Order Code RS21201
Updated September 23, 2005
CRS Report for Congress
Received through the CRS Web
Leaking Underground Storage Tanks:
Program Status and Issues
Mary Tiemann
Specialist in Environmental Policy
Resources, Science, and Industry Division
Summary
To address a nationwide pollution problem caused by leaking underground storage
tanks (USTs), Congress created a leak prevention, detection, and cleanup program in
1984. In 1986, Congress established the Leaking Underground Storage Tank (LUST)
Trust Fund to help the Environmental Protection Agency (EPA) and states pay the costs
of cleaning up leaking petroleum USTs where owners fail to do so, and to oversee LUST
cleanup activities. Much progress has been made in the program, but challenges remain.
A major issue concerns the discovery of methyl tertiary butyl ether (MTBE) at thousands
of LUST sites. This gasoline additive, used to reduce air pollution from auto emissions,
is very water soluble, and leaks involving MTBE are more costly to remediate. Another
issue is that state resources have not met the demands of overseeing the UST regulatory
program. States have long sought larger appropriations from the trust fund to support
the LUST program, and some have sought more flexibility in using LUST funds. The
presence of MTBE in water supplies heightened congressional interest in authorizing
fund appropriations to address MTBE leaks and enforce the leak prevention program.
After years of congressional efforts, the 109th Congress agreed on legislation to
address these issues. The Energy Policy Act of 2005, H.R. 6 (P.L. 109-58) adds new
leak prevention provisions to the federal UST regulatory program and authorizes EPA
and states to use appropriations from the LUST Trust Fund to clean up MTBE leaks and
to enforce the UST program. The House version of H.R. 6 would have provided a
products liability safe harbor for MTBE and renewable fuels manufacturers. The Senate
bill would have granted a safe harbor for renewable fuels only. The final legislation
does not include a fuels safe harbor provision. This report reviews LUST and MTBE
issues and bills, and will be updated.
Background
In the 1980s, EPA determined that many of the roughly 2.2 million underground
storage tanks in the United States were leaking. Many other tanks were nearing the end
of their useful life expectancy and were expected to leak in the near future. Approximately
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50% of the U.S. population relies on ground water for their drinking water, and states
were reporting that leaking tanks were the leading source of groundwater contamination.
In 1984, Congress responded to this growing environmental and safety threat and
established a leak prevention, detection, and cleanup program for USTs containing
chemicals or petroleum through amendments to the Solid Waste Disposal Act (42 U.S.C.
6901 et seq., also known as the Resource Conservation and Recovery Act). Subtitle I,
directed EPA to establish operating requirements and technical standards for tank design
and installation, leak detection, spill and overfill control, corrective action, and tank
closure. The universe of regulated tanks was extremely large and diverse, and included
many small businesses. Consequently, EPA phased in the tank regulations over a 10-year
period (from 1988 through 1998). Strict standards for new tanks took effect in December
1988, and all tanks were required to comply with leak detection regulations by late 1993.
All tanks installed before 1988 had to be upgraded (with spill, overfill, and corrosion
protection), replaced, or closed by December 22, 1998.
In 1986, Congress established a response program for leaking petroleum USTs
through the Superfund Amendments and Reauthorization Act (P.L. 99-499), which
amended Subtitle I. These amendments authorized EPA and states to respond to
petroleum spills and leaks, and created the Leaking Underground Storage Tank (LUST)
Trust Fund to help EPA and states cover the costs of responding to leaking USTs in cases
where the UST owner or operator does not clean up a site. Congress appropriates funds
from the trust fund each year, and EPA and the states use these funds primarily to oversee
and enforce corrective actions performed by responsible parties. EPA and the states also
use the appropriated funds to conduct corrective actions where no responsible party has
been identified, where a responsible party fails to comply with a cleanup order, or in the
event of an emergency; and to take cost recovery actions against parties. EPA or states
have been successful in getting responsible parties to perform most cleanups. In these
cases, the cleanup costs typically have been paid for by a state fund (discussed below), the
responsible party, and/or private insurance.
The 1986 law further directed EPA to establish financial responsibility requirements
to ensure that UST owners and operators are able to cover the costs of taking corrective
action and compensating third parties for injuries and property damage caused by leaking
tanks. As mandated, EPA issued regulations requiring most tank owners and operators
selling petroleum products to demonstrate minimum financial responsibility of $1 million.
