Guest post by Scott E. VanderSea, LSP, LEP of Corporate Environmental Advisors, Inc.

Background on Massachusetts UST Regulation

The Board of Fire Prevention (“BFP”) regulations (527 CMR 9.00) outline the requirements for underground storage tank (“UST”) facility owners and operators to maintain compliance with the Massachusetts UST Compliance Program.  As is often the case, regulations can be lengthy, difficult to read and interpret, and elusive.  More importantly, ensuring compliance with applicable regulations can be time consuming and costly.  Consequently, an outside environmental consultant is often retained to assist with the process of maintaining compliance.  The purpose of this article is to provide an overview of recent developments to the UST regulations and highlight key information and future deadlines which may assist existing and potential UST facility owners and operators with important business decisions.

In July 2009, responsibility for implementing the UST Compliance Program was transferred from the Office of the State Fire Marshal to the Massachusetts Department of Environmental Protection (“MassDEP”).  As a result, MassDEP began the painstaking process of drafting new regulations to replace 527 CMR 9.00.  As of this writing, the proposed regulations (310 CMR 80.00) have yet to be finalized.  UST facility owners and operators should be aware that the proposed MassDEP UST regulations are over four times as lengthy as the ones they are seeking to replace.  During this four year “transitional” period, MassDEP has been responsible for the continued implementation of 527 CMR 9.00 relating to UST compliance.  MassDEP has indicated it intends to promulgate the new UST regulations sometime in 2013.  Coincidentally, the United States Environmental Protection Agency (“EPA”) is in the process of revising its federal UST regulations, which are also anticipated sometime in 2013.

Some Massachusetts UST regulatory highlights include:

• All single-walled steel USTs must be removed by August 7, 2017 (527 CMR 9.05(10));
• New requirements for UST sump and spill bucket inspections every three years;
• Mandated UST system upgrades to better prevent overfills during fuel deliveries;
• New requirements for leak and corrosion protection of heating oil USTs; and
• Self-insurance will no longer be a means of demonstrating Financial Responsibility.

Financial Responsibility

Federal UST regulations (40 CFR 280.90 et seq.) promulgated by the EPA require owners and operators of UST facilities (i.e., retail gas stations, local convenience stores, large retail food establishments) to demonstrate Financial Responsibility.  This ensures that sufficient financial resources will be available to clean up a spill or release to the environment from a UST system should it occur.

Various means of meeting the federal Financial Responsibility (“FR”) requirements include:

• The Petroleum UST Clean-up Fund (Massachusetts 21J Reimbursement);
• Pollution Liability Insurance;
• UST Insurance; and
• Self-insurance.

The Massachusetts 21J Fund currently provides a financial responsibility mechanism to UST facility owners and operators who have demonstrated compliance with the requirements of the reimbursement program.  The Fund was created in 1993 for petroleum UST clean-ups, but it does not provide coverage for above-ground storage tanks (“ASTs”), such as heating oil tanks.  Eligibility into the Fund at its inception did cover costs incurred to clean up pre-existing (historical) and potential future oil releases.  Those UST facilities currently seeking eligibility into the Fund must first demonstrate that no oil releases requiring notification to MassDEP have already occurred by completing a Board Acceptable Site Assessment (“BASA”).  If existing contamination is discovered requiring notification to MassDEP, eligibility into the Fund will not be granted.  If no pre-existing oil contamination is identified, eligibility to the Fund is granted, however, only to serve as a FR mechanism in the event of a future oil release.

Pollution liability insurance is another means of demonstrating compliance with the FR requirements, and such polices can be obtained to cover both existing (historical) and new contamination.  However, the annual premium for a comprehensive policy is not likely to be cost effective compared to other available options, and not many insurers offer such policies.

 UST insurance may be a more affordable option for UST facility owners and operators, although a December 2011 study by the EPA on this matter concluded that it was inconclusive!  As is the case with all forms of insurance, the buyers can select the amount of coverage to suit their needs and budget.  However, the UST insurance marketplace is also limited if the insured intends to remove a UST during the policy period, as most insurers are only willing to cover accidental releases while a UST is in service.

Finally, self-insurance to meet federal FR requirements has been used by some UST facility owners and operators who are able to do so.  Unfortunately, MassDEP will no longer allow self-insurance once the new UST regulations become law leaving existing self-insured UST facility owners and operators with some tough choices to make.

 If you need assistance related to environmental or compliance issues at a UST facility, please contact Scott VanderSea with Corporate Environmental Advisors, Inc. at (508) 835-8822.  For questions involving liability concerns and disputes involving UST releases, contact David McCay, an environmental attorney at Mirick O’Connell, at (508) 791-8500.