly installed upgraded tanks, which the state expects to be
completed by the end of June 2002. Upgraded Tanks

Continue to Leak, Although the Extent of the Problem Is Unknown

Page 18 GAO- 01- 464 Environmental Protection

Researchers with the Santa Clara study concluded that tanks with upgraded
equipment do not provide complete protection against leaks, and tank
monitoring systems, even when properly operated and maintained, cannot
guarantee the detection of leaks. Other stakeholders expressed similar
concerns about leaking tanks. The expert panel recommended that the agency
evaluate the performance of current tank system design and equipment
requirements and revise them where necessary to better prevent leaks. The
industry group also called on EPA to strengthen the requirements, such as
require additional leak containment systems and double- walled tanks. In
response, EPA, as one of its four tank program initiatives, plans to
undertake a nationwide effort to assess the adequacy of existing equipment
requirements to prevent leaks and releases.

The states and EPA cannot ensure that all active tanks have the required
leak-, spill-, and overfill- protection equipment installed, nor can they
guarantee that the installed equipment is being properly operated and
maintained. While the states and EPA regions focus most of their limited
resources on monitoring active tanks, empty or inactive tanks require
attention to ensure that no soil and groundwater contamination has occurred.
Half of the states have not physically inspected all of their tanks and
several others have not conducted frequent enough inspections to ensure the
tanks? compliance with program requirements. Moreover, most states and EPA
lack authority to use the most effective enforcement tools and many state
officials acknowledged that additional enforcement tools and resources were
needed to ensure tank compliance. EPA has the opportunity to correct these
limitations within its own regions and to help states correct them through
its new tank program initiatives. However, the agency has yet to define many
of the implementation details, so it is difficult to determine whether the
proposed actions will be sufficient to ensure more inspection coverage and
more effective enforcement, especially within the states. The Congress has
an opportunity to help alleviate the states? resource shortages by providing
additional funding for inspections and enforcement or more flexibility to
use existing funds to improve these activities.

To better ensure that underground storage tanks meet federal equipment,
operations, and maintenance requirements to prevent leaks and contamination
that pose threats to public health, we are making four recommendations to
the Administrator, EPA. First, we recommend that EPA address the remaining
non- upgraded tanks by working with the states to (1) review available
information and determine those empty or inactive Conclusions

Recommendations for Executive Action

Page 19 GAO- 01- 464 Environmental Protection

tanks that pose the greatest potential health and environmental risks, 2)
set up time tables for the owners, states, or EPA to remove or close these
tanks in accordance with federal procedures, and (3) take enforcement
actions against owners and operators who continue to operate tanks without
the required equipment.

Second, we recommend that EPA supplement the agency?s more general training
support, such as providing manuals and materials, by having each region work
with each of the states in its jurisdiction to determine specific training
needs and tailored ways to meet them.

Third, we recommend that EPA negotiate with each state to reach a minimum
frequency for physical inspections of all its tanks. Periodic physical
inspections of all tanks will provide states better data on noncompliant
tanks, and that, in turn, will help states better enforce federal
requirements.

Fourth, we recommend that EPA present to the Congress an estimate of the
total additional resources the agency and states need to conduct the
training, inspection, and enforcement actions necessary to ensure tank
compliance with federal requirements. EPA can base the estimate on the
information regions obtain from their annual state reviews and grant
negotiations.

The Congress may consider taking the following actions to strengthen EPA?s
and the states? ability to inspect tanks and enforce federal requirements.
First, the Congress may want to increase the resources available to the UST
program and base the amount of the increase on a consideration of the
Administrator?s estimate of additional resources needed. One way to do this
would be to increase the amount of funds the Congress provides from the
trust fund and to authorize states to spend a limited portion of these
monies on training, inspection, and enforcement activities to detect and
prevent leaks, as long as this does not interfere with tank cleanup
progress.

Second, the Congress may want to (1) authorize EPA to establish a federal
requirement for the physical inspections of all tanks on a periodic basis,
(2) authorize EPA to prohibit the delivery of fuel to tanks that do not
comply with federal requirements, and (3) establish a federal requirement
that states have authority to similarly prohibit fuel deliveries. Matters
for

Congressional Consideration

Page 20 GAO- 01- 464 Environmental Protection

We provided a draft of this report to EPA for review and comment. We
subsequently met with the Deputy Director and staff of the Office of
Underground Storage Tanks who generally agreed with our conclusions and that
our recommendations had merit. The agency noted that implementation of the
recommendations would depend on a variety of factors, including the
willingness of state legislatures to grant the state tank programs the
necessary authorities and support. In terms of obtaining additional
enforcement tools, EPA agrees that prohibiting the delivery of fuel to non-
compliant tanks can be a valuable and effective enforcement tool. The agency
does not believe that it currently has the authority to require those state
programs that operate under their own laws to incorporate this tool. The
agency was also reluctant to make the process of awarding state grants too
dependent on the states meeting additional federal requirements, such as
minimum frequencies of inspections, because this could seriously jeopardize
some states' ability to qualify for grants, thus taking critical resources
from these programs. EPA noted that it has recently begun an initiative to
try to obtain more complete data from all of the states on, among other
things, tank compliance with federal requirements. The agency is
establishing compliance performance measures and asking states to provide
data on their performance against these measures in their mid- year program
reports to EPA, the first of which are due by the end of May 2001. The
agency also suggested a number of technical changes that we incorporated.

In addition to the state survey and work in the EPA regions, we (1) reviewed
key tank studies and reports published by EPA, local governments, industry,
and private organizations, (2) reviewed available EPA and state data on
compliance rates, inspections, and enforcement actions, and (3) obtained the
views of EPA?s tank program managers and key environmental association and
industry officials. We conducted our work between June 2000 and April 2001
in accordance with generally accepted government auditing standards.

Unless you announce its contents earlier, we plan no further distribution of
this report until 3 days after the date of this letter. At that time, we
will send copies of the report to appropriate congressional committees and
interested Members of Congress. We will also send copies of this report to
the Honorable Christine Todd Whitman, Administrator, EPA, and the Honorable
Mitchell E. Daniels, Jr., Director, Office of Management and Budget. In
addition, we will make copies available to others on request. Agency
Comments

Page 21 GAO- 01- 464 Environmental Protection

If you or your staff have any questions about this report, please contact me
at (202) 512- 3841. Key contributors to this report were Jim Donaghy, Eileen
Larence, Gerald Laudermilk, Ingrid Jaeger, and Fran Featherston.

John B. Stephenson Director, Natural Resources

and Environment

Appendix I: Survey of State Tank Program Managers

Page 22 GAO- 01- 464 Environmental Protection

Appendix I: Survey of State Tank Program Managers

Appendix I: Survey of State Tank Program Managers

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Page 39 GAO- 01- 464 Environmental Protection (160532)

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