Alternatively, owners and operators may rely on state assurance funds to demonstrate
financial responsibility, saving them the cost of purchasing private insurance.
State Funds. Most states established financial assurance funds. Unlike the federal
LUST Trust Fund, state funds often are used to reimburse financially solvent tank owners
and operators for some or all of the costs of remediating leaking tank sites. Revenues for
state funds typically have been generated through gas taxes and tank fees and,
collectively, these funds have provided more cleanup funds than the LUST Trust Fund.
In recent years, states have collected and spent roughly $1 billion annually through their
funds. In FY2004, total annual revenues for state funds reached $1.47 billion, while
outstanding claims against state funds reached $1.76 billion, and in 12 states, outstanding
claims exceeded fund balances. Twenty states have extended their fund’s original sunset
date to address the backlog of leaking tanks. Ten states have made a transition to private
insurance.

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LUST Trust Fund: Funding and Uses
The LUST Trust Fund is funded primarily through a 0.1 cent-per-gallon motor fuels
tax that began in 1987. The tax generated roughly $150 million per year before the taxing
authority expired in December 1995. Congress reinstated the LUST tax through the
Taxpayer Relief Act of 1997 (P.L. 105-34) from October 1, 1997, through March 31,
2005. On March 31, 2005, the President signed P.L. 109-6 (H.R. 1270), extending the tax
through September 2005. The Energy Policy Act of 2005 (P.L. 109-58, H.R. 6) extends
the tax through March 31, 2011. During FY2004, the tax generated $193 million in
revenues, and the fund earned $66.7 million in interest (on an accrual basis). As of August
31, 2005, the fund’s net assets were approximately $2.5 billion.
For FY2003, Congress authorized appropriations of $72.3 million from the trust fund
to support the LUST program. For FY2004, the President requested $72.5 million and
received nearly $76 million. For FY2005, the President again asked for $72.5 million,
and Congress provided $70 million. For FY2006, the President requested and, in P.L.
109-54, Congress provided $73 million. In recent years, EPA has allocated approximately
81% (roughly $58 million) of the trust fund appropriation to the states in the form of
cooperative agreements, and 4% to support LUST-eligible activities on Indian lands. EPA
has used the remaining 15% for its program responsibilities.
Under cooperative agreements with EPA, the states receive grants to help cover the
cost of administering the LUST program. States use most of their LUST program grants
to hire staff for technical oversight of corrective actions performed by responsible parties.
They typically use about one-third of the LUST money they receive for cleaning up
abandoned tank sites and undertaking emergency responses.
EPA uses its portion of the appropriation to oversee cooperative agreements with
states, implement the LUST corrective action program on Indian lands, and support state
and regional offices. EPA priorities in the LUST program include reducing the backlog
of confirmed releases; promoting better and less expensive cleanups; providing assistance
to Indian tribes; assisting with the cleanup of more complicated sites, especially sites
contaminated with MTBE; and supporting state programs with technical assistance.
Program Status
EPA reports that since the federal underground storage tank program began, nearly
1.6 million of the roughly 2.2 million petroleum tanks subject to regulation have been
closed, and, overall, the frequency and severity of leaks from UST systems have been
reduced greatly. Through FY2004, 672,297 tanks remained in service and subject to UST
regulations, 447,233 releases had been confirmed, 412,657 cleanups had been initiated,
and 317,405 cleanups had been completed. The backlog of sites requiring remedial action
dropped to 129,827 sites (a 5% decline from the FY2003 level of 136,265). During
FY2004, there were 7,850 newly confirmed releases, compared to 12,000 in FY2003.1
Implementation and Compliance Issues. EPA estimated that, through
FY2000, 89% of USTs had upgraded tank equipment to meet federal requirements.
However, the Government Accountability Office (GAO) reported that, because of poor
1 For state-by-state information, see [http://www.epa.gov/oust/cat/camarchv.htm].

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training of tank owners, operators, and other personnel, about 200,000 (29%) USTs were
not being operated or maintained properly, thus increasing the risk of leaks and ground
water contamination. GAO also reported that only 19 states physically inspected all their
tanks every three years (the minimum EPA considers necessary for effective tank
monitoring), and that, consequently, EPA and states lacked the information needed to
evaluate the effectiveness of the tank program and take appropriate enforcement actions.2
In 2000, EPA began several initiatives to improve the effectiveness of the tank
program. Under an initiative to improve compliance, EPA issued a new definition of
compliance (“significant operational compliance”) to place greater emphasis on the proper
operation and maintenance of tank equipment and systems. Using this definition, EPA
estimated that, by the end of FY2004, 23% of UST facilities were not in compliance with
the 1998 release prevention requirements, 28% were not in compliance with the leak
detection requirements, and 36% had not complied with the combined requirements.
