Assessment Of The Potential Costs, Benefits, And Other Impacts
                          Of The Final Revisions To
                 EPA's Underground Storage Tank Regulations

                                 Prepared for:

       Release Prevention Division, Office of Underground Storage Tanks
                     U.S. Environmental Protection Agency
                          1200 Pennsylvania Avenue NW
                             Washington, DC 20460

                                 Prepared by:

                      Industrial Economics, Incorporated
                           2067 Massachusetts Avenue
                              Cambridge, MA 02140
                                 617/354-0074

                                  April 2015

[THIS PAGE INTENTIONALLY LEFT BLANK.]

Acronyms And Terms
AHFDS  -  Airport hydrant fuel distribution system
ASTSWMO  -  Association of State and Territorial Solid Waste Management Officials
ATG  -  Automatic tank gauge / gauging  -  an automated process that monitors product level and provides inventory control
BLS  -  United States Bureau of Labor Statistics
BTEX  -  benzene, toluene, ethylbenzene, and xylenes
CFR  -  Code of Federal Regulations
CITLD  -  continuous in-tank leak detection
EGT  -  emergency generator tank
EPA  -  United States Environmental Protection Agency
EPAct  -  Energy Policy Act of 2005
FCT  -  field-constructed tank
Fill pipe  -  access by which a tank is filled
IRS  -  United States Internal Revenue Service
LLD  -  line leak detector / detection  -  a device that alerts the tank operator to the presence of a leak in underground piping by restricting or shutting off the flow of product through the piping, or by triggering an audible or visible alarm
LUST  -  leaking underground storage tank
MIDAS  -  modeling of infectious diseases agents study
NACS  -  National Association of Convenience Stores
NAICS  -  North American Industry Classification System
NRDA  -  natural resource damage assessment
OMB  -  United States Office of Management and Budget
OUST  -  Office of Underground Storage Tanks, United States Environmental Protection Agency
PAHs  -  polycyclic aromatic hydrocarbons
RFA  -  Regulatory Flexibility Act
SBA  -  United States Small Business Administration
SBREFA  -  Small Business Regulatory Enforcement Fairness Act of 1996
SIR  -  statistical inventory reconciliation  -  a leak detection method where inventory, delivery, and dispensing data is statistically analyzed
SISNOSE  -  significant impact on a substantial number of small entities
SPA  -  state program approval
SPCC  -  Spill Prevention, Control, and Countermeasure
Spill bucket  -  contained sump installed at the fill or vapor recovery connection points to contain drips and spills that can occur during delivery
Sump  -  subsurface area pit designed to provide access to equipment located below ground, and, when contained, to prevent liquids from releasing into the environment
SWDA  -  Solid Waste Disposal Act
TPH  -  total petroleum hydrocarbons
Turbine sump  -  sump designed to provide access to the turbine area above the tank
TVM  -  time value of money
UDC  -  under-dispenser containment  -  a device for collecting fluids spilled beneath a dispenser (pump) (e.g. dispenser pan)
UMRA  -  Unfunded Mandates Reform Act
UST  -  underground storage tank
WTP  -  willingness to pay

                                   Contents
Executive Summary	es-1
Chapter 1.	Introduction	1-1
1.1	Background	1-1
1.2	Need for Regulatory Action	1-2
1.3	Summary of the Final UST regulation	1-3
1.4	Alternative Regulatory Options	1-5
1.5	Scope of Analysis	1-8
1.6	Report Organization	1-8
Chapter 2.	Universe of UST Systems Affected by the Final UST
regulation		2-1
2.1	Types of Entities Affected by the Final UST regulation	2-1
2.2	Configuration of Average Conventional UST System	2-2
2.3	UST Universe Size and Distribution Across Sectors	2-3
2.4	Universe of Facilities and Systems Potentially Affected by Final UST regulation	2-7
2.5	Facilities and Systems Affected by Final UST regulation	2-11
Chapter 3.	Assessment of Compliance Costs	3-1
3.1	Introduction	3-1
3.2	Compliance Cost Methodology	3-1
3.2.1	Categories of Compliance Costs Analyzed	3-3
3.2.2	Estimation of System-Level Compliance Costs for UST Systems	3-6
3.3	Calculation of Incremental Compliance Costs	3-11
3.3.1. Calculation of Incremental Compliance Costs Using an Alternative Baseline	3-13
3.4	Results of Assessment of Compliance Costs	3-14
3.4.1	Assessment of Compliance Costs under the Alternative Baseline Scenario	3-20
3.5	Sensitivity Analyses	3-20
3.5.1. Compliance Costs of the Final UST regulation Using Alternative Estimates of Labor Rates, Overhead Costs, and Fringe Benefits	3-20
3.5.2	Sensitivity Analysis of Distribution of Technologies for Overfill Prevention Equipment Inspections, Spill Prevention Equipment Testing, and Containment Sump Testing	3-24
3.5.3	Summary of Sensitivity Findings	3-24
3.6	 State Government Administrative Compliance Costs	3-25
3.7	Summary  -  Total Annual Compliance Costs	3-26
Chapter 4.	Assessment of Cost Savings and Benefits	4-1
4.1	Introduction	4-1
4.2	Investigation of Empirical Methods for Measuring Cost Savings	4-1
4.2.1	Engineering Estimates and Literature	4-1
4.2.2	Statistical Analysis of State Release Data	4-3
4.3	Final Methodology for Assessment of Positive Impacts: Expert Consultation	4-6
4.3.1	Avoided Remediation Costs	4-8
4.3.2	Calculating Avoided Remediation Costs	4-8
4.4	Establishing Avoided Releases	4-11
4.4.1	Avoided Releases Using an Alternative Baseline	4-14
4.5	Benefits from Avoided Releases and Reduced Release Severity	4-16
4.5.1	Avoided Release Remediation	4-16
4.5.2	Reduction in Release Severity	4-17
4.5.3	Total Avoided Remediation Costs from Avoided Releases and Reduced
Release Severity	4-19
4.5.4	Benefits from Avoided Releases and Reduced Release Severity under the Alternative Baseline Scenario	4-20
4.5.5	Avoided Costs by Requirement	4-22
4.6	Avoided Vapor Intrusion Damages	4-25
4.7	Avoided Product Loss	4-26
4.8	Human Health Benefits	4-27
4.9	Avoided Acute Exposure Events and Large-Scale Releases	4-29
4.10	Ecological Benefits	4-30
4.11	Measuring Benefits through Housing Price Changes	4-34
4.12	Conclusion	4-35
4.12.1	Summary of Positive Impacts under the Alternative Baseline Scenario	4-36
Chapter 5.	Distributional Impacts and Considerations	5-1
5.1	Introduction	5-1
5.2	Economic Impacts	5-1
5.2.1	Distribution of UST Systems by Industry Sector	5-3
5.2.2	Market Dynamics in the Retail Motor Fuels Sector	5-3
5.2.3	Assessment of Market Exits and Employment Impacts	5-8
5.2.4	Assessment of Public Sector Cost Savings Related to Avoided Releases	5-16
5.2.5	Economic Impact Summary	5-19
5.3	Energy Impact Analysis	5-20
5.4	Regulatory Flexibility Analysis	5-21
5.4.1	Small Business Screening Analysis	5-22
5.4.2	Small Business Supplemental Analysis	5-23
5.4.3	Impacts to Small Governments	5-24
5.5	Screening Analysis to Inform Impacts on Minority and Low-Income Populations	5-26
5.5.1	Risk Assessment Population Analysis	5-27
5.5.2	Demographic Analysis	5-29
5.5.3  	Summary and Limitations of the Analysis	5-33
5.6	Children's Health Protection Analysis	5-34
Chapter 6.	Other Statutory and Executive Order Analyses	6-1
6.1	Regulatory Planning and Review	6-1
6.2	Unfunded Mandates Analysis	6-2
6.3	Federalism Analysis	6-3
6.4	Tribal Governments Analysis	6-4
6.5	Joint Impacts of Rules	6-5
Chapter 7.	Comparison of Costs, Benefits, and Other Impacts	7-1
7.1 	Cost Benefit Comparison	7-2
7.1.1	Net Costs of the Regulation: Potential Underestimates of Cost Savings and Benefits	7-4
7.1.2	Net Costs of the Regulation: Cost Savings to Public and Private Entities	7-4
7.1.3	Alternative Baseline: Potential Decreases in Future Cost Savings	7-6
7.2	Cost-Effectiveness Analysis	7-7
7.3	Costs and Beneficial Effects Under Alternative Discount Rates	7-7

Sources Cited

Appendices:

Appendix A: 	Configuration and Cost Assumptions for Airport Hydrant Fuel Distribution
                        Systems (AHFDSs) and Field-Constructed Tanks (FCTs)
Appendix B:  	Estimation of Affected UST Universe and Baseline State Regulations
Appendix C:   	Analysis of Piping Replacement Thresholds
Appendix D:	Methodology for Calculating Compliance Costs
Appendix E:	Access Model Structure and Specifications
Appendix F: 	Analysis of Statistical Relationship between State Regulatory Programs and
                        Confirmed Release Data
Appendix G: 	Expert Consultation:  Selection and Data Collection Methodology
Appendix H:	Expert Consultation:  Responses and Interpretation
Appendix I: 	Methodology for Calculating Avoided Cleanup Costs and Summary Tables
Appendix J: 	Estimation of Future UST System and Release Universes for the Alternative Baseline Scenario
Appendix K:	Methodology for Estimating Upper Bound Market Exit Scenario
Appendix L:	Screening Analysis of Impacts on Small Entities
Appendix M:	Screening Analysis of Environmental Justice Impacts
Appendix N:	Cost Savings to State Financial Assurance Funds
Appendix O:	UMRA Written Statement

                               Executive Summary
Overview
	In 1984, Congress responded to the increasing threat to groundwater from leaking underground storage tank (UST) systems by adding Subtitle I to the Solid Waste Disposal Act (SWDA). SWDA required the U.S. Environmental Protection Agency (EPA) to protect the environment and human health from UST releases by developing a comprehensive regulatory program for UST systems storing petroleum or certain hazardous substances. In 1986, Congress amended Subtitle I of SWDA and created the Leaking Underground Storage Tank Trust Fund (LUST Trust Fund) to oversee and pay for cleanups at sites where the owner or operator is unknown, unwilling to pay, or unable to pay.

	EPA promulgated the UST regulation in 1988 (40 CFR Part 280). This regulation set minimum standards for new tanks and required owners and operators of existing tanks to upgrade, replace, or close them. The 1988 regulation set deadlines for owners and operators to meet the new requirements. In 1988, EPA also promulgated a regulation for state program approval (40 CFR Part 281). EPA has not significantly changed these regulations since 1988. In 2005, the Energy Policy Act (EPAct) further amended Subtitle I of SWDA. EPAct requires states that receive federal Subtitle I money from EPA to meet certain requirements. EPA developed grant guidelines for states regarding: operator training; inspections; delivery prohibition; secondary containment; financial responsibility for manufacturers and installers; public record; and state compliance reports on government UST systems.

