Aboveground Oil Storage Tanks: Status of EPA's Efforts to Improve
Regulation and Inspections (Letter Report, 07/18/95, GAO/RCED-95-180).

Pursuant to a congressional request, GAO reviewed the Environmental
Protection Agency's (EPA) actions to address weaknesses in the
regulation and inspection of aboveground oil storage tanks (AST), and
provided information on the age, size, and other characteristics of AST.

GAO found that: (1) EPA has not fully implemented any of its seven
recommendations to improve the safety of aboveground oil storage tanks;
(2) EPA has only partially implemented the recommendations because it
gave higher priority to implementing new legislative requirements and
had difficulty obtaining Office of Management and Budget approval to
collect data for a national inventory of regulated facilities; (3) EPA
has partially implemented one of three recommendations to strengthen its
regulations governing storage tank construction; (4) proposed
regulations emphasize, but do not require, that tank construction comply
with certain standards and recommend that tanks be periodically tested;
(5) EPA has required the facilities that pose the greatest environmental
risk to develop response plans to minimize damages from spilled oil, but
it has no plans to extend the requirement to other facilities; and (6)
EPA expects to implement three recommendations on improving inspection
procedures and documentation, training inspectors, and establishing
penalties for noncompliance by 1996, but it does not know when the
fourth recommendation on targeting inspections will be implemented.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-95-180
     TITLE:  Aboveground Oil Storage Tanks: Status of EPA's Efforts to 
             Improve Regulation and Inspections
      DATE:  07/18/95
   SUBJECT:  Oil pollution
             Pollution control
             Petroleum storage
             Oil spills
             Emergency preparedness
             Inspection
             Fines (penalties)
             Tanks (containers)
             Environmental monitoring
             Safety regulation

             
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Cover
================================================================ COVER


Report to Congressional Requesters

July 1995

ABOVEGROUND OIL STORAGE TANKS -
STATUS OF EPA'S EFFORTS TO IMPROVE
REGULATION AND INSPECTIONS

GAO/RCED-95-180

Above Storage Tanks


Abbreviations
=============================================================== ABBREV

  API - American Petroleum Institute
  AST - aboveground storage tank
  EDF - Environmental Defense Fund
  EPA - Environmental Protection Agency
  GAO - General Accounting Office
  OMB - Office of Management and Budget
  SPCC - spill prevention, control, and countermeasure

Letter
=============================================================== LETTER


B-261262

July 18, 1995

The Honorable Thomas A.  Daschle
The Honorable Charles S.  Robb
United States Senate

The Honorable James P.  Moran
House of Representatives

Because of your concern about the safety of aboveground storage tanks
(AST), you requested that we examine the actions taken by the
Environmental Protection Agency (EPA) to address weaknesses in the
regulation and inspection of oil storage tanks.  This report updates
our February 1989 report, in which we recommended steps to reduce the
likelihood of oil spills in the future.\1

We followed up on our seven previous recommendations that EPA (1)
strengthen its regulations governing the construction of tanks and
measures to minimize damage from oil spills and (2) improve the
inspection program for aboveground oil storage facilities.  (App.  I
lists the applicable recommendations contained in our 1989 report.)
In addition, you asked that we provide available information on the
age, size, and other characteristics of ASTs.  This information is
provided in appendix II. 


--------------------
\1 Inland Oil Spills:  Stronger Regulation and Enforcement Needed to
Avoid Future Incidents (GAO/RCED-89-65, Feb.  22, 1989). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

EPA has not fully implemented any of the seven recommendations from
our 1989 report to improve the safety of aboveground oil storage
tanks, although EPA generally agreed with these recommendations and
has taken some action on each.  EPA officials told us that the agency
did not do more to implement our recommendations primarily because it
placed a higher priority on implementing new legislative
requirements.  They also said that EPA had encountered difficulties
in obtaining approval from the Office of Management and Budget (OMB)
to collect data for a national inventory of regulated facilities. 
The proposed inventory is related to completing certain proposed
rules. 

To strengthen its regulations governing storage tank construction and
contingency plans, EPA has partially implemented one of our three
recommendations but has not implemented the other two.  To strengthen
contingency plans, EPA required about 1 percent of regulated
facilities-- those that pose the greatest risk to the environment--to
develop response plans to minimize the damage from spilled oil, but
the agency did not apply this requirement to other facilities and
does not plan to do so.  To strengthen tank construction and design,
EPA has proposed regulations to implement two other recommendations,
but it is not certain when these regulations will be completed. 

To improve its inspections of facilities, EPA has started to
implement our four recommendations on targeting inspections,
improving inspection procedures and documentation, training
inspectors, and establishing penalties for noncompliance.  EPA
expects three of these recommendations to be implemented by 1996 but
is not certain when the fourth recommendation (on targeting
inspections) will be implemented. 


   BACKGROUND
------------------------------------------------------------ Letter :2

According to EPA's most recent estimate, in 1991 about 435,000
facilities used one or more aboveground tanks to store petroleum,
refined petroleum products, and nonpetroleum oils.  According to a
trade group survey, about 83 percent of the tanks that store
petroleum and petroleum products had a capacity of 500 barrels\2 or
less, while about 5 percent of the tanks had a capacity of 10,000
barrels or more.\3

On occasion, these tanks may collapse suddenly or leak gradually over
a period of years.  For example, two major collapses in 1988
(releasing about 750,000 gallons in Pennsylvania and about 400,000
gallons in California, respectively) contaminated drinking water,
damaged private property, killed wildlife, and disrupted businesses. 
Also, at a facility in Fairfax, Virginia, 100,000 or more gallons
leaked into groundwater over a period of years, affecting an area of
about 21 acres.  Since the leak was discovered in 1990, EPA and
others have undertaken extensive actions to monitor it and clean up
the affected area. 

