SourceLine News & Insights

If we had one piece of advice for owners and operators of aging underground storage tanks (USTs) it would be this: plan ahead.

Why? At a time when more than 150,000 will reach the end of their 30-year warranties in the next 10 years, several factors are coming together to complicate decision-making regarding UST replacements. Here’s a brief overview of the situation.

1. The 15- to 20-year outlook for motor fuels is unclear.

UST operators may be hesitant to purchase tanks that require a 15- to 20-year return on investment amid an uncertain future for conventional motor fuels.

2. Meeting financial responsibility requirements for tanks that are approaching – or have surpassed – their warrantied service life is becoming more challenging.

Although some insurance providers will decline coverage for out-of-warranty tanks, the EPA has identified carriers that may consider coverage. According to the Petroleum Equipment Institute TulsaLetter, UST insurance premiums are influenced by site-specific characteristics and risks. Owners of aging tanks can improve their chances for coverage by:

  • Demonstrating tank integrity with thorough records for inspection, release detection and testing release
  • Installing new piping, sumps and spill buckets
  • Retrofitting tanks with a double-walled interior

That notwithstanding, even owners who can document years of compliance, inspections and testing should expect higher premiums on tanks with expired warranties.

3. Supplies of new USTs are constrained.

There is a nationwide shortage of key materials used to produce UST parts. The timeline for a replacement tank has increased from about 30 days to 6 to 9 months.

4. A market for used tanks may be emerging, and UST operators should expect different compliance requirements for refurbished tanks.

Some operators are installing used tanks as an alternative to new tanks. Regulatory requirements for the installation and utilization of a refurbished underground storage tank usually dictate that the used tanks be certified by an independent testing organization before they are installed.

5. There is a limited pool of licensed professionals to meet the increased demand for UST installations.

Planning for extended lead times for tanks and installation will be critical for business continuity.