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Superfund: Insuring Underground Petroleum Tanks

RCED-88-39 Published: Jan 15, 1988. Publicly Released: Jan 15, 1988.
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Highlights

Pursuant to a legislative requirement, GAO determined the availability of pollution liability insurance for owners and operators of petroleum storage and distribution facilities, focusing on: (1) the current and projected availability of tank insurance; (2) tank owners' and operators' ability to maintain financial responsibility through methods other than insurance; (3) the experience of marine vessel owners and operators in getting insurance for similar liabilities; and (4) available options to assist tank owners and operators in demonstrating financial responsibility.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Environmental Protection Agency The Administrator, EPA, should implement financial responsibility requirements over a timetable that: (1) is realistic in terms of availability of insurance and other financial assurance methods; (2) provides incentives for prompt and appropriate technical improvements by tank owners and operators; and (3) allows for the development of appropriate state regulatory and enforcement programs.
Closed – Implemented
Final rule issued on October 26, 1988 included phase-in compliance. The rule took effect on January 24, 1989.
Environmental Protection Agency The Administrator, EPA, should modify the timetable for tank upgrading or replacement by establishing a staggered schedule under which older tanks will be upgraded or replaced first.
Closed – Implemented
Final rule issued September 23, 1988 on tank upgrade included a requirement that older tanks be replaced or upgraded first.
Environmental Protection Agency The Administrator, EPA, should continue to investigate the appropriate levels of liability for tank owners and proper requirements for self-insurance.
Closed – Not Implemented
EPA contends that it could not change level of insurance because the amount is set in the law. Also, there have been no complaints about self-insurance tests in the October 1988 rule. No one has sued EPA, which further supports EPA contention that the level is appropriate.

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Topics

Environmental lawFinancial managementHazardous substancesInsurance companiesLiability insurancePetroleum storageSafety regulationSafety standardsTanks (containers)Water pollution