EPA regulates ASTs primarily under the authority of the Federal Water
Pollution Control Act (also known as the Clean Water Act), as amended
by the Oil Pollution Act of 1990.  The Clean Water Act prohibits the
discharge of oil into navigable waters and authorizes the issuance of
rules establishing procedures, methods, equipment, and other
requirements to prevent the discharge of oil from storage facilities. 
To implement these provisions, EPA promulgated the Oil Pollution
Prevention Regulation in 1973.  A facility is covered by this
regulation if it (1) has an aboveground storage capacity of more than
660 gallons in any single tank, an aggregate aboveground storage
capacity of more than 1,320 gallons, or a total underground storage
capacity of more than 42,000 gallons; (2) could reasonably be
expected to discharge oil in harmful quantities into the navigable
waters of the United States; and (3) is not transportation-related.\4

The regulation requires each AST owner or operator to prepare a spill
prevention, control, and countermeasure (SPCC) plan.  The plan is
required to address (1) the design, operation, and maintenance
procedures to prevent spills from occurring and (2) countermeasures
to control, contain, clean up, and mitigate the effects of an oil
spill that affects navigable water.  The facility must arrange for a
registered professional engineer to certify the plan and any
significant changes to it. 

Following the issuance of our 1989 report, the Congress enacted the
Oil Pollution Act of 1990.  Among other things, the act expanded
activities to prevent and prepare for oil spills and to improve
facilities' capability to respond to spills. 

As a result of major oil spills, such as the Pennsylvania spill
discussed above, along with our 1989 report and similar findings by
EPA itself, the agency proposed revisions to its Oil Pollution
Prevention Regulation in October 1991 and February 1993.  In February
1993, it also proposed rules to implement the 1990 act's requirement
that owners and operators of certain facilities submit "facility
response plans." These plans are required of facilities that, because
of their location, could reasonably be expected to cause substantial
harm to the environment by discharging oil into navigable waters or
adjoining shorelines. 

In July 1994, EPA completed the portions of the 1993 rules governing
facility response plans.  However, EPA has not completed the 1991
proposed rulemaking and portions of the 1993 proposed rulemaking
dealing with storage tank construction and testing, other portions of
the Oil Pollution Prevention Regulation, and efforts to collect data
for a national inventory of regulated facilities.  In its entry in
the May 8, 1995, Unified Agenda of Federal Regulations (a compilation
of upcoming regulatory actions), EPA indicated that it did not expect
to complete the rules before the end of March 1996. 

EPA inspects facilities to help ensure that they comply with the Oil
Pollution Prevention Regulation.  In our 1989 report, we stated that
in fiscal year 1988, EPA inspected approximately 1,000 facilities. 
In fiscal year 1994, EPA's 10 regional offices inspected 1,852
facilities.  The four regions with the most inspections were Region 9
(San Francisco) with 350, Region 6 (Dallas) with 321, Region 10
(Seattle) with 300, and Region 3 (Philadelphia) with 257. 

In its 1990 response to our 1989 report, EPA generally said that it
was considering or taking action to implement our seven
recommendations on the regulation and inspection of ASTs.  In two
cases, it projected that action would be completed by the end of
1990. 


--------------------
\2 A barrel of oil contains 42 gallons. 

\3 R.A.  Christensen and R.F.  Eilbert, Aboveground Storage Tank
Survey, April 1989, prepared by Entropy Limited for the American
Petroleum Institute. 

\4 Generally, transportation-related facilities are those that
transport oil in inter- or intrastate commerce or transfer oil in
bulk to or from a vessel.  Other regulations govern such facilities. 


   EPA'S ACTIONS TO STRENGTHEN
   REGULATIONS GOVERNING TANK
   CONSTRUCTION AND CONTINGENCY
   PLANS
------------------------------------------------------------ Letter :3

EPA has taken steps to strengthen the regulations for tank
construction and contingency plans, although these steps do not fully
implement our three recommendations.  EPA officials said that further
action on two of these recommendations is planned but that the timing
is uncertain. 

EPA officials told us that the implementation of our recommendations
to strengthen these regulations was delayed primarily because of the
requirements imposed by the 1990 act and subsequently delegated to
EPA.  Among other things, the act mandated the issuance of rules
requiring the preparation of facility response plans, required the
development of area contingency plans, and required a study of the
need for liners under ASTs; a report on the results of the study was
due within 1 year.  The officials said that implementation was also
delayed by the difficulties that EPA encountered in obtaining OMB's
approval for a national inventory of regulated facilities.  (The
inventory is related to EPA's inspection program, as explained in the
next section.) An EPA official said that the agency prefers to
complete the proposed rules on tank construction and contingency plan
regulations together with the proposed rule relating to inspections. 

Mandating standards for tank construction and testing.  In 1989, we
reported that EPA's rules did not incorporate specific standards for
constructing and testing ASTs.  Therefore, to decrease the chances of
damaging oil spills in the future, we recommended that EPA require
that ASTs be built and tested in accordance with the industry's or
other specified standards. 