	After Congress passed EPAct, EPA decided to revise the 1988 UST regulation (at 40 CFR Part 280), primarily to ensure parity in Indian country. Key EPAct provisions (such as secondary containment and operator training) apply to all states receiving federal Subtitle I money, regardless of their state program approval status. However, these key provisions do not apply in Indian country (or in states and U.S. territories that do not meet EPA's operator training or secondary containment grant guidelines). In order to establish federal UST requirements similar to the UST secondary containment and operator training requirements of EPAct, EPA needed to revise the 1988 UST regulation. Without these changes, EPAct provisions will not apply in Indian country. These revisions will also fulfill the objectives of the EPA-Tribal UST Strategy (August 2006) in which both EPA and tribes recognized the importance of ensuring parity in implementing UST program requirements in states and territories, as well as in Indian country.

      EPA decided now is also an appropriate time to change the 1988 UST regulation to reflect technology improvements, address outdated requirements, and place a stronger emphasis on operations and maintenance. While EPA has issued many guidance documents and used various implementation approaches and techniques over the last 25 years, we have not made significant changes to the original 1988 UST regulation. Indeed, most states have passed requirements that go far beyond the 1988 UST regulation that provide greater environmental protection. These state regulations fully implement provisions of the EPAct and improve other important areas of the 1988 UST regulation that have become outdated. Furthermore, while information on sources and causes of releases show that releases from tanks are less common than they once were, releases from piping and spills and overfills associated with deliveries have emerged as more common problems. Dispenser-related failures have also emerged as a leading source of releases. The lack of proper operation and maintenance of UST systems is a main cause of release from these areas. The final UST regulation places an emphasis on ensuring that equipment is properly maintained and working. It highlights the importance of operating and maintaining UST equipment so releases are prevented and detected early in order to avoid or minimize potential soil and groundwater contamination.

      EPA worked diligently to ensure our regulatory development process was open and transparent. Over a two year period, we provided all stakeholders  -  state and tribal regulators; federal facilities; petroleum industry members, including representatives of owners and operators; equipment manufacturers; small businesses; local governments; and environmental and community groups  -  an opportunity to share their ideas and concerns through a variety of meetings, conference calls, and email exchanges. EPA thoroughly considered all input we received.

      From this extensive stakeholder outreach, EPA compiled potential proposed changes to the UST regulation. EPA shared all ideas with stakeholders and gave them an opportunity to comment on each idea submitted. We then revised the list of potential changes and added items based on data, analysis, and consideration of costs and benefits. Ultimately, EPA identified the items in the proposed UST regulation as those which needed regulatory changes at the time; the proposed UST regulation was issued in November 2011 for a 90-day public comment period. EPA then extended this public comment period for an additional 60 days. EPA received submissions from over 190 commenters. Based on these comments, EPA has revised the 2011 proposed UST regulation and is now finalizing the UST regulation, as described below.

Regulatory Changes

EPA is revising the 1988 UST regulation to: establish federal requirements similar to certain key provisions of the EPAct; ensure owners and operators perform proper operation and maintenance; address UST systems deferred in the 1988 UST regulation; update the regulation to encompass current technology and practices; and make technical and editorial corrections. Specifically, EPA is requiring the following set of revisions (hereafter referred to as the Selected Option):

   *       Establish federal requirements for secondary containment and operator training similar to those established by EPAct for states that receive federal Subtitle I money

   *       Add operation and maintenance requirements
         o             Walkthrough inspections
         o             Overfill prevention equipment inspections
         o             Spill prevention equipment tests
         o             Containment sump tests
         o             Operability tests for release detection equipment

   *       Address UST systems deferred in the 1988 UST regulation
         o             Remove release detection deferral for emergency generator tanks (EGTs)
         o             Remove deferrals for airport hydrant fuel distribution systems (AHFDSs) and UST systems with field-constructed tanks (FCTs)

   *       Provide for other changes to improve release prevention and detection and program implementation
         o             Require testing after repairs to spill and overfill prevention equipment and secondary containment
         o             Eliminate flow restrictors in vent lines as an overfill prevention option for all new tanks and when overfill prevention equipment is replaced
         o             Require closure of lined tanks that cannot be repaired according to a code of practice
         o             Address responses to interstitial monitoring alarms
         o             Retain vapor monitoring and groundwater monitoring as methods of release detection for tanks and piping (for those installed before the effective date of today's final UST regulation) only if owners and operators demonstrate proper installation and performance through a site assessment
         o             Require notification of ownership change
         o             Establish requirements for demonstrating compatibility with fuels containing greater than E10 and greater than B20

   *       Make general updates to the UST regulation
         o             Reference newer technologies, including explicitly adding statistical inventory reconciliation (SIR) and continuous in-tank leak detection (CITLD) as release detection methods
         o             Update codes of practice listed in the UST regulation
         o             Remove old upgrade and implementation deadlines
         o             Make editorial and technical corrections

   *       Revise the state program approval regulation (40 CFR Part 281) to be consistent with the above revisions

      In addition to the Selected Option, EPA considered two other regulatory alternatives, described as Alternative 1 and Alternative 2. Alternative 1 is overall more stringent than the Selected Option. Alternative 2 is overall less stringent than the Selected Option. Exhibit ES-1 summarizes the requirements under each alternative.

Exhibit ES-1
                Options Considered For The Final UST regulation
                            Requirement Description
                                    Options

                                   Selected
                                 Alternative 1
                                 Alternative 2
                              Release Prevention

Walkthrough inspections
30-day
30-day
(as proposed in Nov 2011)[*]
Quarterly
Overfill prevention equipment inspections
3 year
Annual
Not required
Spill prevention equipment tests
3 year
Annual
3 year
Containment sump testing
3 year
Annual
Not required
Testing after repairs to spill and overfill prevention equipment, and secondary containment
Required
Required
Required
Eliminate flow restrictors in vent lines for all new tanks and when overfill prevention equipment is replaced
Required
Required
No change from existing regulation
                               Release Detection

Operability tests for release detection equipment
Annual (plus annual check of sumps)
Annual
(as proposed in Nov 2011) *
Annual (plus annual check of sumps)
Add SIR/CITLD to regulation with performance criteria
Required
Required
Required
Response to interstitial monitoring alarms
Required
Required
Required
Groundwater and vapor monitoring for release detection
Continue to allow with site assessment
5-year phase out
(as proposed in Nov 2011)[*]
No change from existing regulation
Remove release detection deferral for emergency generator tanks
Required
Required
(as proposed in Nov 2011)[*]
Required
                                     Other

Require notification of ownership change
Required
Required
Required
Closure of lined tanks that cannot be repaired according to a code of practice
Required
Required
Required
Requirements for demonstrating compatibility with fuels >E10 and >B20
Required
Required
(as proposed in Nov 2011)[*]
No change from existing regulation
Remove deferrals for airport hydrant fuel distribution systems and UST systems with field-constructed tanks
Regulate under alternative release detection requirements
Require AHS/FCT notify implementing agency and report releases (with no other requirements)
Maintain deferral
                           EPAct-related Provisions

Operator training
Required
Required
Required
Secondary containment
Required
Required
Required
[*] In the 2011 proposed UST regulation, these changes generally consisted of more or stricter requirements than what is in the final UST regulation. For example, the 30-day walkthrough inspections in the 2011 proposed UST regulation included monthly check of sumps. Please see the 2011 proposed UST regulation for details.

      EPA designed this assessment in accordance with the Office of Management and Budget's (OMB) requirements for regulatory review under Executive Order 12866 (as amended by Executive Order 13258), which applies to any significant regulatory action. This document also fulfills these requirements:

   *       Regulatory Flexibility Act, as amended by Small Business Regulatory Enforcement Fairness Act of 1996
   *       Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations
   *       Executive Order 13045, Protection of Children From Environmental Health Risks and Safety Risks
   *       Unfunded Mandates Reform Act of 1995
   *       Executive Order 13175, Consultation and Coordination With Indian Tribal Governments
   *       Executive Order 13132, Federalism
   *       Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use

Summary Of Findings

      Within the constraints of data availability, EPA in this analysis identified all quantifiable and qualitative impacts for the UST regulation. EPA obtained sufficient data to identify, by state, the number of units likely to be affected by each change in the final UST regulation. In our analysis, we use these data to assess the compliance costs imposed upon units and relevant state governments. In conducting these analyses, EPA also assessed the sensitivity of outcomes to key assumptions. Separately, the analysis monetizes a number of impacts of the final UST regulation including:  avoided costs generated by avoided releases and reduction in severity of releases; avoided product loss; and avoided vapor intrusion damages. This analysis quantifies, but does not value, groundwater impacts. Finally, due to data and resource limitations, EPA was unable to quantify or value in this analysis human health benefits or ecological impacts, but addresses these qualitatively.

	In addition to identifying costs and positive impacts, EPA in this analysis also examined the economic and distributional impacts of the final UST regulation. The economic impact analysis includes the final UST regulation's effect on facility closures, employment, and energy output and cost. In the analysis of the final UST regulation's distributional impacts, we examined small business impacts, effects on minority and low-income populations, impacts on children's health, and potential impacts on state financial assurance funds. Finally, EPA's analysis considered the final UST regulation's impacts related to certain executive orders and statutes, including the Unfunded Mandates Reform Act, tribal governments, and federalism.

