By Keith Reid
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Changes from the 1980s can still be felt today. The digital age moved beyond the hobbyist era into general business operations and personal computing. The handheld “brick” form factor did not last long, but the cellphone is here to stay. Fortunately, most of the fashion trends—legwarmers, shoulder pads, acid-washed jeans and parachute pants—have not stayed with us (though they were an improvement over some of the horrors of the 1970s).
In addition, petroleum retailing and marketing continued to move from the service bay to the convenience store format in the 1980s. Card readers, both in stores and at the dispenser, were making the manual imprinter a thing of the past. And on the environmental front, a sweeping set of new underground storage tank (UST) regulations launched in 1988. The goal was to address leaking USTs through a combination of replacements, updates and mandated monitoring requirements with a 10-year window to get on board. That resulted in a massive replacement of old underground storage tanks throughout the industry.
Which brings us to today. The typical warranty on an underground storage tank was for 30 years. The math is not hard to calculate, so today, a great many tanks are approaching or surpassing their warranty periods. So, what does that mean for tank operators?
Unfortunately, there is no “one size fits all” answer. Some 36 states offer a state environmental remediation program to address releases. The state programs tend to take a broader approach, but some focus on tank age. And with the current economic circumstances (building on budgets that were strained before COVID hit), there is no guarantee that state programs will continue as they have in the past.
The remaining 14 states require a similar level of financial support for releases, typically through private insurance. Private insurers commonly (though not exclusively) have a focus on the tank warranty period with their policies.
Scope of the Problem
Just how many tanks are we talking about? That is a critical question, and also one that has no solid answer.
In late 2015, the Association of State and Territorial Solid Waste Management Officials (ASTSWMO) released the report “Analysis of UST System Infrastructure in Select States,” which provided at least a thumbnail picture of the UST population and some of the attitudes among insurers and regulators regarding tank type and age. The report involved—to varying degrees—27 states and a range of interested parties.
The report found 59% of the tanks averaged more than 20 years in age. A total of 39% of the tanks were between 20 and 29 years old. Obviously, five years have passed, and those numbers have certainly increased (offset to some extent by tank replacements and decommissioning).
Eight of the states were able to provide more detailed information on tank materials and construction. There was a relatively even split between fiberglass and steel, along with a surprising number of fiberglass single-walled tanks (25.4%). The presence of various biofuels was covered but not down to specific concentrations such as E10 (10% ethanol) versus E85 (85% ethanol).
While something is better than nothing, many sources in the ASTSWMO report, (and everyone interviewed for this article), noted that there is a crucial lack of granular data on the source of tank releases.
Bob Renkes, executive director of the Fiberglass Tanks & Pipe Institute, outlined the scope of the problem. “How many out-of-warranty tanks remain? How many have encountered problems? When do they encounter the problems? Does that change by single wall, double wall and manufacturer? Is there a difference between steel and fiberglass? What is the correlation between the tank’s age and its useful life? We just don’t know.” he said.
At what point should tank age become an issue? Most failures are identified within days to a few years after tank goes in the ground and are typically elated to a specific manufacturing errors or improper installation.
“There’s no change in the properties of steel, like strength. It doesn’t crack—the welds don’t change,” said Wayne Geyer, executive vice president at the Steel Tank Institute (STI/SPFA). “We’ve seen tanks that are 45 years old that you can still see the stencil on the steel from the mill. And you can see tanks coming out of the ground with our decals on the outside of the tank that looked like they were new. People were pulling tanks left and right in the nineties that were in really good shape on the outside.”
On the plus side, USEPA is apparently finalizing an aggressive survey and database of the existing tank population. Hopefully, this will begin to add some clarity.
The 30-year Warranty
There is a suggestion that the common 30-year tank warranty was created as a marketing proposition during the heyday of tank replacements. There does not appear to be any specific rationale for choosing 30 years over, say, 20 or 40 years.
It is not clearly established that there is a specific age at which tank performance begins to significantly degrade. As the ASTSWMO report noted: “Anecdotal information and opinions expressed by insurance companies and other risk management experts are quite diverse as to whether the age of the tank is a significant or decisive factor in assessing the risk of leaks.”
“I’d argue that the life of the tank is probably more than 30 years,” said Colin Donovan, president of STICO Mutual Insurance Company. STICO insures steel tank manufacturers and provides the foundation for their warranties. “The 30 years, for whatever reason, was chosen and that’s stuck. There are certainly tanks that are still operable after 40 or 50 years.”