The rules that EPA proposed in 1991 would strengthen the provisions
dealing with tank construction but would not require adherence to the
industry's or other standards, a criterion specified in our
recommendation.  Specifically, the proposed rules would add a new
recommendation that the construction, materials, installation, and
use of tanks conform with the relevant portions of the industry's
standards but would not convert this recommendation into a
requirement.\5

In connection with the testing of ASTs, the proposed rules would
considerably strengthen current provisions, which is consistent with
our 1989 recommendation.  The current Oil Pollution Prevention
Regulation provides that ASTs "should" be subject to "periodic"
integrity testing and "should" be "frequently" observed for leaks. 
By contrast, the proposed rules would "require" integrity testing
every 5 years, unless the facility incorporates secondary containment
features; in such cases, integrity testing would be required every 10
years and when major repairs are made.  In addition, the proposed
rules would require the facilities without secondary containment to
conduct integrity and leak testing of their valves and piping at
least annually. 

Minimizing damage from spilled oil.  In 1989, we reported that EPA's
rules addressed containing spilled oil within tank facilities but did
not require that tank owners and operators develop plans to deal with
oil escaping in large quantities beyond the facilities' boundaries. 
Therefore, we recommended that owners and operators be required to
develop such response plans.  Moreover, because spilled oil could be
spread very rapidly through storm water drainage systems, we
recommended that the rules require, not merely recommend, that such
systems be designed and operated to prevent oil from passing through
them. 

The rules issued pursuant to the 1990 act partially implement our
recommendation on response plans.  These rules, which became
effective in August 1994, require that certain oil storage facility
owners and operators prepare facility response plans for responding
to "worst case" oil discharges or a substantial threat of such a
discharge.\6

According to an EPA official, EPA expected to receive such plans from
about 6,000 facilities--roughly 1 percent of all covered
facilities--that pose the greatest risk to the environment.  (We were
told that approximately 4,500 facilities had submitted plans as of
April 1995.) The official said that EPA had no plans to expand the
overall rules to cover additional facilities.  However, he also noted
that the current rules permit EPA's regional administrators to
require the submission of a response plan by certain other facilities
that have been determined on a case-by-case basis to present an
unusual risk.  He estimated that about 1,000 such facilities might be
required to submit a response plan. 

The 1991 proposed rules address our recommendation on storm water
drainage systems by replacing the guidelines in the current rules
with requirements.  Generally, the rules would require that drainage
from diked storage areas must be restrained by valves or other means
to prevent a spill or other excessive leakage of oil into the
drainage system. 


--------------------
\5 The proposed rules state that the SPCC plan "shall be prepared in
accordance with good engineering practice." They further provide that
"It is recommended that the construction, materials, installation,
and use of tanks conform with relevant portions of industry standards
[from the American Petroleum Institute and other groups] .  .  . 
which are required in the application of good engineering practice
for the construction and operation of the tank." Thus, as the
preamble to the proposed rules points out, the rules would not
specifically incorporate the industry's standards for tank
construction. 

\6 The rules generally apply to facilities that (1) have a total oil
storage capacity of at least 1 million gallons and meet certain other
criteria or (2) have a total oil storage capacity of at least 42,000
gallons and transfer oil over water to or from a vessel or barge. 


   EPA'S ACTIONS TO STRENGTHEN THE
   INSPECTION PROGRAM
------------------------------------------------------------ Letter :4

EPA is taking steps to implement all four of our recommendations to
strengthen the inspection program.  However, according to EPA
officials, three recommendations will not be fully implemented until
1996, and they are uncertain when the fourth recommendation will be
implemented.  The officials explained that meeting the requirements
of the 1990 act was the primary reason why these recommendations were
not implemented earlier.  Difficulty in securing OMB's approval to
collect data for a national inventory of regulated facilities also
delayed implementation. 


      DEVELOPING AN INVENTORY AND
      BETTER TARGETING INSPECTIONS
---------------------------------------------------------- Letter :4.1

In 1989, we reported that EPA had not issued national guidance on how
to select facilities for inspection, even though selectivity is
necessary since the industry is large and inspection resources are
limited.  EPA could not develop effective inspection priorities
because it had little information on the number of facilities or
tanks or on their size, age, location, or quality of construction. 
It needed this type of information to target for inspection those
facilities that posed the greatest environmental risk.  Accordingly,
we recommended that EPA develop a system of inspection priorities on
the basis of a national inventory of tanks. 

We found that EPA is working to develop a national inventory of tanks
and to develop inspection priorities.  In 1991, EPA sought OMB's
approval to collect data from all facilities that might be covered by
the Oil Pollution Prevention Regulation.  However, OMB stated that
EPA had not adequately justified the proposed reporting requirements
and did not approve the request. 

EPA is undertaking a more limited survey of about 30,000 facilities
that are considered most likely to be covered by the Oil Pollution
Prevention Regulation.  After a pilot survey in 1994, the survey
instrument was mailed out in April 1995, and the results of the
survey are expected in late 1995.  The survey requests information on
the facilities' characteristics and operations, the oil tanks'
storage capacity and the product stored, and recent oil spills. 
Depending on the results of this survey, EPA may seek OMB's approval
to collect limited data from all facilities. 

EPA also expects to use this survey to provide information on
regulated facilities.  For example, the information could be used to
provide a basis for developing inspection priorities.  Such targeting
is still needed because only a small fraction of the total number of
facilities is inspected each year.  As previously noted, the number
of facilities inspected by EPA nearly doubled between fiscal years
1988 and 1994.  Despite the increase, however, EPA inspected less
than one-half of 1 percent of all facilities. 

Although EPA has not established overall inspection priorities, it
has identified one national priority.  It established an expectation
that each region will, between fiscal years 1995 and 1997, inspect
all of the facilities located in that region that are required to
prepare a facility response plan. 