      The main conclusions of this analysis are:

   *       Compliance costs  -  EPA estimates $160 million in annual compliance costs for the final UST regulation, including costs of $130 million for conventional UST systems and EGTs; $10 million for AHFDSs; $11 million for FCTs; $5.5 million for owners and operators to read the final UST regulation; and less than $1.0 million in state government administrative costs. Compliance costs range from approximately $70 million under Alternative 2 to $290 million under Alternative 1.
   *       State and local government costs  -  Annual state and local government costs, including compliance costs to UST systems owned or operated by state and local governments, state program approval costs, state costs for processing ownership changes, and one-time notification costs for previously deferred systems, are approximately $6.8 million. These costs range from approximately $3.6 million under Alternative 2 to $14 million under Alternative 1.
   *       Avoided costs  -  Avoided remediation costs associated with conventional UST systems form the majority of positive impacts from the final UST regulation. EPA estimates that the final UST regulation will avoid total costs of $310 million per year (range: $120 million per year to $530 million per year) under the Selected Option. This includes: $300 million (range: $110 million to $510 million) in avoided remediation costs from avoided releases and avoided groundwater contamination incidents; $4.5 million (range: $1.7 million to $7.9 million) in avoided vapor intrusion remediation costs; and $3.1 million (range: $860,000 to $6.5 million) in avoided product loss. Total avoided costs are $450 million (range: $210 million to $670 million) under Alternative 1 and $230 million (range: $45 million to $420 million) under Alternative 2.
   *       Benefits  -  Due to data and resource constraints, EPA was unable to quantify or monetize many of the final UST regulation's benefits, including human health and ecological benefits. EPA estimates that the final UST regulation could potentially protect 50 billion to 240 billion gallons of groundwater each year. Categories of nonmonetizable or nonquantifiable benefits that are qualitatively discussed in this analysis include:  avoidance of human health risks, mitigation of acute exposure events and large-scale releases (e.g., releases from AHFDSs and FCTs), protection of ecological biota, and avoided property devaluation.
   *       Compliance costs and avoided costs under the alternative baseline  -  Under the alternative baseline scenario that assumes declines in the universes of both UST systems and releases over time, EPA estimates $160 million in annual compliance costs for the final UST regulation. Estimated costs do not change substantially under the alternative baseline scenario and range from $70 million under Alternative 2 to $290 million under Alternative 1. EPA also estimates total avoided costs of $210 million (range: $81 million to $360 million) under the Selected Option in the alternative baseline scenario. These avoided costs range from $160 million (range: $31 million to $290 million) under Alternative 2 to $310 million (range: $140 million to $460 million) under Alternative 1.
   *       Average economic impacts  -  Motor fuel retailers, which account for roughly 80 percent of UST systems, are expected to bear approximately 70 percent of the total costs under the Selected Option. To establish how the final UST regulation may impact the market, EPA examined whether the final UST regulation imposes a cost greater than the average after-tax profit margin of 1.8 percent for motor fuel retailers. Using this benchmark, we estimate approximately 19 firms may exit the market if they cannot pass costs through to customers. This number represents less than 0.1 of one percent of the total universe of 148,000 facilities. In comparison, between 2005 and 2013, the number of gas station facilities decreased by an average of 2,024 stations per year.
   *       State financial assurance funds  -  Decreases in release frequency and severity may decrease payments required of state financial assurance funds by $160 million or more per year under the Selected Option. To the extent that these funds are maintained by taxes other than those assessed on UST operators, decreases in these payments effectively represent a reallocation of costs from public entities to the private entities responsible for releases.

Assessment Of Compliance Costs

For this regulatory impact analysis, direct compliance costs and state oversight costs provide a reasonable proxy to assess the final UST regulation's social costs for the following reasons:

   *       The regulatory requirements generally focus on additional testing and inspection of existing equipment and do not reflect large-scale investments in equipment or significant changes to operations at the facility level. In addition, the facilities affected by the final UST regulation are distributed with relative geographic uniformity for consumers and producers.

   *       Given the small per-facility costs (approximately $715 per year for the average facility), closures or changes in market structure represent an unlikely response to the final UST regulation. According to the 2007 Economic Census, average revenues in the retail motor fuel sales sector were approximately $3.8 million; the corresponding cost-to-sales ratio for the average facility is less than one-tenth of one percent. Therefore, it is unlikely that significant changes to production or consumer behavior will affect social costs.

   *       The short- and long-run impacts of the final UST regulation are not likely to differ significantly. Testing and inspection requirements may offer some opportunities for owners and operators to reduce costs by learning over time, but they are not likely to reduce costs enough to facilitate large-scale equipment upgrades.

EPA's calculation of total incremental compliance costs for UST facilities reflects two key components:  identifying specific measures necessary for compliance at individual facilities and calculating costs associated with each of these measures. To estimate these costs, EPA developed a compliance cost model that identifies incremental equipment and labor requirements for an individual system. Based on the baseline equipment use profile, existing state regulations, and anticipated responses to the final UST regulation, the model then generates system-specific estimates of compliance costs. Compliance costs include labor and capital costs associated with new equipment and installation, inspection, testing, and recordkeeping. The model also includes other compliance costs, such as those associated with more frequent detection of equipment failure and repair of equipment. Some component costs are specific to individual UST system configurations  -  for example, AHFDSs or FCTs  -  while others are consistent across all system types. Exhibit ES-2 summarizes the findings of our analysis of compliance costs.

Exhibit ES-2
                      Total Annual Compliance Costs[a,b]
                                   Category
                         Selected Option
($ millions)
                          Alternative 1
($ millions)
                          Alternative 2
($ millions)
Conventional UST systems [c]
                                                                           $130
                                                                           $280
                                                                            $63
Emergency Generator Tanks (EGTs)
                                                                           $2.0
                                                                           $2.3
                                                                           $2.0
Airport Hydrant Fuels Distribution Systems (AHFDSs)
                                                                            $10
                                                                         $0.017
                                                                           $0.0
UST systems with Field-Constructed Tanks (FCTs)
                                                                            $11
                                                                         $0.066
                                                                           $0.0
Cost to Owners/Operators to Read Regulation
                                                                           $5.5
                                                                           $5.5
                                                                           $5.5
State Government Administrative Costs [d]
                                                                          $0.12
                                                                          $0.12
                                                                          $0.12
Total Annual Compliance Costs e
                                                                           $160
                                                                           $290
                                                                            $70
[a] Cost estimates were derived using a seven percent discount rate.
[b] Compliance costs include direct compliance costs and state oversight costs. For this regulatory impact analysis, direct compliance costs and state oversight costs provide a reasonable proxy to assess the final UST regulation's social costs. See Chapter 3.1 for further discussion.
[c] Conventional UST systems include all systems that are not AHFDSs, FCTs, or EGTs.
[d] The costs for UST systems directly owned or operated by local, state, and federal government entities are included in the estimates of compliance costs within the other categories (see Exhibit ES-6). Costs shown here reflect the administrative costs for state governments to read the final UST regulation, apply for state program approval, process notifications of ownership changes, and process one-time notifications of EGT, AHFDS, and FCT existence.
[e] Totals may not add up due to rounding.

Assessment Of Cost Savings And Benefits

Avoided remediation costs among conventional UST systems and EGTs provide the basis for a substantial portion of the beneficial impacts associated with the final UST regulation. Avoided remediation costs of the final UST regulation represent cost savings that accrue to owners, operators, and public entities charged with remediating releases at regulated facilities. EPA obtained remediation costs from a survey of state UST cleanup programs and estimates of the distribution of releases by UST system area from internal research. EPA identified four UST technical experts who provided professional judgment regarding the final UST regulation's effects on reduction in release frequency (number of releases per year) and release severity (as measured by groundwater incidents averted). This body of knowledge allowed EPA to estimate total avoided costs, as well as avoided costs per requirement. EPA also estimated avoided costs associated with vapor intrusion and product loss, though these avoided costs are not allocated across requirements. Finally, the analysis provides qualitative discussion of avoided acute events and exposure (including large-scale releases, such as those from AHFDSs and FCTs), avoided human health risks, ecological benefits, and avoided property devaluation. These findings are summarized in Exhibit ES-3 below.
Exhibit ES-3

                          Summary Of Positive Impacts
                                SELECTED OPTION
Type Of Impact
                                   Expert 1
                                   Expert 2
                                   Expert 3
                                   Expert 4
                                    Average
                                     Range
Monetized Avoided Costs Associated With Conventional USTs And EGTs ($ millions, present value 2012$)[a]
Releases and groundwater incidents[b]
                                                                          $330
                                                                          $110
                                                                          $260
                                                                          $510
                                                                          $300
                                                                    $110 - $510
Vapor intrusion
                                                                          $4.3
                                                                          $1.7
                                                                          $4.1
                                                                          $7.9
                                                                          $4.5
                                                                    $1.7 - $7.9
Product loss
                                                                          $2.3
                                                                         $0.86
                                                                          $2.9
                                                                          $6.5
                                                                          $3.1
                                                                   $0.86 - $6.5
Total[c]
                                                                          $330
                                                                          $120
                                                                          $270
                                                                          $530
                                                                          $310
                                                                    $120 - $530
Non-Monetized Impacts[d]
Groundwater protected
(billion gallons)
                                                                           130
                                                                            50
                                                                           120
                                                                           240
                                                                           130
                                                                      50 - 240
Acute events and large-scale releases (e.g., releases from AHFDSs and FCTs)[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
Ecological benefits[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
Human health risks[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                 ALTERNATIVE 1
Type Of Impact
                                   Expert 1
                                   Expert 2
                                   Expert 3
                                   Expert 4
                                    Average
                                     Range
Monetized Avoided Costs Associated With Conventional USTs And EGTs ($ millions, present value 2012$)[a]
Releases and groundwater incidents[b]
                                                                          $490
                                                                          $200
                                                                          $410
                                                                          $650
                                                                          $440
                                                                    $200 - $650
Vapor intrusion - low assumptions
                                                                          $5.9
                                                                          $2.5
                                                                          $5.9
                                                                          $9.1
                                                                          $5.9
                                                                    $2.5 - $9.1
Product loss
                                                                          $2.6
                                                                         $0.78
                                                                          $4.1
                                                                          $7.6
                                                                          $3.8
                                                                   $0.78 - $7.6
Total[c]
                                                                          $500
                                                                          $210
                                                                          $420
                                                                          $670
                                                                          $450
                                                                    $210 - $670
Non-Monetized Impacts[d]
Groundwater protected
(billion gallons)
                                                                           180
                                                                            74
                                                                           180
                                                                           270
                                                                           170
                                                                      74 - 270
Acute events and large-scale releases (e.g., releases from AHFDSs and FCTs)[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
Ecological benefits[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
Human health risks[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                 ALTERNATIVE 2
Type Of Impact
                                   Expert 1
                                   Expert 2
                                   Expert 3
                                   Expert 4
                                    Average
                                     Range
Monetized Avoided Costs Associated With Conventional USTs And EGTs ($ millions, present value 2012$)[a]
Releases and groundwater incidents[b]
                                                                          $210
                                                                           $44
                                                                          $220
                                                                          $410
                                                                          $220
                                                                     $44 - $410
Vapor intrusion - low assumptions
                                                                          $2.6
                                                                         $0.56
                                                                          $3.2
                                                                          $6.0
                                                                          $3.1
                                                                   $0.56 - $6.0
Product loss
                                                                          $1.5
                                                                         $0.36
                                                                          $2.5
                                                                          $5.2
                                                                          $2.4
                                                                   $0.36 - $5.2
Total[c]
                                                                          $220
                                                                           $45
                                                                          $220
                                                                          $420
                                                                          $230
                                                                     $45 - $420
Non-Monetized Impacts[d]
Groundwater protected
(billion gallons)
                                                                            78
                                                                            17
                                                                            96
                                                                           180
                                                                            92
                                                                      17 - 180
Acute events and large-scale releases (e.g., releases from AHFDSs and FCTs)[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
Ecological benefits[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
Human health risks[e]
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
                                                                            n/e
[a] Avoided remediation costs from releases and groundwater incidents are the costs related to site remediation. Avoided vapor intrusion costs include additional avoided costs associated with the remediation of vapor intrusion cases; the RIA does not address human health risk associated with vapor intrusion. Avoided product loss costs are also separate and additive.
b Expert 2 provided responses that generate benefits that are relatively low compared to estimated costs, unlike the other three experts. Conversations with this expert indicated that this discrepancy may be due to his assumptions about partial noncompliance. See Section 4.5.3 and Appendix H for additional discussion.
[c] Totals may not add up due to rounding. Cost estimates were derived using a seven percent discount rate.
[d] Due to data and resource constraints, EPA was unable to monetize some of the positive impacts of the final UST regulation. Chapter 4 provides a qualitative discussion of these benefits.
[e] Benefits not estimated are denoted by n/e.