Private Insurance
Lacking a clear view of the underlying dynamics of tank failure, the insurance industry must have some metric for risk assessment. While each insurance company has its own actuarial models for insuring underground storage tanks (or more specifically the ramifications of a leak from an underground storage tank), the 30-year warranty appears to be a milestone event for many in how they structure the coverage.
“The underwriter mindset is not if but when is it going to happen,” said Marshall Yacoe, vice president, environmental services lead energy and environmental for Lockton Insurance Brokers LLC. “So, as tanks get older, underwriters began to add additional scrutiny, particularly as they pass 25 years.”
The ramifications for the retailer can be significant in terms of both premiums and deductibles.
“If you have a tank that’s 24 years old and you have a release, you might pay $10,000 before insurance kicks in,” said Yacom. “If that tank is 27 to 28 years old, that deductible can be anywhere from $50,000 to $250,000. And once it hits 35 years, those deductibles can reach $500,000 or some carriers not wanting to write it anymore. Unless you have a big portfolio to balance out the risk, it becomes very difficult to get coverage.” He did note that it would not necessarily be the only factor under consideration. An underwriter can go to bat with the carrier for a retailer with a strong record of maintenance and successful compliance.
In fact, maintenance is likely the biggest factor in the reliability and soundness of a fueling infrastructure. “Any tank that is properly maintained really has an indefinite life,” Donovan said. “I speak mostly for steel because that’s our focus. If you can keep the water out and keep the food sources [for microbial growth out] they can last indefinitely. If you don’t have proper maintenance, you are going to have corrosion from the inside. We’re starting to get the word out and think that’s one of the reasons why we’re seeing a lower failure rate in the last five to 10 years.”
Some private insurance companies focus their approach almost entirely on the operator and maintenance aspect. “We’re not a big carrier, but this is all we do,” said Brian Wiegert, vice president of underwriting for PMMIC. “We approach this through loss control and inspections. We go out and confirm the equipment, make sure it’s installed the way the manufacturer wanted it installed and operating the way the manufacturer wants it to operate. Tank age is a concern, but we don’t have an age limit or non-renew or cancel currently because of age. It doesn’t scare us because we have [our] data to analyze it.”
While the company does not have arbitrary metrics for tanks, it does make sure the operators are on the ball. “We work with regulators to try to keep people in compliance because our policy requires them to be in compliance, and without the owner operator we wouldn’t be in business,” said Wiegert. “And we will cancel people who fail to take care of their equipment or don’t respond to the things that require fixes.”
Anonymous insurers provided their perspectives (both for and against) on using tank age as a metric in the ASTSWMO report. Supporting the idea that age should not be a primary factor, one noted: “Arbitrary age limits are a bad idea. We have not seen an age [at which] tanks are likely to fail…Data indicates fiberglass tanks should last over 100 years…Steel tanks may have a similar lifespan, although anodes need to be replaced periodically…tanks [should be replaced] not because of their age, but because of the fuels to which they are exposed. If fiberglass tanks [contain] diesel there is no need to replace them. If they are going to see 15% or greater alcohol, they should be removed or replaced.”
Another anonymous insurer raised an interesting perspective on tank age beyond material performance: “We have been limiting our exposure…on older tanks for the past six or seven years…[Most of our claims] come from piping related incidents, but some…from tank failures where there is a slow leak that gets bigger over time, or a total failure…The problem with many older tanks from an underwriting perspective is that they are usually undesirable risks [in other ways]…run down, not profitable…they change hands every year or two…where we have good owners taking care of their tank systems, [we] will continue to insure.”
State Tank Programs
Most retailers likely fall under one of the state tank programs. These programs vary greatly in how they look at an aging tank population. It is strongly advised that all retailers make themselves fully aware of not just their state(s) compliance program but how it views aging underground storage tanks in general relative to financial assurance funds.
However, a few trends seem to stand out. In the states surveyed in the ASTSWMO report the majority did not have a legal requirement or statute requiring the replacement of old USTs or UST equipment. Those that did tended to focus on the replacement of single-walled systems. That appears to be the case more broadly.
Several states that have focused more on tank age have also specifically modified how they regulate UST lifespan. For example, in 2016 Connecticut increased and improved life expectancy from 30 years to 40 years. And Maine similarly offers an extension beyond the 30-year warranty requirement as long as the tank, its associated piping and other facility components pass integrity testing.
On a positive note, a number of states offer financial incentives and other supports to facilitate UST upgrades or replacements.
What to Do?