Meanwhile, we were told that EPA has taken other steps to help its
regional offices identify the facilities that are likely to be
covered by the Oil Pollution Prevention Regulation.  For example, EPA
obtained Dun & Bradstreet data on the facilities in those industries
that are considered likely to be regulated and provided this
information, for the individual states in each region, to its
regional offices. 

According to officials in Regions 3 and 6, which we visited for this
review, neither region has a complete inventory of the facilities in
the states it covers.\7 Region 3's SPCC coordinator told us that the
region drafted its own targeting strategy in December 1994.  She said
that various criteria are used to select the facilities to be
inspected.  These criteria include a facility's spill history, the
facility's potential to cause significant and substantial harm to the
environment, and referrals from federal, state, or local government
officials or the public. 

Similarly, according to a Region 6 official, the region targets
inspections in the five states it covers by using data on such
factors as spill histories, water supplies, and sensitive ecosystems. 
The region also considers referrals from states and other federal
agencies and citizens' complaints. 


--------------------
\7 Region 3 covers Delaware, Maryland, Pennsylvania, Virginia, West
Virginia, and the District of Columbia.  Region 6 covers Arkansas,
Louisiana, New Mexico, Oklahoma, and Texas. 


      UNIFORM INSPECTION
      PROCEDURES AND DOCUMENTATION
---------------------------------------------------------- Letter :4.2

In 1989, we reported that EPA headquarters had not required its
regions to follow uniform procedures for conducting and documenting
inspections.  Moreover, the four EPA regions we visited at that time
also had not developed written procedures on how to conduct
inspections.  Regional officials told us that they relied on the
experience and knowledge of individual inspectors rather than on
written procedures.  To help ensure that inspections are performed
thoroughly, establish a record of facilities' compliance with the
rules, and help pinpoint overall problem areas in the industry, we
recommended that EPA develop instructions for performing and
documenting inspections. 

We found that EPA headquarters still has not developed such
instructions, although work to develop uniform procedures has begun. 
Headquarters officials collected the various regions' instructions,
circulated them to officials in other regions in May, and asked for
their comments.  The cognizant headquarters official said that he
hopes to complete the development of uniform procedures by late 1995. 

We found both similarities and differences in the inspection
procedures and documentation developed by the two regions we visited. 
For example, staff in both regions collect information about a
facility before inspecting it.  Region 3 staff said that they check
whether the facility has had any reported oil spills and may check
with the state's environmental agency for relevant information. 
Region 6 staff said that they typically visit a facility known to
contain ASTs.  During this visit, they take photographs and record
their observations of the facility's general condition. 

We noted a difference in regional practices with respect to advance
notification.  Region 3 staff told us that they usually do not
contact a facility before arriving to inspect it.  Region 6 staff
told us they do notify the facility in advance that they intend to
conduct an SPCC inspection. 

Both regions developed inspection checklists, which list items to be
checked and also provide a standard format for documenting the
inspection results.  Region 3 uses a single checklist for all types
of facilities that documents both the inspection of the facility and
the review of its spill response plan.  Region 6 uses one checklist
for inspecting a facility and another for reviewing its SPCC plan and
also uses different checklists for different types of facilities. 


      BETTER TRAINING OF
      INSPECTORS
---------------------------------------------------------- Letter :4.3

In 1989, we reported that EPA headquarters had not defined training
needs for inspectors.  As a result, each EPA region established a
training program using different program styles, curricula, and
manuals.  While most regions had developed training manuals, their
contents and use varied from region to region.  We concluded that
while some regional differences in the oil storage industry may
justify some differences in the training of inspectors, because the
Oil Pollution Prevention Regulation is national in scope, inspectors
should possess a common body of knowledge and a minimum level of
skills to implement the regulation.  We recommended that EPA define
and implement minimum training needs for inspectors. 

We found that EPA still has no national guidance on the training of
SPCC inspectors.  However, headquarters officials told us that a work
group has begun developing such guidance and should complete it in
early 1996. 

Meanwhile, EPA has funded some training-related activities in the
regions.  EPA headquarters provided an average of approximately
$900,000 a year in fiscal years 1992 through 1994 to selected regions
to support training and other activities related to enforcing the
Clean Water Act.  For example, Region 6 developed a series of
videotapes that are used to train AST inspectors, among other
purposes, and shared them with other regions. 


      NATIONAL POLICY FOR FINING
      VIOLATORS
---------------------------------------------------------- Letter :4.4

In 1989, we reported that in the four EPA regions we visited, many of
the oil storage facilities that were inspected were found to be out
of compliance with the Oil Pollution Prevention Regulation. 
Nevertheless, EPA rarely imposed penalties (up to $5,000 a day), in
part because it lacked national guidance for this action.  We
recommended that EPA establish a national policy for fining
violators. 

We found that there is still no final policy on fining violators,
although a senior attorney in EPA's Office of Enforcement and
Compliance Assurance told us that draft guidance on fining violators
has been developed and was provided to the regions for their guidance
in 1993.  This official said that he hoped the policy would be
completed by the end of 1995. 

Region 3 officials told us that they rely on the draft penalty
guidance in dealing with companies found not to be in compliance with
the rules.  For example, they said that they had used the guidance in
calculating a substantial penalty against a certain company. 
However, a senior regional attorney told us that, in his opinion,
courts would more readily defer to a final policy than to a draft
policy. 