Comparison Of Compliance Costs And Positive Impacts

Exhibit ES-4 summarizes the compliance costs and positive impacts of the final UST regulation. The majority of measurable positive effects occur as avoided remediation costs. As discussed in Chapter 4, avoided costs provide a reasonable measure of the positive effects of the final UST regulation.

Exhibit ES-4
          Comparison Of Annual Compliance Costs And Cost Savings[f,d]

                       Selected Option
(2012$ millions)
                        Alternative 1
(2012$ millions)
                        Alternative 2
(2012$ millions)
Annual Avoided Costs[a]

Releases and groundwater incidents: average value (range of all values in italics)
                                                                          $300
                                                                    ($110-$510)
                                                                          $440
                                                                    ($200-$650)
                                                                          $220
                                                                     ($44-$410)
Vapor intrusion: average value
(range of all values in italics)
                                                                          $4.5
                                                                    ($1.7-$7.9)
                                                                          $5.9
                                                                    ($2.5-$9.1)
                                                                          $3.1
                                                                   ($0.56-$6.0)
Product loss
(range of all values in italics)
                                                                          $3.1
                                                                   ($0.86-$6.5)
                                                                          $3.8
                                                                   ($0.78-$7.6)
                                                                          $2.4
                                                                   ($0.36-$5.2)
Annual Compliance Costs

Conventional UST systems[b]
                                                                          $130
                                                                          $280
                                                                           $63
Emergency generator tanks (EGTs)
                                                                          $2.0
                                                                          $2.3
                                                                          $2.0
Airport hydrant fuel distribution systems (AHFDSs)
                                                                           $10
                                                                     < $0.1
                                                                            N/A
UST systems with field-constructed tanks (FCTs)
                                                                           $11
                                                                     < $0.1
                                                                            N/A
Cost to owners/operators to read UST regulation
                                                                          $5.5
                                                                          $5.5
                                                                          $5.5
State government administrative costs[c]
                                                                         $0.12
                                                                          $0.12
                                                                          $0.12
Total Annual Avoided Costs
(range of all values in italics)
                                                                          $310
                                                                    ($120-$530)
                                                                          $450
                                                                    ($210-$670)
                                                                          $230
                                                                     ($45-$420)
Total Annual Compliance Costs[d]
                                                                          $160
                                                                          $290
                                                                           $70
Net Cost (Savings) To Society[d,g]
[Total Compliance Costs Less Total Avoided Costs]
(range of all values in italics)
                                                                         ($160)
                                                                   $39 - ($370)
                                                                         ($160)
                                                                  $81 - ($380)
                                                                         ($160)
                                                                  $25 - ($350)
Non-Monetized Benefits[e]

Groundwater protected (billion gallons)

                                                                           130
                                                                       (50-240)
                                                                           170
                                                                       (74-270)
                                                                            92
                                                                       (17-180)
Acute events and large-scale releases
(e.g., releases from AHFDSs and FCTs)
                                                                  Not estimated
                                                                  Not estimated
                                                                  Not estimated
Ecological benefits
                                                                  Not estimated
                                                                  Not estimated
                                                                  Not estimated
Human health risks
                                                                  Not estimated
                                                                  Not estimated
                                                                  Not estimated
[a] Avoided costs are estimated for conventional UST systems and emergency generator tanks only. Avoided remediation costs from releases and groundwater incidents are the costs related to site remediation. Avoided vapor intrusion costs include additional avoided costs associated with the remediation of vapor intrusion cases; the RIA does not address human health risk associated with vapor intrusion. Avoided product loss costs are also separate and additive.
[b] Conventional UST systems include all systems that are not AHFDSs, FCTs, or EGTs.
[c] The costs for UST systems directly owned or operated by local, state, and federal government entities are included in the estimates of compliance costs within the other categories. Costs shown here reflect the administrative costs for state governments to read the final UST regulation, apply for state program approval, process notifications of ownership changes, and process one-time notifications of existence for AHFDS and UST systems with FCTs.
[d] Compliance costs include direct compliance costs and state oversight costs. For this regulatory impact analysis, direct compliance costs and state oversight costs provide a reasonable proxy to assess the final UST regulation's social costs. See Chapter 3.1 for further discussion.
[e] Due to data and resource constraints, EPA is unable to monetize some of the positive impacts of the final UST regulation. Chapter 4 of this document provides a qualitative discussion of these benefits.
[f] Totals may not add up due to rounding. Cost estimates were derived using a seven percent discount rate.
g The results show that all but one of the four estimates of cost savings for conventional systems exceed total regulatory costs (including FCT and AHFDS systems). As explained in Chapter 4 and Appendix H, one of the four experts provided estimates of avoided releases and averted groundwater incidents that do not result in net cost savings to society from the Selected Option. However, this expert also assumed a high level of noncompliance with the final UST regulation that is not consistent with the assumption of 100 percent compliance in the cost estimates. As a result, this low-end estimate of potential cost savings likely understates the cost savings that would be associated with a consistent, 100 percent compliance scenario. See Chapter 4 and Appendix H for detailed discussion of how these assumptions affect net benefits of the final UST regulation as calculated using responses from Expert 2.

Exhibit ES-5 summarizes the compliance costs and positive impacts of the final UST regulation under an alternative baseline where universes of UST systems and releases are assumed to decrease at a declining rate over time. Compliance costs do not change substantially under the alternative baseline, while estimates of avoided costs decrease by approximately 31 percent, as the universe of releases contracts substantially under the alternative baseline. In this scenario, annual net savings to society for the Selected Option average $60 million per year.

Exhibit ES-5

Comparison Of Annual Compliance Costs And Cost Savings Under Alternative Baseline[c,][e]

                       Selected Option
(2012$ millions)
                        Alternative 1
(2012$ millions)
                        Alternative 2
(2012$ millions)
Total Annual Avoided Costs[a,b]
(range of all values in italics)
                                                                          $220
                                                                     ($81-$360)
                                                                          $310
                                                                    ($140-$460)
                                                                          $160
                                                                     ($31-$290)
Total Annual Compliance Costs[c]
                                                                          $160
                                                                          $290
                                                                           $70
Net Cost (Savings) To Society[c,d]
[Total Compliance Costs Less Total Avoided Costs] (range of all values in italics)
                                                                          ($60)
                                                                   $74 - ($210)
                                                                          ($25)
                                                                 $140 - ($170)
                                                                          ($87)
                                                                  $39 - ($220)
[a] Avoided costs are estimated for conventional UST systems and emergency generator tanks only.
[b] Due to data and resource constraints, EPA is unable to monetize some of the positive impacts of the final UST regulation. Chapter 4 of this document provides a qualitative discussion of these benefits.
[c] Compliance costs include direct compliance costs and state oversight costs. For this regulatory impact analysis, direct compliance costs and state oversight costs provide a reasonable proxy to assess the final UST regulation's social costs. See Chapter 3.1 for further discussion.
d The results show that all but one of the four estimates of cost savings for conventional systems exceeded total regulatory costs (including FCT and AHFDS systems). As explained in Chapter 4 and Appendix H, one of the four experts provided estimates of avoided releases and averted groundwater incidents that do not result in net cost savings to society from the Selected Option. However, this expert also assumed a high level of noncompliance with the final UST regulation that is not consistent with the assumption of 100 percent compliance in the cost estimates. As a result, this low-end estimate of potential cost savings likely understates the cost savings that would be associated with a consistent, 100 percent compliance scenario. See Chapter 4 and Appendix H for detailed discussion of how these assumptions affect net benefits of the final UST regulation as calculated using responses from Expert 2.
[e] Totals may not add up due to rounding. Cost estimates were derived using a seven percent discount rate.

Economic Impacts

EPA's assessment of the economic impacts associated with this final UST regulation focused on the retail motor fuels sector, which accounts for approximately 80 percent of UST owners or operators. In this analysis, EPA describes supply and demand dynamics within the retail motor fuels market and the likely economic responses to increased compliance costs. Our screening assessment finds that average estimated facility-level costs of $715 may result in the market exit of approximately 19 firms, if these firms cannot pass any regulatory costs through to customers. This represents less than 0.1 of one percent of existing retail motor fuel facilities, and an even smaller fraction of all facilities affected by the final UST regulation. In comparison, approximately 2,024 facilities per year closed over the period between 2005 and 2013.

To address uncertainty related to the distribution of costs among UST facilities, we also constructed a worst-case sensitivity analysis, which identified the maximum number of facilities that could face significant economic impacts due to regulatory costs. We defined the worst case as the scenario where the highest possible cost occurred for the smallest facilities. We found that up to 4,500 facilities may exit the market in this unlikely worst-case scenario, representing 3 percent of existing retail motor fuel facilities and a similar rate to annual historical market exits. The limited magnitude of impacts even in the worst-case scenario suggests that the final UST regulation will not affect existing consolidation trends in the retail motor fuels industry, retail motor fuel prices, or consumption.

In addition, EPA's analysis suggests that the final UST regulation could result in a reallocation of costs from the public to private parties responsible for releases. Preventing releases under this UST regulation would increase compliance costs to facility owners, but the avoided releases would in many cases reduce remediation demand for taxpayer-funded state funds. This is likely to improve behavioral incentives, as the parties most likely to cause releases will also be responsible for preventing them. As discussed in Chapter 5, this reallocation could result in savings to state financial assurance funds in excess of $160 million per year.

Other Regulatory And Distributional Issues

	As part of our analysis, we assessed the final UST regulation's potential impacts related to:

   *       Energy impacts  -  The final UST regulation will not have significant adverse effects on energy supply, distribution, or use, including impacts on price and foreign supplies. It is, therefore, not a significant energy action under Executive Order 13211, Actions Concerning Regulations That Affect Energy Supply, Distribution, or Use (May 18, 2001).

   *       Regulatory flexibility  -  EPA's analysis determined that approximately 634 small entities (less than 1 percent of the universe of affected small entities) may experience economic impacts that exceed 1 percent of revenues, but only 19 of these entities would exit the market as a result of incurring costs greater than or equal to total profits. For various reasons, and especially due to different system configurations for smaller facilities, the actual number of affected entities is likely to be even fewer than the number estimated by the analysis. In comparison, this number is smaller than the recent industry consolidation rate of approximately 2,024 facilities per year in the retail motor fuels sector. The final UST regulation is unlikely to have a significant economic impact on a substantial number of small businesses or small governments.