Upgrading aging storage tanks requires a significant amount of capital, that is balanced against the likelihood of significantly increased premiums and deductibles. Piping and other components can require replacement as well. And retailers will not have the ability to “roll the dice” on the chance of not having insurance versus paying out-of-pocket for a spill.
Retailers that are not part of a state program must, according to federal regulation 40 CFR Part 280, have sufficient coverage or an approved capability to cover $1 million for any potential spill. Inability to provide proof of this financial coverage will most likely see a tank red flagged and put out of operation.
For those with tanks nearing but not quite at the warranty point (if that is the crucial insurer metric), there is time to plan for a replacement strategy. For those where time is running out, the consideration comes down to making the upgrade or potentially shutting down or selling the site to another operator.
The situation generally is not as dire for those retailers who happen to be taking part in a state program and have been diligent about maintenance and compliance, at least not yet. While the state programs seem to take a more holistic approach versus a specific age deadline (with notable exceptions), it is uncertain how long that will continue as the aging tanks move further and further past the 30-year mark.
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Similarly, a significant event involving an older tank or an aggressive regulatory move by an influential state could easily change the balance. State budget problems, most certainly impacted negatively by the current COVID lockdown crisis, could very well see significant changes to their UST programs, enforcement and financial assurance funds.
In Part I of this series we reviewed the 5 scenarios that require an owner to remove/replace an Underground storage tank (UST). Now we examine the question: “When should a UST be removed or replaced?”
I’ve worked with gas stations and UST’s since 2002 and I wanted to know the answer to this question. I looked up all the resources I could find to get the answer. I’m sharing my research and conclusions with you. Tell me what I missed and what do you think?
There are articles online that discuss when USTs should be replaced. Some of these articles did not include the variables (age, volume, product stored, design, materials of construction, etc.) that influence the lifespan of a UST. These variables are what make the answer to most UST related questions begin with, “It depends”. This clarifying response might as well be the UST mantra. It’s how most of my answers to UST related questions begin.
Owner Options for replacing UST’s
There are two general approaches to equipment lifecycles. “Preemptive”, or planning ahead for an expected end of the equipment’s functional life cycle, or “Reactive”, making decisions after the equipment has failed.
I want to replace a UST before it leaks and try to avoid any potential bad publicity, NOV’s or cleanup costs. Should I be proactive and remove a UST at an arbitrarily chosen age or date or squeeze every penny out of the UST by utilizing it until it no longer functions as designed. What does the data tell me?
Brief Summary of UST’s in the US
Prior to 1988 most UST’s were unregulated, and more than 85 percent of USTs were made of unprotected steel.
In 1988 EPA set minimum standards for new USTs and required owners of existing USTs to upgrade, replace, or close them. Most of these regulations didn’t take effect until 1998.
In July 2015 EPA revised the 1988 federal underground storage tank (UST) regulations and required all new UST systems installed after April 11, 2016, to use secondarily contained USTs and piping and use continuous interstitial monitoring for release detection. All owners must prove their UST is compatible with regulated substances containing greater than 10 percent ethanol or greater than 20 percent biodiesel. Generally, double-walled USTs since 1995 are compatible with most ethanol-blended fuels and biodiesel fuels.
In September 2019 there were 546,192 active USTs at approximately 197,000 facilities.
Risk assessment tools for a UST:
The Cherokee Nation and Region 6 EPA created the Cumulative Risk for Underground Storage USTs (CRUST) Tool, now used in New Mexico as the GoNM tool. This software evaluated the risk of a release from UST systems by grading UST system equipment and analyzing ESRI GIS data sets. The equipment criteria included manufacturer, age, materials of construction, design (Double Wall vs Single Wall), the volume of USTs, number of dispensers, compliance history, and more.
Equipment over 30 years old received the highest risk grade under the age category. Yet, a site with UST’s over 30 years old may still be “Low Risk” after all the risk criteria are calculated.
Industry professionals and regulators have tried to answer “What is the lifespan of a UST?”
From the Association of State and Territorial Solid Waste Management Officials (ASTSWMO) on the aging UST universe:
In October 2015, the ASTSWMO USTs Subcommittee released a report titled, “An Analysis of UST System Infrastructure in Select States”. The conclusion was not definitive:
The average age of in-use USTs has not been calculated by most States, making it impossible to discern trends over time. While the age of a UST does not appear to be a major concern in most states, a few have implemented policy decisions to compel the removal of USTs after they reach a certain age.