Region 6 officials told us that they rarely pursue fines against
companies not in compliance, even though they found that about 80
percent of the facilities inspected in fiscal years 1993 and 1994
were out of compliance.  They said that they prefer to work with
companies to bring their facilities into compliance.  Also, they can
conduct many more inspections and bring more facilities into
compliance if they do not divert resources to pursue enforcement
action against companies.  As in Region 3, a Region 6 attorney agreed
that a final policy would carry more weight with the courts. 


   CONCLUSIONS
------------------------------------------------------------ Letter :5

EPA generally agreed with the seven recommendations in our 1989
report on the regulation and inspection of ASTs, and it has taken
some steps to implement them.  In 1994, EPA partially implemented our
recommendation on contingency planning, and by 1996 it expects to
implement three more recommendations (on inspection procedures and
documentation, training for inspectors, and penalties for
noncompliance).  EPA is uncertain when the other three
recommendations (on tank construction and design and on targeting
inspections) will be implemented.  Implementing all of our
recommendations will help EPA ensure that the nation's ASTs are being
properly regulated and inspected and that human health and the
environment are safeguarded from the effects of oil spills. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :6

In performing this follow-up work on the regulation and inspection of
aboveground storage tanks, we (1) reviewed applicable laws and
regulations; (2) interviewed officials in EPA's headquarters
(Washington, D.C., and Crystal City, Virginia), Region 3
(Philadelphia), and Region 6 (Dallas); and (3) reviewed relevant
records.  The activities in these two regions may not be
representative of the activities in all EPA regions, but as agreed
with your offices, we selected these regions because they have
relatively active SPCC programs and because they oversee diverse
types of facilities.  We did not evaluate the effectiveness of EPA's
actions to date.  Also, we did not independently verify the data
provided by EPA officials.  We conducted our work between February
and May 1995 in accordance with generally accepted government
auditing standards. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

We requested comments on a draft of this report from EPA.  On May 31,
1995, we met with the Acting Chief of the Oil Pollution Response and
Abatement Branch to obtain the agency's comments on the draft report. 
During our meeting, he told us that he generally agreed with the
facts presented and the conclusions reached.  He identified several
areas where he believed that we could present a fuller picture of
relevant developments.  We revised these areas accordingly.  In
addition, he provided updated information and technical corrections
in a few cases, which we included where appropriate. 


---------------------------------------------------------- Letter :7.1

As arranged with your offices, we plan no further distribution of
this report until 30 days from the date of this letter, unless you
publicly announce its contents earlier.  Upon release, we will send
copies to the Administrator of EPA and will make copies available to
others on request. 

If you have questions, I can be reached at (202) 512-6111.  Other
major contributors to this report are listed in appendix III. 

Peter F.  Guerrero
Director, Environmental
 Protection Issues


SUMMARY OF RECOMMENDATIONS IN
GAO'S 1989 REPORT
=========================================================== Appendix I

In 1989, we made seven recommendations to the Administrator of the
Environmental Protection Agency (EPA) in order to improve the
regulation and inspection of aboveground oil storage tanks.  These
are listed below. 


      RECOMMENDATIONS TO
      STRENGTHEN REGULATIONS
      GOVERNING TANK CONSTRUCTION
      AND CONTINGENCY PLANS
------------------------------------------------------- Appendix I:0.1

To improve the likelihood that aboveground oil storage tanks are
built to the industry's standards and decrease the chances of future
damaging oil spills, we recommended that the Administrator amend the
applicable regulations to require that

  aboveground oil storage tanks be built and tested in accordance
     with the industry's or other specified standards;

  facilities plan how to react to a spill that overflows their
     boundaries; and

  storm water drainage systems be designed and operated to prevent
     oil from escaping through them. 


      RECOMMENDATIONS TO IMPROVE
      THE INSPECTION PROGRAM
------------------------------------------------------- Appendix I:0.2

To better ensure the safety of the nation's aboveground oil storage
facilities and decrease the chances of oil being discharged into the
environment, we recommended that the Administrator strengthen EPA's
aboveground oil storage facility inspection program by

  developing, in coordination with state and local authorities, a
     system of inspection priorities on the basis of a national
     inventory of tanks;

  developing instructions for performing and documenting inspections;

  defining and implementing minimum training needs for inspectors;
     and

  establishing a national policy for fining violators. 


CHARACTERISTICS OF ABOVEGROUND
STORAGE TANKS
========================================================== Appendix II

As requested by your offices, we are providing data on various
characteristics of aboveground storage tanks from studies done by the
Environmental Protection Agency, the American Petroleum Institute
(API), and the Environmental Defense Fund (EDF).  The data provide
broad estimates on the numbers, ages, and locations of oil storage
facilities; the construction and operation of aboveground tanks at
these facilities; and estimates of leaking tanks and their potential
adverse effects.  We did not assess the accuracy or reliability of
the information presented. 

EPA officials told us that because of a lack of data on ASTs, and in
view of several oil pollution incidents, such as the contamination of
property in Fairfax, Virginia, the agency in recent years has
undertaken several AST studies.  In a January 1991 study, EPA
estimated the numbers of facilities in 16 industrial categories that
meet the storage capacity requirements of the Oil Spill Prevention,
Control and Countermeasures (SPCC) program established under section
311(j) of the Clean Water Act.  In response to proposed October 1991
revisions to the agency's Oil Pollution Prevention Regulation, EPA
refined its estimate of the number of facilities covered by the SPCC
program's requirements by excluding certain facilities with
underground tanks that were covered under other EPA regulations.  In
August 1994, EPA's Aboveground Oil Storage Facilities Workgroup
produced a draft study of the problem of soil and groundwater
contamination due to oil spills and leaks from facilities with ASTs. 
In December 1994, the agency produced a draft study required by
section 4113(a) of the Oil Pollution Act of 1990 that assessed the
technical and economic feasibility of using liners and related
systems to detect leaking oil and to prevent it from contaminating
soil and navigable waters. 

