Many Florida gas station owners are worrying about the future of their businesses because of a state law that will go into effect on December 31, 2009. On that day, the law will require all gas station owners with single-wall underground fuel tanks and pipes to upgrade to double-wall tanks or stop selling gas. Industry insiders expect that of the state’s 9,200 gas stations, 800 to 1,500 stores will have to close. 3,156 gas stations and other facilities with underground storage tanks (USTs) in Florida require the upgrade.
Single wall steel tanks are prone to corrosion, especially when they contain highly caustic liquids such as fuel. With hundreds of thousands of leaking storage tanks buried underground throughout the country, identifying and removing the tanks has been a major initiative of the US Environmental Protection Agency and many state environmental agencies.
The cost of replacing the tanks, however, is extremely prohibitive – especially for the mom and pop operations. The average cost of replacing a single underground storage tank is $250,000. Gas stations with multiple tanks can expect a bill of about $400,000. Aside from the expense itself, the trouble for many small and independent gas station owners is acquiring financing for the job.
“Even banks that our stations have had a long relationship with are not going to loan them $250,000 for an asset that nobody can see,” said one gas station owner to the Orlando Sentinel, adding that in the bank’s eyes, the upgrade would not result in greater income.
The requirement has caused the value of older gas stations to plummet. Any new owners would have to replace the tanks before they could sell gas. If they chose not to sell gas, the new owners would still be liable for the old tanks. Federal law requires station owners to have a $1 million insurance policy. At the same time, many underwriters have stopped insuring stations with single-wall tanks, forcing some stations to stop selling gas or close their doors.
According to Mike Ashley of the Florida Department of Environmental Protection, gas station owners have had ample time to prepare for the big switch. He reminded all facilities requiring upgrades that the upgrade rules have been in effect since 1991 – ample time to prepare and comply.
Gas station owners hoping there might be a reprieve or extension of the Dec. 31 deadline are likely to be disappointed. The Florida Department of Environmental Protection has not granted an extension for upgrades since 1983, when it became one of the first states to establish UST regulations.
Even a very slow leak from a UST is an environmental hazard. Just one gallon of fuel will contaminate one million gallons of water and the surrounding soil, endangering the health of humans and wildlife.