   *       Small government impacts  -  The final UST regulation is not expected to have significant small government impacts. EPA's assessment of costs to state and local governments indicated that no government-owned UST facilities will experience costs that exceed 1 percent of revenues.

   *       Impacts on minority and low-income populations  -  Because the final UST regulation would increase regulatory stringency and reduce the number and size of releases, the final UST regulation is not expected to have any disproportionately high and adverse human health or environmental effects on minority or low-income populations, or on any community.

   *       Children's health protection  -  Because the final UST regulation is expected to reduce exposure to contaminated groundwater by reducing the number and size of releases, EPA does not expect the final UST regulation to have a disproportionate environmental health risk effect on children, as defined in Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). Moreover, while the risk assessment did not specifically measure exposure to children, it is unclear that children are disproportionately affected in the baseline. For example, adults could be the more sensitive receptor for cancer effects of contaminated groundwater due to the longer potential exposure from showering (inhalation of vapors) compared to children (ingestion of water while bathing), particularly those under age 5 who are assumed to take more baths and fewer showers.

   *       Regulatory planning and review  -  Pursuant to the terms of Executive Order 12866 (58 FR 51735, October 4, 1993), EPA determined the final UST regulation is an economically significant regulatory action because it may have an annual effect on the economy of $100 million or more, as defined under part 3(f)(1) of the Order. Findings of the regulatory cost analysis in Chapter 3 indicate the final UST regulation is projected to result in aggregate annual compliance costs of approximately $160 million under the Selected Option, $290 million under Alternative 1, and $70 million under Alternative 2.

   *       Unfunded mandates analysis  -  The final UST regulation is subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act (UMRA), because it contains federal mandates that may result in the expenditure by state, local, and tribal governments or by the private sector of $100 million or more in any one year. Exhibit ES-6 provides references for EPA's analyses responding to UMRA requirements under which this final UST regulation is subject.

Exhibit ES-6
             Location Of Analyses Responding To UMRA Requirements
                                  Requirement
                           Location In This Document
Identification of provision of federal law under which rule is being promulgated
Chapter 1
Assessment of costs and benefits to state, local, and tribal governments and the private sector
Chapters 3 and 4
Assessment of the effect on health, safety, and the natural environment
Chapter 4
Assessment of the extent to which such costs may be paid with federal financial assistance
Chapter 3; no Federal assistance is anticipated
Assessment of the extent to which there are available federal resources to carry out this mandate
Chapter 3; no Federal resources are anticipated
Estimates of future compliance costs
Chapter 3
Estimates of disproportionate budgetary effects on any type of government or private sector segment
Chapter 5
Estimates of the effect on the national economy
Chapters 3 and 5

   *       Federalism  -  Executive Order 13132, Federalism (64 FR 43255, August 10, 1999), defines policies that have federalism implications to include regulations with substantial direct effects on states, on the relationship between the federal government and states, or on the distribution of power and responsibilities among the various levels of government. EPA typically considers a policy to have federalism implications if it results in aggregate expenditures by state or local governments of $25 million or more in any one year. As Exhibit ES-7 below indicates, EPA does not expect any of the regulatory options to have significant federalism implications.

Exhibit ES-7

Summary Of Annual State And Local Government Costs[b]
                                    Element
                         Selected Option
($ millions)
                          Alternative 1
($ millions)
                          Alternative 2
($ millions)
Local Compliance Costs[a]
                                                                          $5.4
                                                                         $11.0
                                                                          $2.8
State Compliance Costs[a]
                                                                          $1.3
                                                                          $2.9
                                                                         $0.70
State Government Administrative Costs
                                                                         $0.12
                                                                         $0.12
                                                                         $0.12
Total State And Local Governments Costs[c]
                                                                          $6.8
                                                                         $14.0
                                                                          $3.6
[a] State and local government compliance costs are included in the total compliance costs presented in Exhibit ES-2.
[b] Cost estimates were derived using a seven percent discount rate.
[c] Total may not sum due to rounding.

   *       Tribal governments analysis  -  Executive Order 13175, Consultation and Coordination With Indian Tribal Governments (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications. EPA consulted with tribal officials early in the process of developing this UST regulation to welcome meaningful and timely input into its development. EPA began its consultation with tribes on possible changes to the UST regulation shortly after the passage of the Energy Policy Act of 2005. In addition to our early consultation with tribes, EPA again reached out to the tribes as we started the official regulatory process and throughout the development of the UST regulation. EPA sent letters to leaders of over 500 tribes, as well as to tribal regulatory staff, inviting their participation in developing the regulation. EPA heard from both tribal officials who work as regulators as well as representatives of owners and operators of UST systems in Indian country. The tribal regulators raised concerns about ensuring parity of environmental protection between states and Indian country. The changes to the UST regulation are needed to ensure parity between UST systems in states and in Indian country. This final UST regulation will ensure installed equipment is working properly and protects the environment from potential releases.

            As part of this analysis, EPA concluded that the final UST regulation will have tribal implications to the extent that tribally-owned entities with UST systems on Indian country would be affected. However, it will neither impose substantial direct compliance costs on tribal governments, nor preempt tribal law. Total costs to owners and operators of tribally-owned UST systems are approximately $0.67 million.

   *       JOINT IMPACTS OF REGULATIONS  -  Facilities in the UST system universe are affected by a number of existing regulations, including state regulations and Spill Prevention, Control, and Countermeasure (SPCC) regulations. At the time of the 1988 UST regulation, completely buried tanks greater than 42,000 gallons and located near navigable waters of the United States or adjoining shorelines were subject to both the UST regulation and SPCC regulation. Currently, a subset of UST systems in the universe is regulated by SPCC; these include EGTs, AHFDSs, and FCTs. To the extent that the requirements imposed on these UST systems via the final UST regulation are more or less stringent than the SPCC regulation currently governing them, the final UST regulation may cause an increase or a reduction in overall inspection and monitoring requirements and costs for these UST systems. To account for this, EPA generated baseline assumptions for these systems using information from the Department of Defense, the owner of the majority of all AHFDSs and FCTs. EGTs are assumed to incur all incremental costs beyond state regulatory baseline costs; to the extent that these systems are regulated under SPCC, this may overstate costs. EPA does not believe that the final UST regulation creates a serious inconsistency or interferes with any other actions planned or undertaken by other agencies.

 Chapter 1.	Introduction
This document presents an analysis by the U.S. Environmental Protection Agency (EPA) Office of Underground Storage Tanks (OUST) of the costs, benefits, and economic impacts of the final targeted changes to the underground storage tank (UST) regulation. The final UST regulation serves the purpose of strengthening the existing UST regulation by increasing the emphasis on proper operation and maintenance of UST systems and improved maintenance of release detection equipment. The changes anticipated under this final UST regulation also acknowledge improvements in technology over the last 25 years, including the ability to perform release detection for many tank systems that were previously deferred.
1.1	Background
	In 1984, Congress responded to the increasing threat to groundwater from leaking UST systems by adding Subtitle I to the Solid Waste Disposal Act (SWDA). SWDA required EPA to protect the environment and human health from UST releases by developing a comprehensive regulatory program for UST systems storing petroleum or certain hazardous substances. In 1986, Congress amended Subtitle I of SWDA and created the Leaking Underground Storage Tank Trust Fund (LUST Trust Fund) to oversee and pay for cleanups at sites where the owner or operator is unknown, unwilling to pay, or unable to pay.

	EPA promulgated the UST regulation in 1988 (40 CFR Part 280). This regulation set minimum standards for new tanks and required owners and operators of existing tanks to upgrade, replace, or close their existing tanks. The 1988 regulation set deadlines for owners and operators to meet the new requirements. By 1998, owners and operators had to meet new UST system requirements, upgrade their existing UST systems, or close them. Owners and operators who chose to upgrade had to ensure that every UST system had spill prevention equipment (e.g., spill buckets), overfill prevention equipment, and was protected from corrosion. In addition, owners and operators were required to monitor their UST systems for releases using release detection (phased in during the 1990s depending on the year of installation of each UST system). Finally, owners and operators were required to have financial responsibility (phased in through 1998) to ensure that they are financially able to pay for any releases that occur. No significant changes have been made to these requirements since 1988.

	In 1988, EPA also promulgated a regulation for state program approval (40 CFR Part 281). Since states are the primary implementers of the UST program, EPA wanted to set up a process where state programs could operate in lieu of the federal program if certain requirements were met. This regulation describes the minimum requirements states must meet to have their regulations operate in lieu of the federal regulation.

	In 2005, the Energy Policy Act (EPAct) further amended Subtitle I of SWDA. The EPAct requires states that receive federal Subtitle I money from EPA to meet certain requirements. EPA developed grant guidelines for states regarding: operator training; inspections; delivery prohibition; secondary containment; financial responsibility for manufacturers and installers; public record; and state compliance reports on government UST systems.

1.2	Need for Regulatory Action
	After Congress passed EPAct, EPA decided to revise the 1988 UST regulation (at 40 CFR Part 280), primarily to ensure parity in Indian country. Key EPAct provisions (such as secondary containment and operator training) apply to all states receiving federal Subtitle I money, regardless of their state program approval status; but these key provisions do not apply in Indian country (or in states and U.S. territories that do not meet EPA's operator training or secondary containment grant guidelines). In order to establish federal UST requirements similar to the UST secondary containment and operator training requirements of EPAct, EPA decided to revise the 1988 UST regulation. Without these changes, EPAct provisions will not apply in Indian country. These revisions will also fulfill the objectives of the EPA-Tribal UST Strategy (August 2006) in which both EPA and tribes recognized the importance of ensuring parity in implementing UST program requirements in states and territories, as well as in Indian country.

      EPA decided that this is also an appropriate time to change the 1988 UST regulation to reflect technology improvements, address outdated requirements, and place a stronger emphasis on operations and maintenance. While EPA has issued many guidance documents and used various implementation approaches and techniques over the last 25 years, we have not made significant changes to the original 1988 UST regulation. Indeed, most states have passed requirements that go far beyond the 1988 UST regulation that provide greater environmental protection. These state regulations fully implement provisions of the EPAct and improve other important areas of the 1988 UST regulation that have become outdated.

      Furthermore, while information on sources and causes of releases show that releases from tanks are less common than they once were, releases from piping and spills and overfills associated with deliveries have emerged as more common problems. In addition, failures of equipment and operations at the dispenser have emerged as one of the leading sources of releases. The lack of proper operation and maintenance of UST systems is a main cause of release from these areas. Data also indicate that release detection equipment only detects about one quarter of all releases. While some of those releases occur in areas not required to have release detection equipment, other releases that should be detected are not because of problems with the operation and maintenance of the release detection equipment.