API has also been active in studying ASTs and publishing AST
standards for its members.  In April 1989, API published a widely
cited Aboveground Storage Tank Survey performed under contract by
Entropy Limited that covered the numbers of tanks and their ages,
capacities, and construction in all segments of the petroleum
industry, namely marketing, refining, transportation, and production. 
A second API member survey, published in July 1994, among other
things ranked the sources of groundwater contamination from ASTs.  A
series of API standards issued in 1987 and during the 1990s set
industry standards for such things as tank inspection, repair,
alteration, and reconstruction; tank design, construction, operation,
and maintenance; and the establishment of a program to certify
inspectors. 

EDF published a report on the regulation of ASTs in February 1993. 
EDF's report addressed pollution prevention, groundwater monitoring,
reporting of underground leaks, and cleanup and release containment. 


      NUMBERS OF ABOVEGROUND
      STORAGE TANK SYSTEMS
      CURRENTLY IN USE
------------------------------------------------------ Appendix II:0.1

In 1991, EPA estimated that about 435,000 facilities (a facility
could have one or more tanks) were required to develop SPCC plans
under the Oil Pollution Prevention Regulation.  The regulation
applies to non-transportation-related facilities that have the
potential to discharge oil to waters of the United States in
quantities that may be harmful and that have oil storage capacities
greater than 42,000 gallons underground, greater than 1,320 gallons
aboveground, or greater than 660 gallons in a single tank
aboveground.  Table II.1 shows EPA's estimate. 



                          Table II.1
           
            EPA's Estimate of Aboveground Storage
            Facilities Under the SPCC Program, by
                     Industrial Category

Facility category                           Estimated number
----------------------------------------  ------------------
Farms                                                131,450
Coal mining/nonmetallic minerals mining                4,150
Oil production                                       187,200
Contract construction                                  3,350

Manufacturing
------------------------------------------------------------
Food and kindred products                              3,850
Chemicals and allied products                          4,900
Petroleum refining and related                         2,250
 industries
Stone, clay, glass, concrete                           5,500
Primary metal industries                               1,950
Other manufacturing                                    6,950
Railroad refueling                                       400
Bus transportation                                     1,650
Trucking and warehousing/water                         4,150
 transportation services
Air transportation                                       550
Pipelines                                                600
Electric utility plants                                4,600
Petroleum bulk stations and terminals                 11,900
Gasoline service stations                                  0
Fuel oil dealers                                       5,350
Vehicle rental                                           150

Commercial and institutional
------------------------------------------------------------
Health care                                            2,600
Education                                              5,250
Military installations                                   600
Other commercial and institutions                     45,850
============================================================
Total facilities with ASTs                           435,200
------------------------------------------------------------
API's April 1989 survey estimated that about 700,000 aboveground
tanks (as opposed to EPA's estimate of 435,000 facilities) were used
in the marketing, refining, transportation, and production segments
of the petroleum industry.  Although the survey excluded tanks at
user locations (e.g., vehicle rental locations), API believed them to
be a small part of the total tank population.  API's definition of
capacity of ASTs was basically 1,100 gallons (26 barrels) or greater. 
Table II.2 shows API's estimate. 



                          Table II.2
           
           API's Estimate of the Capacity of About
             700,000 Tanks Used in the Petroleum
                           Industry

                                                       Total
                                                    capacity
                                     Number of    (thousands
Category                                 tanks   of barrels)
------------------------------  --------------  ------------
Marketing                               88,529       486,925
Refining                                29,727       945,092
Transportation                           9,197       556,183
Production                             572,620       280,595
============================================================
Total                                  700,073     2,268,795
------------------------------------------------------------
Marketing includes petroleum products stored for wholesale or for
direct sale to users, including tank farm distribution centers as
well as gasoline retail stations and home heating supply
distributors.  Refining includes refineries at which crude oil is
chemically and physically treated to produce a variety of petroleum
products, including gasoline, diesel fuel, and jet fuels. 
Transportation includes pipeline operations at which large quantities
of crude or refined product are stored until they can be transported
offsite by pipelines to refineries or to marketers.  Production
includes facilities at which crude oil coming from the ground is
gathered and stored until it can be delivered to refineries. 

EDF, using API data, estimated that there were at least 800,000 to
900,000 aboveground petroleum tanks nationwide.  EDF added 100,000 to
200,000 tanks to API's 1989 estimate to account for small
distribution facilities not counted by API.  Besides petroleum tanks,
EDF also estimated that there are an additional 200,000 aboveground
tanks storing hazardous products (e.g., chemical industry products
and raw materials).  Although the Oil Pollution Act of 1990 covers
hazardous products, EPA has actively regulated only oil-containing
ASTs and underground storage tanks under the SPCC program.  According
to an SPCC program official, EPA has not implemented provisions of
the Oil Pollution Act of 1990 requiring facility response plans for
hazardous substances because hazardous substances are covered by
other statutes, such as the Clean Air Act, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980
(Superfund), the Occupational Safety and Health Act, and the Resource
Conservation and Recovery Act of 1976.  EPA, however, is currently
studying a plan to incorporate hazardous substances into facility
response plans. 


      STORAGE TANK TYPES, SIZES,
      CONSTRUCTION METHODS, AND
      AGES
------------------------------------------------------ Appendix II:0.2

API's 1989 survey estimated that over 80 percent of ASTs have storage
capacities of 500 barrels (21,000 gallons) or less, as shown in table
II.3. 