EPA also has been evaluating the performance of tank regulations to determine
where improvements are needed. A key concern is that, although new and upgraded tanks
are much more protective than earlier tanks, some leaks are being discovered from new
and upgraded tank systems. A substantial portion of these leaks may be due to
operational problems. However, studies are underway to evaluate performance of different
types of tanks to determine the causes of leaks, the effectiveness of leak detection
systems, and actions that might be needed to better prevent and detect leaks.
Methyl Tertiary Butyl Ether (MTBE)
In the 1990s, as states and EPA were making good progress in addressing tank leaks,
another problem emerged. The gasoline additive MTBE was being detected at thousands
of LUST sites and in numerous drinking water supplies, usually at low levels. MTBE has
been widely used to produce gasoline that contains oxygenates, as required by the 1990
Clean Air Act Amendments as a way to improve combustion and reduce emissions. Once
released, however, MTBE moves through soil and into water more rapidly than other
gasoline components, and it is more difficult and costly to remediate than conventional
gasoline. Because of its mobility, MTBE is more likely to reach water supplies than
conventional gas leaks. Although MTBE is thought to be less toxic than some gasoline
components (such as benzene), even small amounts can render water undrinkable because
of its strong taste and odor. Also, in 1993, EPA’s Office of Research and Development
concluded that the data support classifying MTBE as a possible human carcinogen.3
Although EPA has not done so, at least seven states have established a drinking water
standard for MTBE, and many states have established cleanup standards or guidelines.
At least 42 states now require testing for MTBE in ground water at LUST sites. In
a 2000 survey, 31 states reported that MTBE was found in ground water at 40% or more
of LUST sites in their states; 24 states reported MTBE at 60% to 100% of sites. A 2003
update of this survey found that many sites have not been tested for MTBE, and most
2 U.S. GAO, Environmental Protection: Improved Inspections and Enforcement Would Better
Ensure the Safety of Underground Storage Tanks, GAO-01-464, May 2001, p. 2-6.
3 U.S. Environmental Protection Agency, Assessment of Potential Health Risks of Gasoline
Oxygenated with Methyl Tertiary Butyl Ether (MTBE), EPA/600/R-93/206, 1009.

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states did not plan to reopen previously closed LUST sites to look for MTBE.4 A concern
for water suppliers is that fewer than half the states are taking steps to ensure that MTBE
is not migrating beyond the normal monitoring boundaries for LUST cleanup. The total
cost of treating MTBE-contaminated drinking water is unknown, but is expected to be in
the billions. Two recent studies by water utilities place their best estimates of the costs,
given the limited data, at $25 billion5 and $33.2 billion.6
Regulators expect that, as tank owners and operators comply more fully with UST
requirements, the number of leaks from tanks should decline significantly. According to
EPA, the number of reported new releases declined 35% from FY2003 to FY2004, as a
result of improved leak detection and prevention measures.
Legislation
The 109th Congress has acted on LUST and MTBE related legislation. On March 31,
2005, H.R. 1270 (P.L. 109-6) was enacted, extending the 0.1 cent-per-gallon motor fuels
tax that finances the LUST Trust Fund through September 2005. H.R. 6, the Energy
Policy Act of 2005 (P.L. 109-58) extends the tax through March 31, 2011.
As proposed by both the House and the Senate, P.L. 109-58 (Title XV, Subtitle B)
amends Subtitle I of the Solid Waste Disposal Act to expressly allow EPA and states to
use LUST funds to address MTBE leaks and enforce the UST leak prevention program,
and to authorize appropriations for these purposes. Subtitle B, which was incorporated
from the House version of H.R. 6, authorizes LUST Trust Fund appropriations of $200
million annually for FY2005 through FY2009 for the LUST cleanup program, and another
$200 million annually for FY2005 through FY2009, specifically for addressing MTBE
and other oxygenated fuels leaks (e.g., other ethers and ethanol). The Senate bill would
have authorized a one-time appropriation of $200 million from the LUST Trust Fund to
address releases of fuels containing MTBE and other ether additives but not other
oxygenates (i.e., not ethanol), and would not have required that the contamination be from
USTs to be eligible for cleanup assistance.