      Since the beginning of the UST program, preventing petroleum releases into the environment has been one of the program's primary goals. EPA and our partners have made major progress in reducing the number of new releases, but over 5,000 releases are still discovered each year. Because existing publicly-funded mechanisms and institutions frequently cover at least part of the costs of release remediation, many owners and operators of UST systems do not bear the full costs of their actions. Petroleum releases thus represent a negative externality caused by UST system operators, as the individuals and firms that cause releases do not bear their full costs. This represents a failure of the market to fully internalize the cost to society of operating an UST system: private costs do not equal social costs. A combination of revised technical standards and inspection and testing requirements represents the most appropriate method for reducing the number of future releases and mitigating the impact of existing negative externalities.

	In revising the 1988 regulation, EPA wanted to make sure the regulation development process was open and transparent and that all stakeholders had an opportunity to share their ideas as well as their concerns. From the beginning of this process, EPA recognized the concerns about costs on owners and operators and was committed to limiting the requirements for retrofits. We reached out to all stakeholders, including state and tribal regulators, federal facilities, members of the petroleum industry including representatives of owners and operators as well as equipment manufacturers, small businesses, local governments, and environmental and community groups. Over a two-year period, we held conference calls, solicited comments and provided multiple opportunities for stakeholders to share their ideas as well as for us to keep them informed of where we were in the process.

	From this extensive stakeholder outreach, EPA compiled potential proposed changes to the UST regulation. EPA shared all ideas with stakeholders and gave them an opportunity to comment on each idea. We then revised the list of potential changes and added items based on data, analysis, and consideration of costs and benefits. Ultimately, EPA identified the items in the proposed UST regulation as those which needed regulatory changes at the time; the proposed UST regulation was issued in November 2011 for a 90-day public comment period. EPA then extended this public comment period for an additional 60 days. EPA received submissions from over 190 commenters. Based on these comments, EPA revised the 2011 proposed UST regulation and is now finalizing the UST regulation, as described below.
1.3	Summary of the Final UST regulation
EPA is revising the UST regulation to: establish federal requirements that are similar to certain key provisions of the Energy Policy Act; ensure owners and operators perform proper operation and maintenance; address UST systems deferred in the 1988 UST regulation; update the regulation to current technology and practices; and make technical and editorial corrections. Specifically, EPA is requiring the following set of revisions (hereafter referred to as the Selected Option):
   *       Establish federal requirements for secondary containment and operator training similar to those established by EPAct for states that receive federal Subtitle I money

   *       Add operation and maintenance requirements
         o             Walkthrough inspections
         o             Overfill prevention equipment inspections
         o             Spill prevention equipment tests
         o             Containment sump tests
         o             Operability tests for release detection equipment

   *       Address UST systems deferred in the 1988 UST regulation
         o             Remove release detection deferral for emergency generator tanks
         o             Remove deferrals for airport hydrant fuel distribution systems (AHFDSs) and UST systems with field-constructed tanks (FCTs)

   *       Provide for other changes to improve release prevention and detection and program implementation
         o             Require testing after repairs to spill and overfill prevention equipment, and secondary containment
         o             Eliminate flow restrictors in vent lines as an overfill prevention option for all new tanks and when overfill prevention equipment is replaced
         o             Require closure of lined tanks that cannot be repaired according to a code of practice
         o             Address responses to interstitial monitoring alarms
         o             Retain vapor monitoring and groundwater monitoring as methods of release detection for tanks and piping (for those installed before the effective date of today's final UST regulation) only if owners and operators demonstrate proper installation and performance through a site assessment
         o             Require notification of ownership change
         o             Establish requirements for demonstrating compatibility with fuels containing greater than E10 and greater than B20

   *       Make general updates to the UST regulation
         o             Reference newer technologies, including explicitly adding statistical inventory reconciliation (SIR) and continuous in-tank leak detection (CITLD) as release detection methods
         o             Update codes of practice listed in the UST regulation
         o             Remove old upgrade and implementation deadlines
         o             Make editorial and technical corrections

   *       Revise the state program approval regulation (40 CFR Part 281) to be consistent with the above revisions
1.4	Alternative Regulatory Options
In addition to assessing the impacts of the Selected Option, this document assesses the costs, benefits, and economic impacts of two regulatory alternatives, as outlined in Exhibit 1-1. Please refer to the preamble for a discussion of the rationale behind the development of these two alternatives.
While some of the regulatory requirements remain constant across all alternatives, EPA evaluated variations in the subset of proposed requirements that change across alternatives. The differences between the three regulatory options considered in this regulatory impact analysis are described in Exhibit 1-1.
Note that each option (i.e., Selected, Alternative 1, and Alternative 2) considered by EPA contains a set of new requirements that does not vary across these options. EPA believes the requirements in this set represent, at a minimum, changes that need to be included in the final UST regulation. Specifically, these requirements are:
          *       Testing after repairs to spill and overfill prevention equipment, and interstitial spaces
          *       Adding SIR/CITLD to regulation with performance criteria
          *       Reporting and testing for interstitial alarms
          *       Removing the deferral for release detection for emergency generator tanks
          *       Notification of ownership change
          *       Closure of lined tanks that cannot be repaired according to a code of practice; and
          *       Requiring operator training and secondary containment

Exhibit 1-1
                Options Considered For The Final UST regulation
                            Requirement Description
                                    Options

                                   Selected
                                 Alternative 1
                                 Alternative 2
                              Release Prevention

Walkthrough inspections
30-day
30-day
(as proposed in Nov 2011)
Quarterly
Overfill prevention equipment inspections
3 year
Annual
Not required
Spill prevention equipment tests
3 year
Annual
3 year
Containment sump testing
3 year
Annual
Not required
Testing after repairs to spill and overfill prevention equipment, and secondary containment
Required
Required
Required
Eliminate flow restrictors in vent lines for all new tanks and when overfill prevention equipment is replaced
Required
Required
No change from existing regulation
                               Release Detection

Operability tests for release detection equipment
Annual (plus annual check of sumps)
Annual
(as proposed in Nov 2011)
Annual (plus annual check of sumps)
Add SIR/CITLD to regulation with performance criteria
Required
Required
Required
Response to interstitial monitoring alarms
Required
Required
Required
Groundwater and vapor monitoring for release detection
Continue to allow with site assessment
5-year phase out
(as proposed in Nov 2011)
No change from existing regulation
Remove release detection deferral for emergency generator tanks
Required
Required
(as proposed in Nov 2011)
Required
                                     Other

Require notification of ownership change
Required
Required
Required
Closure of lined tanks that cannot be repaired according to a code of practice
Required
Required
Required
Requirements for demonstrating compatibility with fuels >E10 and >B20
Required
Required
(as proposed in Nov 2011)
No change from existing regulation
Remove deferrals for airport hydrant fuel distribution systems and UST systems with field-constructed tanks
Regulate under alternative release detection requirements
Require AHS/FCT notify implementing agency and report releases (with no other requirements)
Maintain deferral
                           EPAct-related Provisions

Operator training
Required
Required
Required
Secondary containment
Required
Required
Required
[*] In the 2011 proposed regulation, these changes generally consisted of more or stricter requirements than what is in the final UST regulation. For example, the 30-day walkthrough inspections in the 2011 proposed UST regulation included monthly check of sumps. Please see the 2011 proposed UST regulation for details.

Many of the requirements in the final UST regulation will not immediately impose new costs upon UST owners or operators. For example, new requirements for periodic testing of equipment do not require owners or operators to perform those tests at the time the regulation comes into effect; depending on the requirement, owners or operators may have up to three years to satisfy the new requirements. EPA's analysis accounts for this delay in its estimate of costs by discounting the costs associated with each requirement as shown in Exhibit 1-2. EPA assumes that the monetized positive impacts associated with these requirements accrue at the end of the year in which costs occur since some beneficial impacts may lag requirements.
Exhibit 1-2

                Years Until Final Requirements Become Effective
                                  Requirement
                        Number of years until effective
Release Prevention

Walkthrough inspections
                                     3[a]
Overfill prevention equipment inspections
                                       3
Spill prevention equipment tests
                                       3
Containment sump testing[7]
                                       3
Release Detection

Operability tests for release detection methods
                                     3[b]
Remove deferral for emergency generator tanks
                                     3[c]
Other

Remove deferral for airport hydrant fuel distribution systems (Subparts B, C, D and H)
                                       3
Remove deferral for UST systems with field-constructed tanks (Subparts B, C, D and H)[9]
                                       3
EPAct-related Provision

Operator training
                                       3
Please refer to the preamble section for each requirement for a discussion on the rationale behind the delayed implementation periods.
a This requirement is effective immediately under Alternative 1.
b This requirement is effective after one year under Alternative 1. In addition, under Alternative 1, groundwater and vapor monitoring are eliminated as release detection methods and must be phased out within five years.
[c] This requirement is effective after one year under Alternative 1.

Finally, EPA is including a set of revisions and clarifications that are not expected to have any economic impact, due to either the nature of the requirement or the interaction between the new UST regulation and existing regulation. The only cost associated with these clarifications and changes is the cost of reading the new regulation. These revisions include:
          *       Updating the regulation to reference newer technologies
          *       Updating the codes of practice listed in the regulation
          *       Updating the regulation to remove old upgrade and implementation deadlines
          *       Updating the regulation for editorial and technical corrections
          *       Revising the State Program Approval regulation (40 CFR Part 281) to be consistent with the above revisions
1.5	Scope of Analysis
	Within the constraints of data availability, this analysis attempts to capture all quantifiable and qualitative impacts of the final UST regulation. EPA obtained sufficient data to identify, by state, the number of units likely to be affected by each change in the regulation. The analysis uses these data to assess the compliance costs on these units and relevant state governments. In conducting these analyses, EPA also assessed the sensitivity of outcomes to key assumptions. Separately, the analysis monetizes a number of positive impacts of the regulation, including the avoided costs generated by avoided releases and reduction in severity of releases, avoided product loss, and avoided vapor intrusion damages. This analysis quantifies, but does not value, groundwater impacts. Finally, due to data and resource limitations, this analysis was unable to quantify or value human health benefits or ecological impacts, but addresses these qualitatively.

	In addition to identifying costs and the positive impacts of the regulation, this analysis also examines the economic and distributional impacts of the regulation. The economic impact analysis includes the final UST regulation's effect on facility closures, employment, and energy output and cost. The analysis of the distributional impacts of the regulation examines the effect of a reduction in releases on state financial assurance funds, impacts on children's health, small business impacts, and impacts on low-income and minority populations. Finally, this analysis considers the final UST regulation's impacts related to certain executive orders and statutes, including the Unfunded Mandates Reform Act, tribal governments, and federalism.
1.6	Report Organization
To support the development of the final UST regulation, EPA designed and conducted this analysis of the regulation's costs, benefits, and economic impacts consistent with the requirements of Executive Order 12866, and OMB Circular A-4. Data, methods, and results of this analysis are presented in the following chapters:
   *       Chapter 2: Universe of UST Systems Affected by the Final UST regulation. This chapter identifies a profile of the entities that may be affected by the final UST regulation.
   *       Chapter 3: Assessment of Compliance Costs. This chapter summarizes the methods employed by EPA to assess the cost impacts of the final UST regulation.
   *       Chapter 4: Assessment of Benefits and Cost Savings. This chapter presents estimates of the benefits and avoided costs of the final UST regulation.
   *       Chapter 5: Distributional Impacts and Considerations. This chapter summarizes the assessment of distributional impacts of the final UST regulation, including economic and energy impacts, effects on small businesses and governments, impacts on low-income and minority populations, and children's health effects.
   *       Chapter 6: Other Statutory and Executive Order Analyses. This chapter summarizes analyses required by certain statutes or executive orders, including regulatory planning and review, impacts created by unfunded mandates, federalism implications, effects on tribal governments, and joint impacts of the final UST regulation in the context of existing regulations.
   *       Chapter 7: Comparison of Costs, Benefits, and Other Impacts. This chapter summarizes and compares the costs, cost savings, and benefits of the final UST regulation.
   *       Appendices. We present the details of methods and assumptions we employ in a number of appendices.