                          Table II.3
           
              API's Estimate of Tank Capacities

Size (barrels)                            Number     Percent
------------------------------------  ----------  ----------
26-500                                   579,445        82.8
>500 to 1,000                             44,812         6.4
>1,000 to 10,000                          42,513         6.1
>10,000 to 100,000                        29,120         4.1
>100,000                                   4,183         0.6
============================================================
Total                                    700,073       100.0
------------------------------------------------------------
The survey also shows that while about 83 percent of the generally
smaller production tanks were shop-fabricated, about 95 percent of
the generally larger refining tanks were reconstructed, meaning that
the tanks were dismantled at one place of service and rebuilt at
another, or were riveted, bolted, or welded in the field. 
Furthermore, the ages of tanks differed significantly by industry
sector.  API's survey showed that of the tanks whose ages were known,
8 percent of tanks used in production were over 30 years old, while
64 percent of tanks used in refining were over 30 years old.  Table
II.4 shows the results of API's survey of tank ages. 



                          Table II.4
           
             API's Estimate of Ages of Tanks, by
                           Category

                  Marketin            Transportati  Producti
Age (years)              g  Refining            on        on
----------------  --------  --------  ------------  --------
0-10                 9,583     2,066           876   212,440
11-20               13,465     3,446         1,376   167,863
21-30               21,167     4,814         1,831   112,131
31-40               15,578     6,877         2,096    28,865
41+                 21,149    11,129         2,666    13,109
Unknown              7,587     1,395           352    38,212
============================================================
Total               88,529    29,727         9,197   572,620
------------------------------------------------------------
According to an SPCC program project manager, the tanks in API's
universe are representative of larger facilities that may have
proportionately larger tanks than those included in EPA's estimate of
facilities covered by the SPCC program.  The official said that
larger tanks tend to be field-erected, while smaller tanks are built
in factories as prefabricated units and delivered to sites. 


      TYPES OF PRODUCTS STORED IN
      ASTS
------------------------------------------------------ Appendix II:0.3

As shown in table II.5, API's April 1989 survey estimated that the
following petroleum products were stored in ASTs at marketing,
refining, and transportation facilities.  The product stored at
production facilities is primarily crude oil. 



                          Table II.5
           
             API's Estimate of Types of Petroleum
             Products Stored in ASTs, by Category

                    (Thousands of barrels)

                            Marketin            Transportati
Product                            g  Refining            on
--------------------------  --------  --------  ------------
Viscous
------------------------------------------------------------
Heavy oils                     9,868   102,195        54,769

Fluid
------------------------------------------------------------
Heavy oils                     7,092   281,170       255,649
Lube oils                     11,007    42,598           565
Distillates                  176,143   213,225       101,206
Gasolines                    246,415   244,576       123,758
Waste water                    1,771    15,711         2,404
Other                         21,098    18,924         3,893
------------------------------------------------------------

      LOCATION OF ASTS
------------------------------------------------------ Appendix II:0.4

API's April 1989 Survey estimated state-by-state totals for ASTs used
in production.  The 31 states covered by API are shown in table II.6. 



                          Table II.6
           
           API's Estimate of State-by-State Totals
                 for ASTs Used in Production

                                                   Number of
State                                                  tanks
--------------------------------------------  --------------
Alabama                                                  541
Alaska                                                   183
Arizona                                                   16
Arkansas                                               8,109
California                                            27,390
Colorado                                              14,178
Florida                                                  122
Illinois                                              16,083
Indiana                                                5,153
Kansas                                                61,309
Kentucky                                              19,964
Louisiana                                             19,905
Michigan                                               5,244
Mississippi                                            1,572
Missouri                                                 144
Montana                                                7,770
Nebraska                                               2,078
Nevada                                                    54
New Mexico                                            14,893
New York                                               2,142
North Dakota                                           3,903
Ohio                                                  49,841
Oklahoma                                             139,646
Pennsylvania                                          10,867
South Dakota                                             116
Tennessee                                                426
Texas                                                139,287
Utah                                                   1,848
Virginia                                                  51
West Virginia                                         13,810
Wyoming                                                5,975
Total                                                572,620
------------------------------------------------------------

      NUMBERS OF ASTS THAT HAVE
      LEAKED OR ARE CURRENTLY
      LEAKING
------------------------------------------------------ Appendix II:0.5

According to EPA officials, comprehensive data do not exist to
quantify adequately the extent to which ASTs are leaking. 
Accordingly, EPA developed an approach to estimate the number of ASTs
leaking oil and the corresponding volume of the products leaked.  EPA
developed a relationship between the age of ASTs and tank failure
rates.  Key data sources for this analysis were API's April 1989
survey, which provided data on the age and storage capacity of ASTs,
and a 1988 study of tank failure rates.\8

Table II.7 shows EPA's preliminary estimates of leaking ASTs by
storage capacity tier from the draft December 1994 liner study.\9



                          Table II.7
           
              EPA's Estimates of Leaking ASTs by
                    Storage Capacity Tier

Storage
capacity    Marketin  Refini  Producti  Transportati
(gallons)          g      ng        on            on   Total
----------  --------  ------  --------  ------------  ------
1,092-        10,406     691    40,998           113  52,208
 21,000
21,000-          711     435     3,037            50   4,233
 42,000
42,000-        1,194   1,702     1,933           241   5,070
 420,000
420,000-       1,848   2,047        92           828   4,815
 4.2
 million
Over 4.2          71     361         0           276     708
 million
Total         14,230   5,236    46,060         1,508  67,034
------------------------------------------------------------

--------------------
\8 Final Report:  Tank Corrosion Study, 1988, Suffolk County, New
York, Department of Health Services. 