The Energy Policy Act of 2005 further follows the House version of H.R. 6 by
adding various new leak prevention provisions to the UST regulatory program and
imposing new requirements on states, EPA, and tank owners. It requires EPA or the state
to conduct UST compliance inspections every three years; prohibits fuel delivery to
ineligible tanks; directs states to develop training requirements for UST operators and
individuals responsible for tank maintenance and spill response; requires states to prepare
and submit to EPA compliance reports on government-owned tanks in the state; and
requires EPA to develop and implement a strategy to address releases on tribal lands. The
legislation also requires that, when determining the portion of cleanup costs to recover
4 The New England Interstate Water Pollution Control Commission’s 2000 Survey of State
Experiences with MTBE Contamination at LUST Sites, and the 2003 Survey of Oxygenates at
LUST Sites are available at [http://www.neiwpcc.org/Index.htm?MTBE.htm~mainFrame].
5 American Water Works Association, A Review of Cost Estimates of MTBE Contamination of
Public Wells, June 21, 2005.
6 Association of Metropolitan Water Agencies, Cost Estimate to Remove MTBE Contamination
from Public Drinking Water Systems in the United States, June 20, 2005.

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from a tank owner or operator, EPA or a state must consider the owner or operator’s
ability to pay for cleanup and still maintain business operations.
The House version would have phased out MTBE by 2014 (except in trace quantities
and except in states that authorized its use, and unless the President decided not to ban it).
The Senate version would have banned MTBE as a fuel additive in four years (except in
trace quantities and in states that authorize its use). As enacted, H.R. 6 does not limit
MTBE use; however, at least 25 states have enacted limits or phase-outs of the additive.
The legislation does eliminate the Clean Air Act oxygenate requirement, which prompted
the increased use of MTBE. (For more details, see CRS Report RL32865, Renewable
Fuels and MTBE: A Comparison of Selected Provisions in H.R. 6.)
The House version of H.R. 6 also included a retroactive safe harbor provision to
protect manufacturers and distributors of fuels containing MTBE and renewable fuels
(e.g., biodiesel fuels and ethanol) from products liability claims. The provision stated that
it would not affect other liability (such as liability for cleanup costs, water contamination,
or negligence for spills). With liability ruled out for design defects, manufacturing
defects, and failure to warn of hazardous products, MTBE manufacturers would likely be
more difficult to reach under these other bases of liability.7 The safe harbor provision was
opposed by public water suppliers, many state attorneys general, the Western Coalition
of Arid States, the National Association of Counties, the National Association of Towns
and Townships, the National League of Cities, the National Water Resources Association,
and the U.S. Conference of Mayors. Opponents argued that providing a products liability
shield would effectively leave gas station owners liable for cleanup, and because these
businesses often have few resources, the effect of the safe harbor provision would have
been that the burden for cleanup would fall to local communities, drinking water utilities,
and the states. Proponents of the provision argued that such a safe harbor was reasonable,
given that the additive has been used heavily to meet federal clean air mandates. They
further argued that the focus should be placed on preventing leaks from underground
storage tanks, which are the primary source of MTBE contamination. The safe harbor
provision contributed to the failure of the conference report for H.R. 6 in the Senate in the
108th Congress, and threatened to have the same effect this Congress. Conferees dropped
the safe harbor provision and added a provision allowing MTBE claims and legal actions
filed after the date of enactment to be removed to federal courts (Section 1503).8 (The
Senate version had included a safe harbor provision that applied to renewable fuels only.)
Also in the 109th Congress, H.R. 879 and S. 439 have been introduced to strengthen
technical requirements for tanks to better prevent leaks. These bills would require
secondary containment for new tank systems and replacement tanks and pipes located
near public water systems and private wells.
7 For a discussion of legal issues, see CRS Report RS21676, The Safe Harbor Provision for
Methyl Tertiary Butyl Ether (MTBE), by Aaron Flynn.
8 For more information on MTBE air and water issues, see CRS Report RL32787, MTBE in
Gasoline: Clean Air and Drinking Water Issues, by James E. McCarthy and Mary Tiemann.

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