 Chapter 2.	Universe of UST Systems Affected by the Final UST regulation
This regulatory impact analysis addresses the effects of the final regulatory changes on four types of UST systems: conventional UST systems with prefabricated tanks that store and dispense petroleum products; emergency generator tank systems that store fuel for occasional use; UST systems with field-constructed tanks that are typically designed to store large volumes of fuel; and airport hydrant fuel distribution systems that provide large volumes of fuel to aircraft using underground distribution systems.
This chapter describes the universe of systems, facilities, firms, and sectors that are likely to be affected by the final regulatory changes, and documents the extent to which state regulations already require compliance with the final UST regulation.
2.1	Types of Entities Affected by the Final UST regulation
      The four types of UST systems that are potentially affected by the final UST regulation are characterized as follows:
      Conventional UST systems (conventional USTs): These systems include the universe of facilities and tanks that are currently subject to existing regulations, along with ancillary equipment (e.g., piping, dispensers, sumps, spill prevention equipment, and release detection equipment). The majority of these systems store and dispense petroleum products and are typically found at gas stations. A limited number store other hazardous substances, but the regulatory impact analysis does not consider these UST systems separately. These UST systems are subject to all requirements under 40 CFR Part 280.
      Emergency generator tank systems (EGTs): Emergency generator tank systems refer to the tanks and piping for systems that provide longer-term storage of fuel for occasional use as a back-up fuel supply. These tanks are currently deferred from 40 CFR Part 280 Subpart D (release detection) but are subject to all other requirements under 40 CFR Part 280. The final UST regulation does not address emergency tanks at nuclear power plants, which are regulated by the Nuclear Regulatory Commission under 10 CFR Part 50, appendix A.
      UST systems with field-constructed tanks (FCTs): Field-constructed tanks are underground bulk storage tanks that are built on-site because they are too large to be pre-fabricated. All identified field-constructed tanks currently in operation are owned by federal facilities and mainly serve operations at military bases. These tanks are currently deferred from all regulation under 40 CFR Part 280, except for Subparts A and F, but are typically subject to regulation under the Oil Pollution Act of 1990, 40 CFR Part 112 (EPA's Spill Prevention, Control, and Countermeasure regulation).
      Airport Hydrant Fuel Distribution Systems (AHFDSs): Airport hydrant fuel distribution systems are systems that include one or more tanks (either above-ground or underground), underground piping, and underground ancillary equipment used to fuel aircraft. These systems do not typically have a dispenser at the end of the piping run, but instead have a pressurized hydrant (fill stand). Large commercial and military airports employ these systems, but most commercial systems have only above-ground storage tanks and are thus not affected by the final UST regulation. These systems are currently deferred from all regulation under 40 CFR Part 280, except for Subparts A and F, but are typically subject to regulation under 40 CFR Part 112.
2.2	Configuration of Average Conventional UST System
Conventional UST systems reflect a relatively consistent configuration of standard equipment. While facility size and complexity vary significantly, this analysis assumes that a typical (average) conventional UST system is configured as follows (Exhibit 2-1):
Exhibit 2-1

          Assumed Average Configuration For A Conventional UST System
                               System Component
                                 Configuration
Pipes per tank
                                       1
Feet per pipe
                                      100
Fill pipes (per tank)
                                       1
Spill prevention equipment (per fill pipe)
                                       1
Under-Dispenser Containment (UDC) (per tank)
                                       2
Turbine sumps (per tank)
                                       1

These assumptions best characterize motor fuel retailers, which represent approximately 80 percent of the 577,981 conventional UST systems in operation in 2013. EGT systems and other conventional UST systems used to store fuel or hazardous substances are likely to have systems with similar components but less complex dispenser systems. The configurations of FCTs and AHFDSs are considered separately, and are described in detail in Appendix A. Exhibit 2-2 provides an illustration of an UST system at a retail motor fuel establishment. Note that in this exhibit, the "dispenser sump" is a specific form of under-dispenser containment, and the "spill bucket" is an example of spill prevention equipment.
                                  Exhibit 2-2

                 Configuration of Retail Motor Fuel UST System

2.3	UST Universe Size and Distribution Across Sectors
       The December 2013 Semi-Annual Report of UST Performance Measures reports a universe of 577,981 active petroleum tanks (UST systems) in the United States and its territories.[,] This total includes conventional UST systems and emergency generator tank systems. Estimates based on state data suggest that approximately 3.0 percent, or 17,339 of the 577,981 active UST systems, are emergency generator tanks.
       In addition to EGT and conventional UST systems, the final UST regulation addresses UST systems with FCTs and AHFDSs. While these two types of systems are deferred under current EPA regulation, a subset may be regulated by individual states and included in the total estimate of tanks provided by those states. For the purpose of this analysis, however, these two universes are considered to be separate from the 577,981 tanks identified in the 2013 EPA report. The total universe of UST systems with FCTs and AHFDSs includes approximately 334 UST systems with FCTs, and 74 AHFDSs (each hydrant system is supported by an average of roughly eight linked tanks) operated by the U.S. Department of Defense (DoD), 12 FCTs operated by the U.S. Department of Energy (DoE) and 10 AHFDSs operated at commercial airports.
      Most UST systems in the United States are located at motor fuel retail establishments (i.e., gas stations), and virtually all retail motor fuel establishments use UST systems. Approximately 148,000 (147,902) retail fueling sites operated in the United States in 2013. Of these, approximately 127,000 included convenience stores.
      An analysis of state data by EPA concludes that the average retail motor fuel establishment has 3.07 tanks (UST systems). Assuming approximately 3.07 UST systems per facility and 147,902 facilities, 454,774 UST systems, or 79 percent of all active UST systems, are associated with retail motor fuel establishments.
      In addition to traditional motor fuel retailers, big-box retailers, or hypermarkets, represent a growing segment of the retail motor fuel seller market. This category (NAICS code 452910) includes stores operated by Wal-Mart, Costco, and other large companies. Collectively, these firms operate approximately 5,100 filling stations; each station is likely to have at least three UST systems.
      Other industry sectors that report use of UST systems include agriculture (crop production and animal production), commercial (wholesale trade, retail trade, accommodation, and food services), communications and utilities (wired telecommunications carriers and electric power generation, transmission, and distribution), hospitals, manufacturing, transportation, local and state government operations, and federal facilities run by the U.S. Departments of Defense and Energy. Collectively these sectors comprise approximately 120,000 UST systems, including those in the government sector (Exhibit 2-3). In many cases, firms in these sectors use UST systems for fueling fleets of vehicles such as school buses, delivery trucks, or rental cars. In other cases, UST systems store fuel for operations or emergency use, used oil, or hazardous substances.
      Facilities in sectors other than retail motor fuel have, on average, between 1.5 and 2.0 UST systems at the facilities that use UST systems. The actual number of UST systems at a specific facility, however, is likely to vary significantly depending on facility size and focus.
Results of an analysis of public UST records of 54 states and territories performed for EPA suggest that the average number of UST systems per facility (across all sectors that use conventional UST systems or EGTs), is approximately 2.71.

Exhibit 2-3

                 Summary Of Universe Of UST Systems By Sector

                                Industry Sector
                                     NAICS
                                    2009 a
                                    2013 b

                     Number of Facilities with UST Systems
                             Number of UST Systems
                     Number of Facilities with UST Systems
                             Number of UST Systems

Retail Motor Fuel Sales
                                      447
                                    161,768
                                    481,108
                                    147,902
                                    454,774
Commercial (wholesale trade, retail trade, accommodation, and food services)
                         42, 44-45, 72 (excluding 447)
                                    21,652
                                    49,793
                                    27,356
                                    47,068
Institutional (hospitals only)
                                      622
                                     2,220
                                     3,631
                                     2,098
                                     3,432
Manufacturing
                                     31-33
                                     8,822
                                    14,536
                                     8,339
                                    13,740
Transportation
(air, water, truck, transit, pipeline, and airport operations)
                              481, 483-486, 48811
                                     8,153
                                    14,422
                                     7,707
                                    13,633
Communications and Utilities (wired telecommunications carriers; and electric power generation, transmission, and distribution)
                                  5171, 2211
                                     6,641
                                     9,738
                                     6,278
                                     9,205
Agriculture (crop and animal production)
                                   111, 112
                                      847
                                     1,534
                                      801
                                     1,450
Local governments c
                            Government jurisdiction
                                      n/e
                                    24,458
                                      n/e
                                    23,119
State governments c
                            Government jurisdiction
                                      n/e
                                     6,114
                                      n/e
                                     5,780
Federal government c
                           Government jurisdiction
                                      n/e
                                     6,114
                                      n/e
                                     5,780
Total: Conventional UST systems and EGTs

                                  210,103[d]
                                    611,449
                                  200,480[d]
                                    577,981

FCTs: Department of Defense
                            Government jurisdiction
                                      239
                                      239
                                      334
                                      334
FCTs: Department of Energy
                            Government jurisdiction
                                      --
                                      --
                                      12
                                      12
AHFDSs: Department of Defense
                            Government jurisdiction
                                      162
                                   1,296[e]
                                      71
                                    592[e]
AHFDSs: Commercial Airports
                                     4581
                                      --
                                      --
                                      10
                                      64
Total: FCTs and AHFDSs

