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Of the several million underground storage tanks containing petroleum products nationally, tens of thousands have leaked and many more are expected to leak in the future. The Division of Environmental Response and Remediation (DERR) has investigated more than 3,800 cases of petroleum contamination from tanks in Utah.
The Underground Storage Tank Program works to assure that tanks are safely managed. Besides the dangers of fire or explosion, leaking underground storage tanks (LUSTs) can contaminate soil and groundwater. Groundwater accounts for 96% of Utah's drinking water sources. Toxic and explosive petroleum vapors can also get into utility conduits, homes, schools and workplaces. LUSTs are a serious problem that need proper attention to protect our limited natural resources. The Federal Environmental Protection Agency and the State of Utah require that owners/operators of USTs cleanup petroleum leaks and releases when they occur.
The costs of stopping, investigating and cleaning up the damage caused by a petroleum leak or release can be enormous. Several site cleanups in Utah have approached $1,000,000. Federal law requires all tank owners/operators to have the financial ability to pay for investigation, cleanup and other costs associated with damages caused by a petroleum leak or release. The amount of financial assurance varies depending upon the type of business operated, but the law applies to all owners/operators of regulated systems. In response, Utah's Legislature passed the Underground Storage Tank (UST) Act. Utah's law also created the Petroleum Storage Tank Trust Fund (PST Fund). Owners and operators do not have to use the PST Fund to demonstrate financial assurance. See the section below on alternate financial assurance mechanisms.
The PST Fund functions similarly to insurance with the owner/operator having a "deductible." The first $10,000 or $25,000 in eligible costs must be met by the owner/operator (the larger figure is for releases which occurred and were reported prior to July 1, 1994, the smaller for releases after that date). The fund will then cover eligible costs up to a set limit of either $500,000 or $1,000,000 (minus the deductible), depending upon the type of business - petroleum non-marketer or marketer.
Levels Of Coverage Required
The law requires all petroleum marketers to have financial assurance or coverage of $1 million per occurrence. Multiple occurrences or aggregate coverage is the same amount if the marketer has fewer than 100 tanks, and $2 million if more than 100 tanks. Marketers are those selling, producing or refining petroleum products.
Non-marketers with monthly petroleum usage of less than 10,000 gallons must have $500,000 coverage per occurrence. Multiple occurrences or aggregate coverage is $1 million if the non-marketer has fewer than 100 tanks, $2 million if more than 100 tanks. Non-marketers with monthly usage in excess of 10,000 gallons must have the same coverage as a marketer. Non-marketers are those who own or operate USTs, but do not sell, produce or refine petroleum products.
Alternate Financial Assurance Mechanisms
Owners/operators are not required to participate in the PST Fund. However, they must demonstrate that they meet the required financial responsibility through an alternate mechanism as specified by Federal law. The most commonly used mechanisms are private insurance and self insurance based on net worth. The existence and adequacy of one or a combination of these alternate mechanisms must be reported to the state yearly. Demonstrating Financial Responsibility (pdf format).
How The PST Fund Is Funded
The initial PST Fund tank fee charged the year the tank is installed is $50 per tank for USTs installed at new facilities. If a new UST is installed at a facility with existing USTs, the rate is the same assessed to the existing USTs for the current fiscal year, either $50 per tank if the entire facility's petroleum throughput is less than 400,000 gallons per year,or $150 per tank if the throughput exceeds that amount. If the new UST is a replacement for a previously-existing UST, the current year PST Fund fee paid for the original tank is applied to the new UST. Renewal each subsequent year is $50 or $150 based on the prior years throughput (400,000 gal.). The PST Fund receives its money from these annual assessments applied to participating USTs and an environmental assurance fee of one half cent per gallon on petroleum delivered to these tanks.
Certificate Of Compliance
A UST may not be used until it is issued a Certificate of Compliance by the Division of Environmental Response and Remediation who ensures that it meets both state and federal rules and regulations. To obtain a Certificate of Compliance, owners/operators must register their USTs and pay an annual tank fee. How to Obtain a Certificate of Compliance.
How To Join the PST Fund
Accessing the PST Fund
To access funds, the following eligibility requirements must be met:
All questions and comments may be directed to Therron Blatter at tblatter@utah.gov.
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