This deadline applies to single-walled tanks and piping installed before May 8, 1985.  The most recent Rhode Island Underground Storage Tank Regulations, which were effective on April 21, 2011, actually extended the mandatory closure date by two years, to December 22, 2017.  (Previously, in regulations effective August 2007, the deadline was December 22, 2015.)

The 2011 regulations state:

Mandatory Deadline for Permanent Closure of Single-Walled UST Systems (Tanks and/or Piping): Except as provided in Rule 8.01, all existing tank and piping systems without secondary containment shall be permanently closed as follows:

(A) Single-walled tanks and/or piping installed prior to May 8, 1985 shall be permanently closed by December 22, 2017.

(B) Single-walled tanks and/or piping installed between May 8, 1985 and July 20, 1992 shall be permanently closed within thirty-two (32) years of the date of installation.

The exemption mentioned above (in Rule 8.01) refers to systems that store heating oil that is consumed on site for heating purposes.   As stated in the rule, single-walled tanks and piping installed after May 8, 1985, must be permanently closed within 32 years from install date.  

In order to permanently close a UST, the required steps of the regulations must be followed, which include submitting a closure application and application fees.  Generally, “permanent closure” will mean removal of the UST.   However, in certain instances, the agency may approve closure in place, rather than removal.  In order to get approval, an owner or operator would need to show that specific circumstances at the location would make the excavation involved with removal a poor choice.  For instance, if removal would compromise the integrity of a building or could negatively impact a sensitive environmental area, then the DEM may determine closure in place is the better option.

To read the full rule about the deadline for closure of single-walled systems, 8.04 of the UST regulations, follow this link:

http://www.dem.ri.gov/pubs/regs/regs/waste/ustreg11.pdf

- Megan Kazmierczak, Senior Compliance Manager

• Regulations
• single wall tanks
• UST removals
• Rhode Island
• Underground storage tanks

Are you aware that the first time since federal regulations regarding underground storage tanks (USTs) were first promulgated in 1988, the United States Environmental Protection Agency (EPA) is proposing significant changes and additions to these regulations?  The proposed rulemaking includes new requirements for USTs primarily focusing on proper operation and maintenance, training, additional release detection requirements and testing of secondary systems and spill prevention.

EPA’s intent for the new rulemaking revisions will allow for improved  detection and prevention of UST releases to the environment.

The proposed changes will be significant to the retail motor vehicle, commercial and manufacturing sectors who own and operate USTs if they become effective.

From a practical standpoint, owners and operators of tanks in the vast majority of states with approved UST programs may ultimately see changes in state regulations.

States currently operating under an approved UST program will have three years to submit a revised program approval package to conform to the new regulations. Therefore, if the proposed regulations become effective, owners and operators of USTs should monitor changes to state programs closely.

         If you would like to provide comments to EPA concerning these changes, you should submit right now.

         You can submit via www.regulations.gov and reference  Docket ID No. EPA-HQ-UST-2011-0301.

Frankly, I personally believe we’ve been long overdue (24 years!) for a change in the regulations. Given new technologies and types of  UST equipment, as well as fuels compatibilities issues and frankly a poor track record of monthly release detection to identify and allow for operators to react, investigate potential releases, the new rules will allow for “belt and suspenders” to the challenge of  preventing releases. Anyways, that’s my personally opinion. On the flip side, this will probably have an impact on your annual operating costs to your facility. One way to look at it though  is  that releases are very costly and another way to look at it is “an ounce of prevention is worth a pound of cure”.  Your facility is valuable. Why not protect it?

Here are the key elements of the new rules under proposal

A. Changes To Establish Federal Requirements For Operator Training And Secondary Containment

      1. Operator Training

     2. Secondary Containment

B. Additional Requirements For Operation And Maintenance

     1. Walkthrough Inspections

     2. Spill Prevention Equipment Tests

     3.  Overfill Prevention Equipment Tests

     4. Secondary Containment Tests

     5.  Operation And Maintenance Requirements For Release Detection Equipment

C. Addressing Deferrals

       1. Emergency Power Generator UST Systems

       2. Airport Hydrant Fuel Distribution Systems

       3. UST Systems With Field-Constructed Tanks

       4. Wastewater Treatment Tank Systems

       5. Maintain Deferral For USTs Containing Radioactive Material And Emergency Generator UST Systems At Nuclear Power Generation Facilities Regulated By The Nuclear Regulatory Commission

D. Other Changes

        1. Changes To Overfill Prevention Equipment Requirements

       2. Internal Linings That Fail The Periodic Lining Inspection And Cannot Be Repaired

       3. Notification Requirements

        4. Alternative Fuels And Compatibility

        5. Improving Repairs

       6. Phase Out Vapor Monitoring And Groundwater Monitoring As Release Detection Methods

       7. Interstitial Monitoring Results, Including Interstitial Alarms

-Joel Hershey, Director of Eclipse Services

• underground storage tanks
• tank regulations
• Regulations
• petroleum
• gas station tanks
• EPA
• UST Compliance

Currently the state owes more then $17 million dollars to businesses who have received approval to be reimbursed for cleanup costs, and more then $81.6 million worth of applications for reimbursement.  

Due to state cutbacks and troubling economic times the fund has lost much of its state funding.  "At current funding levels, most owners and operators will not receive reimbursement in their lifetime," James T. Owens III, director of the EPA's Office of Site Remediation and Restoration, wrote to state Environmental Protection officials. "Clearly, in its current condition, the use of the state fund as a means of financial responsibility does not encourage -- or in some cases enable -- releases to be addressed promptly."

