Natural Resources and Environment:

Ability of Underground Petroleum Storage Tank Owners to Comply With Federal Financial Responsibility Requirements

T-RCED-90-9: Published: Oct 31, 1989. Publicly Released: Oct 31, 1989.

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GAO discussed the Environmental Protection Agency's (EPA) requirements for underground petroleum storage tank owners to demonstrate their financial responsibility. GAO noted that EPA: (1) was gradually phasing in its requirements for tank owners to demonstrate their financial ability to clean up tank leaks and compensate anyone harmed by leaks; (2) did not defer the financial responsibility requirements for larger firms, which it believed would not experience compliance difficulties, since they could self-insure or use state funds available for cleanups; (3) planned to make a decision about postponing smaller firms' 1990 compliance deadlines as they approached, since the small firms could still experience compliance difficulties; (4) expected to receive and approve some state requests to operate and enforce underground storage tank programs in lieu of the federal program; (5) reported that more insurance companies offered tank coverage and more states created funds to pay for tank leak damages since it enacted the deadlines; (6) assigned a low priority to enforcement of the financial responsibility requirements and advised its regional offices to pursue alternative, nonpunitive enforcement responses, as opposed to penalties, for those owners that did not comply with financial responsibility requirements; and (7) did not intend to actively check tank owners' compliance or penalize noncompliant firms unless they did not clean up tank leaks.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: EPA has continued to monitor the availability and cost of financial mechanisms through discussions with states, independent experts, etc. As a result of these actions, EPA has extended the deadlines for category 3 and 4 tank owners by 1 year. Owners in category 3 and 4 will have additional time to upgrade tanks in order to be able to meet financial responsibility requirements.

    Recommendation: The Administrator, EPA, should determine what regulatory course to follow by: (1) actively monitoring the cost and availability of tank insurance and other financial responsibility mechanisms as the 1990 deadlines approach; and (2) evaluating how noncompliance will affect tank owners' credit and supplies.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: The Office of Underground Storage Tanks developed a strategy to more actively enforce owners' compliance with the financial responsibility requirements. Specifically, the plan is to assess the role of compliance with the requirements and to bring into compliance those who do not comply and those who willfully disregard the law.

    Recommendation: The Administrator, EPA, should plan and implement a strategy to more actively enforce the financial responsibility requirements.

    Agency Affected: Environmental Protection Agency

 

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