Appendix D from the ASTSWMO report provides some interesting quotes. “Arbitrary age limits are a bad idea. We have not seen an age [at which] USTs are likely to fail…Data indicates fiberglass USTs should last over 100 years…Steel USTs may have a similar lifespan, although anodes need to be replaced periodically…USTs [should be replaced] not because of their age, but because of the fuels to which they are exposed. If fiberglass USTs [contain] diesel there is no need to replace them. If they are going to see 15% or greater alcohol, they should be removed or replaced…”
“Requiring replacement of USTs at the end of their warranty period is a crazy idea. Many components of UST systems have warranties of only 1 year or a few years…Owners are not required to replace those components at the end of a warranty period. Would you require cars to be replaced at the end of their warranties?”
UST Warranties:
Some State Regulators and individuals in the industry have implied, “A UST is no longer useful after its warranty has expired”. Fiberglass USTs are warrantied for 30 years and steel USTs are warrantied for 10. So steel USTs are only good for 10 years? Is an expired warranty a finite declaration that the equipment won’t function after that? Is a car that is warrantied for 150,000 miles, junk after reaching that milestone?
The Petroleum Equipment Institute on aging UST universe:
On September 19, 2018, PEI Tulsa letter, PEI suggests working together to determine the lifecycle of a UST system by compiling and aggregating data on UST systems, to evaluate the risks associated with older USTs and encourage strategies for reducing those risks. Collaboration, data input and feedback from EPA, Tribal and State regulators, ASTSWMO and NWGLDE workgroups, online UST compliance groups, Petroleum Equipment Institute members, Petroleum service technicians, Technicians in the petroleum Industry, Owners/operators of UST systems, NEIWPCC, NFPA, API, Underwriters Laboratories (UL) and all Industries associated with UST’s, might reveal the true lifecycle of a UST.
To get a realistic idea on the life cycle of a UST requires standardized data collected from all USTs and reported in a universal format. Without the data to assess the trends, very little can be reliably concluded.
How often do UST’s fail?
The Fiberglass UST & Pipe Institute on SW Fiberglass UST failures:
A 2013 report from the Fiberglass UST & Pipe Institute titled “Fiberglass Underground Storage UST Success in the USA” claims that of 19,240 SW fiberglass USTs, with an average age of 8 years, only 4 had failures and 3 of those failures were attributed to poor installation practices.
UST’s since 2016:
By federal regulations, every new UST system (Since April 11, 2016) must have secondary containment, including double walled USTs and piping. Looking 10-30 years in the future at these new UST systems, (with continuous interstitial leak detection, tested and maintained annually) is the owner going to be required to remove the UST from service because it is out of warranty? Or when some day of the year arrives?
Conclusion: When should an underground storage UST (UST) be removed or replaced?
The irony of this entire article is that most recorded releases from a UST system did not originate from the UST. So we just spent all this time examining at how long a UST will last, when a release probably will not come from the UST. ASTSWMO reports “The few published studies available on this subject all have concluded that components other than the UST itself – i.e., piping, joints, connectors, gaskets, dispensers, etc. – are the source of most leaks”.
As we noted in part I, there are 5 reasons a UST has to be removed/replaced. But, can an owner of a UST plan for when to remove or replace a UST? Until we have reliable data and apply valid scientific analysis, the only concrete answer to when a UST should be removed/replaced is the 5 reasons in part I.
That may not be a very satisfactory answer. My personal opinion for different scenarios is below.
If a UST was installed before 1988 and it is a single-walled UST, it should be replaced.
If the UST’s were installed between 1988 and April 11, 2016, the UST is double-walled with continuous interstitial monitoring, compatible with the product stored, and the equipment is being inspected and maintained annually? I wouldn’t worry about the UST until it fails a release detection test. Any other UST system, it depends. Who made it, what is it made it out of, what is the release detection method, how has the compliance history been with this site, etc..?
If the UST’s were installed after April 11, 2016, these USTs will last more than 50 years. The UST has to be compatible with the product stored, it is double-walled with continuous interstitial monitoring, and the equipment is being inspected and maintained annually, I wouldn’t worry about the UST until it fails a release detection test or a new fuel additive (Lead, MTBE, ethanol, ??) is introduced that causes the materials new USTs are created from to degrade.
Thank you for reading these. Let’s hear from you now. What other gas station issues do you want to hear about? What about the other components of the UST system? What did I miss? What does your experience say?
Join our UST Compliance group and visit my Youtube page for more on 40 CFR 280, UST compliance and gas stations. I never try to sell you anything or blast you with my services. Thank you for reading this and giving me your thoughts and suggestions.
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