Order Code RS21201
Updated March 14, 2006
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 water 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
oversee LUST cleanup activities and pay the costs of cleaning up leaking petroleum
USTs where owners fail to do so. Much progress has been made in the program, but
challenges remain. A key issue has been that state resources have not met the demands
of administering the UST regulatory program. States have sought larger appropriations
from the trust fund to support the LUST cleanup program, and some have sought
flexibility to use LUST funds for the UST leak prevention program. Another issue
concerns the discovery of methyl tertiary butyl ether (MTBE) at thousands of LUST
sites. This gasoline additive, used to reduce air pollution from vehicle emissions, is very
water soluble. Leaks involving MTBE tend to travel farther than conventional gasoline
leaks and are more likely to reach water supplies and more costly to remediate. The
presence of MTBE in water supplies spurred congressional interest in authorizing Trust
Fund appropriations to address MTBE leaks and enforce the leak prevention program.
Title XV, Subtitle B, of the Energy Policy Act of 2005 (P.L. 109-58, H.R. 6) adds
new leak prevention and enforcement provisions to the UST program and authorizes
EPA and states to use the Trust Fund to clean up MTBE leaks and to implement and
enforce new requirements. However, the act’s LUST motor fuels tax provisions prohibit
the use of LUST funds for new purposes, thus complicating states’ resource problems.
This report reviews the LUST program and new tank provisions. It will be updated.
Background
In the 1980s, EPA determined that many of the roughly 2.2 million underground
storage tanks (USTs) 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 50% of the U.S. population relies on ground water for their drinking
Congressional Research Service ˜ The Library of Congress

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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. The 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. EPA and the states primarily use the
annual LUST Trust Fund appropriation to oversee and enforce corrective actions
performed by responsible parties. They also use the funds to conduct corrective actions
where no responsible party has been identified, where a responsible party fails to comply
with a cleanup order, in the event of an emergency, and to take cost recovery actions
against parties. EPA and 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.
State Funds. The 1986 law also 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 a 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.
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. A June 2005
survey of states showed that, cumulatively, states had collected and spent roughly $13.14
billion through their funds. In 2005, state funds collected $1.53 billion in annual revenues
and spent a total of $1.06 billion, while outstanding claims against state funds reached
$1.80 billion. 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. (See
2005 State Financial Assurance Funds Survey at [http://www.astswmo.org].)

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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 1987.1 The Energy Policy Act of 2005 (P.L. 109-58, H.R. 6) extends the
tax through March 31, 2011. During FY2005, the tax generated more than $190 million
in revenues, and the fund earned roughly $77 million in interest on the balance in the
fund. As of September 30, 2005, the fund’s net assets were $2.44 billion.
For FY2005, the President requested $72.5 million, and Congress appropriated
$69.4 million from the trust fund to support the LUST program. For FY2006, Congress
provided the requested $73 million in P.L. 109-54.2 For FY2007, the President has
requested $72.8 million. In recent years, EPA has allocated approximately 81% (roughly
$57 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. The Energy Policy Act of 2005 (P.L. 109-
58, H.R. 6, §1522) requires EPA to allot least 80% of the appropriation to the states.
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, more
than 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 FY2005, 653,621 tanks remained in service and subject to UST
regulations, 452,041 releases had been confirmed, 421,924 cleanups had been initiated,
and 332,799 cleanups had been completed. The backlog of sites requiring remedial action
dropped to 119,242 sites. During FY2005, 7,421 releases were newly confirmed,
compared with 7,850 in FY2004 and 12,000 in FY2003.3 More than 14,600 corrective
actions were completed in FY2005.
1 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.
2 P.L. 109-148 provided another $8 million for addressing USTs damaged by hurricanes in the
Gulf-Coast area. H.R. 4939 includes, as requested, $7 million more for this purpose for FY2006.
3 For state-by-state information, see [http://www.epa.gov/oust/cat/camarchv.htm].