\9 EPA officials stated that these estimates are undergoing
management review and are subject to change. 


      LOCATION OF LEAKS
------------------------------------------------------ Appendix II:0.6

EPA has found that leaks typically originate from the bottom of
vertical ASTs as a result of perforations often caused by corrosion. 
Underground piping was also identified as a significant potential
source of leaking oil at AST facilities. 

API's July 1994 AST survey report stated that during the past 5
years, groundwater contamination appears to have been caused by a
variety of minor sources.  Additionally, the survey data noted that
AST bottom leaks were not a major source of contamination.  Survey
respondents indicated that less than 3.6 percent of ASTs (in all age
categories) had confirmed bottom failures within the past 5 years. 
The survey report stated that pressurized buried piping has been the
most predominant source of contamination in all three sectors over
the past 5 years. 


      AMOUNT OF PRODUCT DISCHARGED
      BECAUSE OF THESE LEAKS AND
      THE THREAT TO THE
      ENVIRONMENT AND HUMAN HEALTH
      POSED BY THE LEAKS
------------------------------------------------------ Appendix II:0.7

EPA estimated oil leaks for 75,000 tanks in the petroleum industry
with a storage capacity in excess of 42,000 gallons.  On the basis of
the age of ASTs, the likelihood of developing corrosion leaks, and
leak detection thresholds, EPA's preliminary estimates show that ASTs
could be leaking between 43 million and 54 million gallons of oil
annually. 

Regarding threat, EPA has found that oil discharge incidents have the
potential to cause widespread damage, including contamination of
soil, groundwater, and surface water supplies and loss of property. 
Because several hundred thousand onshore facilities with ASTs are
located throughout the United States-- many are near sensitive
environments, including groundwater and surface water--discharges
from ASTs represent a potentially significant environmental hazard. 
In addition, EPA has stated that oil spill incidents can pose risks
to human health. 

According to EPA, although the extent of injuries is unknown, most
known injuries to human beings from exposure to oil have occurred as
a result of their inhaling its vapors.  Effects on humans from
exposure to oil include generalized weakness, lethargy, dizziness,
convulsions, coma, and death from acute exposure to volatilized
constituents by inhalation; cancers of various organs; blood cancers
such as leukemia; and generalized suppression of the immune system
from chronic exposure by inhalation. 


      CHARACTERISTICS OF PIPING
      FOR TANK SYSTEMS
------------------------------------------------------ Appendix II:0.8

API's July 1994 member survey found that 78 percent of refining and
54 percent of marketing facilities have 75 percent or more of their
AST-associated piping aboveground.  In contrast, most transportation
facilities leave the AST-associated piping below ground.  According
to the report, there are several reasons why the AST-associated
piping is buried at transportation facilities.  For example, these
facilities are frequently remotely located, and as a result, piping
is buried to prevent vandalism.  The report noted that in certain
situations, piping can be moved aboveground.  However, safety and
operational considerations may require that piping be buried. 
Inspections, emergency access, repair, exposure to radiant heat,
expected settlement, earthquakes, thermal expansion/contraction, tank
drainage, and susceptibility to vandalism are all considered when
deciding to install piping above or below ground.  The survey report
stated that where operational and safety considerations allow, the
relocation of older buried piping aboveground has been an ongoing
practice at facilities in the refining, marketing, and transportation
sectors for a number of years. 


      TYPES OF SECONDARY
      CONTAINMENT STRUCTURES BEING
      USED UNDER TANKS
------------------------------------------------------ Appendix II:0.9

Secondary containment structures are typically designed to contain
the entire contents of the tank or tank battery within the structure
and serve to contain any spilled oil or product in the event of a
leak or sudden discharge.  EPA found that secondary containment
structures vary greatly, depending on the size of the tanks and the
physical characteristics of the facility, and may be constructed of
compacted soil, clay, concrete, or other synthetic material.  Each of
the different types of liners, such as impervious soil, coated or
uncoated concrete, and geomembrane liners, can be effective in
preventing groundwater contamination and in detecting leaks if
properly installed and maintained.  Poor maintenance can
significantly reduce the effectiveness of certain types of liners. 


      TYPES OF LEAK DETECTION
      DEVICES BEING USED
----------------------------------------------------- Appendix II:0.10

According to EPA, current technology has produced a variety of leak
detection systems, including alarms, inventory control, acoustic
emissions testing, and volumetric measurement, and industry is
aggressively developing technology to make leak detection more
reliable. 

Leak detection methods are either continuous or periodic.  Continuous
methods provide uninterrupted monitoring and, consequently, instant
notification of tank failure or an oil discharge.  Examples of
continuous systems are overfill alarms and overfill sumps. 

Periodic leak detection involves checks or tests at regular intervals
to determine the occurrence of oil discharges or tank bottom failure. 
Periodic systems include internal/external visual inspections,
pressure/vacuum testing of tanks and piping, volumetric precision
testing of the tank, inventory record and measurement reconciliation,
acoustic emissions testing, and chemical gas detection methods. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION, WASHINGTON,
D.C. 

Lawrence J.  Dyckman, Associate Director
David Marwick, Assistant Director
Robert J.  Tice, Evaluator-in-Charge

OFFICE OF THE GENERAL COUNSEL

Karen Keegan, Senior Attorney