                                      401
                                     1,535
                                      430
                                     1,002
[a]	Analysis based on E[2], Incorporated. Review of state databases, "Draft Industry and Facility Profiles," Task Order No. 1010  -  General Technical and Programmatic Support in Implementing the Energy Policy Act of 2005, Amendment 1, TDD #11. December 18, 2006. Estimate of 168,987 retail motor fuel facilities with UST systems from "2005 U.S. motor fuel station count: 168,987," National Petroleum News, May 19, 2005 (annual survey of states to collect data on number of stations), adjusted to reflect 2009 universe of 611,449 UST systems. All sector adjustments proportional except retail motor fuel sales, which reflects the 2008 estimate of 161,768 facilities with UST systems from National Petroleum News. "MarketFacts 2008 Overview." August 2008, used as a proxy for the number of such facilities in 2009. (See also: Industrial Economics, Inc. "Preliminary Assessment and Scoping of Data Related to Potential Revisions to the UST Regulations." Work Assignment 1-25, Tasks 2-4 November 20, 2008.)
[b] Analysis based on 2009 column (see note a above), adjusted to reflect 2013 universe of 577,981 UST systems. All sector adjustments proportional except retail motor fuel sales, which reflects the 2013 estimate of 147,902 facilities with UST systems from National Association of Convenience Stores. Who Sells America's Fuel? Accessed at: http://www.nacsonline.com/YourBusiness/FuelsReports/GasPrices_2014/Retail-Operations/Pages/Who-Sells-Americas-Fuel.aspx. The NACS Retail Fuels report noted 152,995 total facilities dispensing motor fuel commercially, of which 5,093 are hypermarketers and not included in the retail motor fuel sales category. (See also: Industrial Economics, Inc. "Preliminary Assessment and Scoping of Data Related to Potential Revisions to the UST Regulations." Work Assignment 1-25, Tasks 2-4 November 20, 2008.)
[c]	See: ICF. "Economic Impact Analysis of Additional Mechanisms for Local Government Entities to Demonstrate Financial Responsibility for Underground Storage Tanks." December 1992. Exhibit 3-1. Estimates of local government UST systems adjusted using the 1987 Census of Governments. Consistent with this analysis, the number of government UST systems is assumed to be two percent of all 2013 UST systems owned by state and federal governments and four percent of all 2013 UST systems owned by local governments.
[d]	The totals shown are the sum of the number of facilities of the rows above. These estimates are used only to establish distribution of facilities across sectors based on available data.
[e]	This number assumes that there are eight tanks per AHFDS. For more detail on assumptions for AHFDSs, see Appendix A.

2.4	Universe of Facilities and Systems Potentially Affected by Final UST regulation
EPA expects that all facilities or UST systems in the universe of conventional UST systems will be required to comply with one or more regulatory changes in the final UST regulation, but the number of facilities and systems affected by each specific regulatory change will vary depending on the extent of current (baseline) state regulations and the type of equipment currently in use.
      To estimate the number of systems that will be required to comply with each regulatory change, EPA reviewed publicly available data about state regulations, combined with data from a limited sample of states and equipment providers about the use of different technologies for release prevention and detection.
      Exhibit 2-4 identifies the total number of UST systems that could potentially be affected by each regulatory change in the final UST regulation, based on the baseline technology currently in place in the universe of systems. Exhibit 2-4 identifies the number of UST systems or facilities with relevant technologies, the type of system (i.e., conventional UST and EGT systems, facilities with conventional UST systems or EGTs, AHFDSs, or FCTs), the proportion of the relevant universe of UST systems with the technology, a summary of the assumptions that define the number of affected units, and the source of those assumptions. Note that changes for AHFDSs, EGTs, and FCTs affect only those universes of facilities, and EPAct-related provisions affect only facilities and UST systems in Indian country. See Appendix B for detailed descriptions of the values and sources used in each calculation. The estimates in Exhibit 2-4 do not reflect baseline state regulations (e.g., whether a state already requires spill prevention equipment testing). As discussed later in this chapter, some baseline state requirements satisfy requirements of the final UST regulation.

Exhibit 2-4
        Potential Number And Type Of Units Affected By Each Requirement
                               Regulatory Change
                                   Universe
                Proportion of Total Universe Affected Annually
                    Number of Potentially Affected Systems
                                  (Annual) a
                                  Assumptions
                                    Source
Release Prevention
Walkthrough inspections
Facilities with Conventional UST systems and EGTs
                                    100.0%
                              213,277 facilities
All facilities require periodic walkthrough inspections.
Not applicable  -  all facilities require inspections.
Overfill prevention equipment inspections
Conventional UST systems and EGTs
                                    100.0%
                                577,981 systems
Percentage of UST systems with overfill prevention equipment.
E[2], Incorporated, Task Order No. 3003, TDD #7: across 10 states, 99.8% of systems had overfill prevention equipment; EPA conservatively assumes all UST systems have overfill prevention equipment.
Spill prevention equipment tests
Conventional UST systems and EGTs
                                     90.0%
                                520,183 systems
One-to-one spill prevention equipment to tank ratio; 10 percent have self-monitoring mechanism and do not need monitoring.
EPA estimate based on information discussions with service contractors and inspectors.
Containment sump testing
Conventional UST systems and EGTs
                                     18.3%
                                    105,771
                                    systems
Pipes that use interstitial monitoring and do not use continuous sensors, pressure, vacuum, or liquid-filled leak detection monitoring mechanisms.
E[2], Incorporated, Task Order No. 3003, TDD #5, Table 13.
Spill prevention equipment inspection after repair
Conventional UST systems and EGTs
                                     2.5%
                                14,450 systems
Spill prevention equipment requires fix once every four years; repairs are used as the fix 10 percent of the time.
E[2], Incorporated, Task Order No. 3003, TDD #7: across 10 states, 99.8% of systems had overfill prevention equipment; EPA conservatively assumes all UST systems have overfill prevention equipment; repair/replace frequencies are EPA assumptions.
Overfill prevention equipment test after repair
Conventional UST systems and EGTs
                                     2.0%
                                11,560 systems
Overfill prevention equipment requires fix once every five years; repairs are used as the fix 10 percent of the time.
EPA estimated that only a small (10%) percentage of overfill devices were repaired rather than replaced based on verbal conversations with service contractors. PEI provided the five-year estimate based on information compiled from their members. This was also supported by answers from 3 vendors dated 11/8/12.
Secondary containment test after repair
Conventional UST systems and EGTs
                                     3.3%
                                19,324 systems
Tanks and pipes that use interstitial monitoring and do not use continuous sensors, pressure, vacuum, or liquid-filled leak detection monitoring mechanisms. Includes five percent of tanks and 90 percent of piping that use interstitial monitoring. Assumes 20 percent of pipes and five percent of tanks require repair every year.
E[2], Incorporated, Task Order No. 3003, TDD #5, Table 13; repair/replace frequencies are EPA assumptions.
Eliminate flow restrictors in vent lines for all new tanks and when overfill prevention equipment is replaced
Conventional UST systems and EGTs
                                     13.5%
                               78,256 systems[b]
13 percent of new UST systems would have installed flow restrictors in vent lines, and 13 percent of existing UST systems with replaced overfill prevention equipment would have installed flow restrictors in vent lines. Assumes five percent turnover of UST systems, a 19 percent test fail rate for flow restrictor, and that 90 percent of fixes require replacement of the flow restrictor.
Information on number of new UST systems that would install flow restrictors provided by Robert Penkes, PEI, in August 2009; remainder from E[2], Incorporated, Task Order No. 3003, TDD #21.
Release Detection
Operability tests  -  ATG
Conventional UST systems and EGTs
                                     33.7%
                                194,548 systems
UST systems that use automatic tank gauges.
E[2], Incorporated, Task Order No. 3003, TDD #5, Table 11.
Operability tests  -  interstitial monitoring
Conventional UST systems and EGTs
                                     18.8%
                                108,499 systems
UST systems that use interstitial monitoring (excluding five percent that conduct manual testing of the interstice).
E[2], Incorporated, Task Order No. 3003, TDD #5, Table 11.
Operability tests  -  line leak detection
Conventional UST systems and EGTs
                                     27.5%
                                159,221 systems
Pressurized piping systems that use electronic line leak detectors.
E[2], Incorporated, Task Order No. 3003, TDD #5, Table 11.
Operability tests  -  groundwater and vapor monitoring
Conventional UST systems and EGTs
                                     4.5%
                                25,968 systems
UST systems that use vapor monitoring and/or groundwater monitoring as their sole release detection method(s).
E[2], Incorporated, Task Order No. 3003, TDD #5.
Eliminate groundwater and vapor monitoring as release detection methods (Alternative 1 only)
Conventional UST systems and EGTs
                                     4.5%
                                25,968 systems
UST systems that use vapor monitoring and/or groundwater monitoring as their sole release detection method(s). Universe affected phases in over five years.
E[2], Incorporated, Task Order No. 3003, TDD #5.
Add SIR/CITLD to regulation with performance criteria
Conventional UST systems and EGTs
                                     0.5%
                                 2,809 systems
13 percent of UST systems use SIR; 15 percent of these use qualitative methods. Of these, 25 percent are assumed to incur costs to comply.
E[2], Incorporated, Task Order No. 3003, TDD #5, Table 11.
Response to interstitial monitoring alarms
Conventional UST systems and EGTs
                                     2.4%
                                14,003 systems
Weighted average annual percentage of UST systems and piping that experience an interstitial monitoring alarm. Assumes 20 percent of tanks and 18 percent of pipes use interstitial monitoring, and that three percent of tanks and 10 percent of pipes experience an alarm in a given year.
E[2], Incorporated, Task Order No. 3003, TDD #5, Tables 11 and 13.
Remove release detection deferral for emergency generator tanks
EGTs
                                     3.0%
                                17,339 systems
UST systems assumed to be emergency generator tanks.
Based on review of over 15 state databases and discussions with several state UST program representatives.
Other
Remove deferral for airport hydrant fuel distribution systems
AHFDSs
                                    100.0%
                                 81 facilities
All airport hydrant fuel distribution systems, including 71 DoD systems and 10 commercial airport systems.
Meeting with U.S. Department of Defense (DoD) in March 2013 and supplemental information provided to EPA in April 2013, plus information based on public comments and additional EPA research to identify commercial airport systems potentially affected. See Appendix A for additional information.
Remove deferral for UST systems with field-constructed tanks
FCTs
                                    100.0%
                                  346 systems
All UST systems with field-constructed tanks, including 334 DoD systems and 12 DoE systems.
Meeting with U.S. Department of Defense (DoD) in March 2013 and supplemental information provided to EPA in April 2013 and U.S. Department of Energy, "U.S. Department of Energy Underground Storage Tank (UST) Compliance Strategy Report," August 2006, p. A-32 to A-34. See Appendix A for additional information.
Require notification of ownership change
Facilities with Conventional UST systems and EGTs
                                     10.1%
                               21,505 facilities
Annual number of facilities that change ownership.
E[2], Incorporated, Task Order No. 3003, TDD #27.
Closure of lined tanks that cannot be repaired according to a code of practice
Conventional UST systems and EGTs
                                   <0.1%
                                  80 systems
Annual number of lined UST systems that cannot be repaired
E[2], Incorporated, Task Order No. 3003, TDD #17, Table 1 and E[2], Incorporated, Task Order No. 3003, TDD #5.
Requirements for demonstrating compatibility with fuels > E10 and > B20
Conventional UST systems and EGTs
                                     0.04%
                                  234 systems
0.4 percent of conventional UST systems and EGTs use fuels E >10 or B > 20, assume 10 percent can demonstrate compatibility