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Implementation and Compliance Issues. EPA estimated that by FY2001, 89%
of USTs had upgraded tank equipment to meet federal requirements. However, the
Government Accountability Office (GAO) reported that because of poor 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.4
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 FY2005, 78% of UST facilities were in compliance with the
1998 release prevention requirements, 73% were in compliance with the leak detection
requirements, and 66% of facilities had complied with the combined requirements.
EPA also has been evaluating the performance of tank regulations to determine
where improvements may be needed. A concern is that although new and upgraded tanks
are much more protective than earlier tanks, some leaks have been 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.5
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 25 states have enacted limits or phase-outs of the additive.
4 U.S. GAO, Environmental Protection: Improved Inspections and Enforcement Would Better
Ensure the Safety of Underground Storage Tanks, GAO-01-464, May 2001, pp. 2-6. Also see
Environmental Protection: More Complete Data and Continued Emphasis on Leak Prevention
Could Improve EPA’s Underground Storage Tank Program, GAO-06-45, Nov. 2005.
5 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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At least 42 states now require testing for MTBE in ground water at LUST sites. In
a 2000 survey, 31states 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 that most
states did not plan to reopen previously closed LUST sites to look for MTBE.6 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 it is expected to be
in the billions. Two studies by water utilities place their best estimates of the costs, given
the limited data, at $25 billion7 and $33.2 billion.8 Regulators expect that as tank owners
and operators comply more fully with UST requirements, the number of leaks from tanks
should decline significantly.
Legislation
The 109th Congress has passed legislation related to LUST and MTBE. P.L. 109-6
(H.R. 1270) enacted in March 2005, extended the 0.1 cent-per-gallon motor fuels tax that
finances the LUST Trust Fund through September 2005. The Energy Policy Act of 2005
(P.L. 109-58, §1362) extends the tax through March 31, 2011.
The Underground Storage Tank Compliance Act. Title XV, Subtitle B, of
the Energy Policy Act of 2005 comprises “The Underground Storage Tank Compliance
Act” (USTCA). This act amends SWDA Subtitle I to add new leak prevention and
enforcement provisions to the UST regulatory program and impose new requirements on
states, EPA, and tank owners. The USTCA requires EPA and states that receive funding
under Subtitle I to conduct UST compliance inspections every three years. It also requires
states to comply with EPA guidance prohibiting fuel delivery to ineligible tanks, develop
training requirements for UST operators and individuals responsible for tank maintenance
and spill response, prepare compliance reports on government-owned tanks in the state,
and implement groundwater protection measures for UST manufacturers and installers.
The act also requires EPA to implement a strategy to address UST releases on tribal lands.
The USTCA, as amended, authorizes the appropriation of $155 million annually for
FY2006 through FY2011 from the LUST Trust Fund for states to use to implement the
new UST leak prevention requirements and to administer state programs.9 However, the
energy act’s tax extension language (§1362) prohibits the use of trust fund appropriations
for any new purposes. Thus, while the Energy Policy Act significantly expands states’
leak prevention responsibilities, it prohibits the use of the trust fund money to support
6 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].
7 American Water Works Association, A Review of Cost Estimates of MTBE Contamination of
Public Wells, June 21, 2005.
8 Association of Metropolitan Water Agencies, Cost Estimate to Remove MTBE Contamination
from Public Drinking Water Systems in the United States, June 20, 2005.
9 Technical corrections to the Energy Policy Act were enacted in P.L. 109-168 on January 10,
2006. The only substantial correction to the USTCA was the revision of the dates authorizing
appropriations for Subtitle I from FY2005-FY2009 to FY2006-FY2011.

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state implementation of the new requirements, some of which have tight deadlines. States
that receive funds under Subtitle I are required to implement these provisions. At issue
is whether states that lack sufficient resources to meet the USTCA requirements will turn
responsibility for implementation of their UST and LUST programs back to EPA.

The USTCA also includes new authorizations of appropriations to hasten the cleanup
of leaking tanks and related MTBE contamination. It authorizes trust fund appropriations
of $200 million annually for FY20065 through FY2011 for EPA and states to administer
the LUST corrective action program, and another $200 million annually for FY2006
through FY2011, specifically for addressing MTBE and other oxygenated fuels leaks
(e.g., other ethers and ethanol). For FY2007, the President has requested $72.8 million
from the trust fund for the LUST program, similar to recent years’ funding levels.
MTBE. The House version of H.R. 6 had included a retroactive safe harbor
provision to protect manufacturers and distributors of fuels containing MTBE and
renewable fuels (e.g., biodiesel and ethanol fuels) from products liability claims. The
provision stated that it would not affect other liability (such as liability for cleanup costs
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.10 The safe harbor provision was
opposed by public water suppliers, county and city government associations, and many
states. Opponents argued that providing a products liability shield would effectively leave
gas station owners liable for cleanup, and as these businesses often have few resources,
the effect of the provision would have been that the burden for cleanup would fall to local
communities, water utilities, and the states. Proponents argued that a safe harbor
provision was merited because 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 on this Congress.
(The Senate’s safe harbor provision had applied to renewable fuels only.) Conferees
dropped the safe harbor provision and added a provision allowing new MTBE claims and
legal actions to be removed to federal courts (§1503). Furthermore, the conferees dropped
the MTBE ban but retained the provision to eliminate the Clean Air Act oxygenate
requirement, which had prompted the increased use of MTBE.11
Related bills introduced in the 109th Congress include H.R. 879 and S. 439, which
would 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. Section 1530 of the USTCA
directs states to require that new tanks located near community water systems or wells be
equipped with secondary containment, or that UST manufacturers and installers maintain
evidence of financial responsibility.
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10 For a discussion of legal issues, see CRS Report RS21676, The Safe Harbor Provision for
Methyl Tertiary Butyl Ether (MTBE), by Aaron Flynn.
11 For more information on LUST and MTBE provisions in P.L. 109-58, see CRS Report
RL32865, Renewable Fuels and MTBE: A Comparison of Selected Provisions in the Energy
Policy Act of 2005 (H.R. 6). For more information on MTBE, see CRS Report RL32787, MTBE
in Gasoline: Clean Air and Drinking Water Issues.

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