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Underground Allies

A critical federal report and controversial gasoline additive have catapulted a Vermont legislator into the limelight in downstream circles, drawing applause from petroleum and convenience store types.

The outlook of these groups typically aligns along conservative, pro-business fronts, with tempered sensitivity toward environmental issues. It is this profile that makes the recent alliance between these groups and Sen. Lincoln Chafee of Rhode Island, a member of the GOP's scant liberal wing, all the more striking.

The issue is underground storage tanks. The problem is they're leaking, despite aggressive environmental legislation that mandated costly equipment upgrades and encouraged automated oversight systems.

Last May, the nonpartisan General Accounting Office (GAO) reported that 30 percent of the nation's underground tank owners were not maintaining their facilities properly. The GAO, the research arm of Congress, blamed both equipment and operators, citing widespread problems with devices designed to prevent spills and overfilling; and operators for turning off tank gauges aimed at spotting leaks.

The agency's findings summarized that 89 percent of regulated tanks underwent federally required equipment upgrades over a 10-year period ending in 1998. Chafee's bill, the Underground Storage Tank Compliance Act of 2001, seeks to bring the rest into compliance.

"Eighty-nine percent is pretty high. We just have to get the last 11 yards," Chafee said, employing a football analogy. "We've got to run this up the gut and get into the end zone."

Chafee's bill is scoring support not only from the c-store and petroleum marketing groups but from key members of the Senate Environment and Public Works Committee. The bill tackles deficiencies in the federal statute that required the petroleum industry to sink more than $2 billion into new equipment during the compliance period.

Among the initiatives, Chafee looks to increase funding to states for cleanup of contaminated sites, requires governments on all levels to develop cleanup strategies of publicly owned or run tanks, and floats a one-time $200-million parachute to attack MTBE contamination.

"It goes to our core objective that instead of adding new regulations, let's enforce what's on the books. That's what the Chafee bill tries to do," said John Eichberger, motor fuels director for the National Association of Convenience Stores (NACS).

"What we really like is that the bill requires local, state and federal government to develop a strategy to clean up government sites," he said. "In the past government has gone after businesses while not keeping its own house in order."

Sarah Dodge, director of legislative affairs for the Petroleum Marketers Association of America (PMAA), has worked with Chafee's legislative aides and said the bill's merits far outweigh its flaws. "It's a big improvement over the last bill and it addresses government compliance, which is important to us."

What would please Dodge even more is to impose penalties on non-complying governmental agencies. "It requires them to draft a strategy, but what comes after that?"

PMAA, breaking ranks from its downstream colleagues, also opposes the provision mandating inspection of USTs at least every two years, contending that discretion should be left in state hands. Many states already have inspection requirements under current law and most insurers require such inspections. However, state tank program administrators argued for this provision, saying that they would receive more federal funding if inspections were required under federal law. The bill also provides the newly authorized funds for states to carry out this responsibility.

Political Concerns

Upon further review, it comes as little surprise that NACS, PMAA and the Society of Independent Gasoline Marketers of America (SIGMA) are weighing in on the bill's behalf. Not only have they played an instrumental role in the measure's drafting, they were the stalwarts behind a similar bill introduced three years ago by Oklahoma Republican James Inhofe.

While that bill stalled in the Senate after a comparable measure whizzed through the House, political observers expect the reverse this time, fearing that the House may stifle legislation. "You're going to see the Chafee bill sail through the Senate, but it's going to be slow moving in the House," said Dodge. "Three years ago, the bill was defeated because of the substance. This time it's going to be because of the politics."

A Congressional GOP source familiar with the bill noted, "The Democrats don't want to hand the Republicans an environmental victory in an election year. You would think they would support this bill, but we expect the House Democrats to put up a wall."

Perhaps playing the role of upbeat diplomat, Chafee said he foresees little problem in either house and predicts the measure to become law this year. "I expect it will sail through, but you never know what will come out," he said. "I do [nonetheless] expect smooth waters. I wouldn't expect problems in the House."

Un-LUSTful Behavior

There are few items that rile petroleum marketers more than LUST. The acronym's sensationalism contrasts with its staid moniker — Leaking Underground Storage Tank trust.

Founded more than 15 years ago, the federal trust fund, financed via a per-gallon gasoline tax of one-tenth of one cent, has ballooned to more than $1.5 billion. The piggy bank was created to help the Environmental Protection Agency (EPA) and states cover cleanup costs when tank owners and operators could not afford or refused to pay.

Yet LUST has served more as a bit player in balancing the federal budget than as an environmental cleaning agent. In recent years, the federal government has slotted between $70 million and $80 million, about 5 percent of the total trust, to finance activities. And the puny figure has typically paid for administrative costs, not environmental remediation.

"If it were a private business doing this, they would be subject to fraud laws," Tom Osborne, SIGMA's communications director, said of Congress squirreling most of the funds to balance the budget.

"It's the same story as with other trust funds — to make the budget look good," Roy Littlefield, executive vice president of the Service Station Dealers of America, said in an earlier interview.

Chafee does take aim at LUST, both in distribution and flexibility. On top of limited funding, states until now have been handcuffed as to how they could spend the money.

His measure would boost annual allocations to $100 million a year through 2007. It further empowers states to tap LUST to enforce compliance of tank leak detection. "As we looked back at the prior legislation," Chafee said, "we wanted to get the money out there for states to fix the problems." While he acknowledged that additional funding may be needed to remedy contaminated sites, he pointed to political realities: "We just have to do things incrementally to get passage."

That's fine with c-store and petroleum lobbyists, who, as in most legislative matters, hope to gain more than they lose in the typical back-and-forth nature of lawmaking. "Generally," said Jason Lynn, senior director of legislative affairs at the National Association of Truck Stop Operators, "we're very focused on moving some type of tank leak legislation. We view this as a positive step.

"We're hopeful that at the end of the process a good, solid tank bill will pass that can make as many parties as possible happy," he said, preparing for Senate committee hearings on the bill set for February (after CSNews went to press).

Indeed, the Chafee bill has accomplished something that some politicos thought was unfathomable just a year or two ago — it has united downstream petroleum activists and the MTBE advocacy group Oxygenated Fuels Association. "It used to be that they [OFA] would blame the petroleum operators and we would blame them," said PMAA's Dodge. "Because the Chafee bill increases funding to address the MTBE problem, you have both sides working together."

Reflecting on the bill in its entirety, SIGMA's Osborne said the measure is deserving of widespread support and neatly reconciles the matter of having an industry, whose reputation is anti-regulation, endorsing a federal bill for increased governance.

"If there is going to be government involvement, people in business and industry want to make sure it's enforced fairly," he said. "This legislation is aimed not at putting additional requirements on the petroleum and convenience store industry, but in ensuring fair enforcement for everyone. That's something we can support."
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