January 26, 2012 the EPA sent a letter to Bureau of Water Protection and Land Reuse Chief Betsey Wingfield stating “EPA will begin the process of withdrawing approval of the CT DEEP Program state fund as a mechanism of financial responsibility should a solution not be achieved by the end of the legislative session on May 9, 2012.”

If the state can not find a solution by May 9^th and the EPA ends its recognition of the program, gas stations across the state will be forced to find private insurance, with the high costs these station owners  will be forced to raise prices or to close down completely.

 -Victoria DiBacco, Complaince Analyst

• EPA
• CT
• DEEP
• State Fund
• Cleanup Program
• Petroleum

Lorenzo DiBacco, Field Services Manager

• Inspection
• alarms
• sensors
• manways
• ATG

Perspective was lost in this situation.  The shear valve is essential for compliance and for protecting your business and the environment.  If a vehicle were to crash into a dispenser and sever the fuel line to the pump, a properly functioning shear valve would shut off the flow of fuel and prevent a major release.  This wrench will negate the purpose of the shear valve and allow product to gush out onto the site in the event of dispenser dislodgement.

Which would be a greater loss to your business:

            -A temporary shut off of one dispenser to repair the sticky shear valve,

                                    or

            -A collision with the dispenser causes a release, endangering customers and incurring thousands of dollars in clean up costs?

Bottom line: the equipment is there for a reason.  Make sure it is working.  Functioning compliance equipment is good for your business, good for your customers and good for the environment.

-Brian Yellan, Eclipse Trainer

• Shear Valve

As required, a method of monthly release detection must be in place for all new and existing UST systems.  However, in certain instances, inventory reconciliation can be temporarily used to meet the release detection requirements.

If the method of release detection becomes defective, the owner must immediately have the necessary repairs or maintenance performed.  While the repairs are performed, the owner may use inventory control or automatic tank gauging (in the case where interstitial monitoring is the method of release detection) for up to 60 days from the last passing result in order to meet the monthly release detection requirements.

Additionally, if the automatic tank gauging system (ATG) is found to be not defective but a monthly passing release detection result cannot be acquired from the ATG due to low product levels in the tank, the owner may use inventory control as an alternative method of release detection for up to 90 days after the last passing result.  Within that 90-day period, the owner is expected to schedule a fuel delivery in order bring the tank fuel level to the needed level.

To read the full rule – Release Detection Methods and Requirements for UST systems, follow this link:

http://codes.ohio.gov/oac/1301:7-9-07

-Megan Kazmierczak

Senior Compliance Manager

• release detection
• Ohio
• Inventory reconciliation
• automatic tank gauge
• ATG

The requirement for new vehicles in the USA to be equipped with On-board Refueling Vapor Recovery (ORVR) systems is leading to the elimination of Stage II Vapor Recovery requirements.   To explain briefly, Stage II systems capture gasoline vapor during vehicle fueling and return the emissions to the gasoline storage tank.  ORVR equipment also controls the release of hydrocarbon emissions during vehicle fueling by collecting the vapor into a canister in the vehicle.  Therefore, the amount of displaced gasoline vapors meant to be captured by Stage II Vapor Recovery systems is being eliminated as more vehicles equipped with ORVR replace older vehicles.  Additionally, the two systems are actually incompatible with each other since use of Stage II Vapor Recovery on a vehicle equipped with ORVR can actually cause more emissions to be released into the atmosphere. 

Therefore, states in the Northeastern US have begun using several EPA criteria to classify that ORVR is in “widespread use” throughout their state.  These states have begun to phase-out or discontinue the requirement for Stage II vapor recovery systems at gasoline dispensing facilities (GDFs).   The phase-out of Stage II vapor recovery is good news for GDF owners and operators because the Stage II systems can be complicated and require periodic testing and upkeep that is expensive.

The state of Connecticut is currently moving forward with steps to repeal their requirements (see Eclipse article dated January 3, 2012: http://www.ecseclipse.com/post-details/items/connecticut-moving-to-repeal-the-stage-ii-vapor-recovery-requirements.html). 

Other states have already amended their regulations to phase-out Stage II systems.  Here are details for some Northeastern US states that have regulations updated to allow discontinuing Stage II.

Chapter 118 of the state of Maine’s air rules was amended on April 3, 2011.  Stage II requirements have been repealed as of January 1, 2012.  GDFs with Stage II must discontinue the use of and/or remove the Stage II system by January 1, 2013, in compliance with Appendix A of Chapter 118.  Previous rule amendments allowed that new facilities constructed on or after June 30, 2008 and facilities that exceeded the throughput requirements which would have made them subject to Stage II after January 1, 2008, did not need to install Stage II systems. 

In New Hampshire, changes to Env-Wm 1404.17 were effective on November 29, 2011.  New facilities constructed after January 1, 2012 or facilities where Stage II equipment had not already been installed, are no longer required to install Stage II systems.  Stage II systems can be decommissioned starting after January 1, 2012, and must be decommissioned by December 22, 2015. 

The state of Vermont enacted a law in 2009 (10 V.S.A. 583) that authorizes the phase-out of Stage II systems.  New facilities that began operation after May 1, 2009 and facilities that did not exceed the throughput threshold (requiring Stage II installation) before the 2009 calendar year were not required to install Stage II systems.   Owners or operators can discontinue the use of their Stage II systems after January 1, 2013.   The systems must then be properly decommissioned by January 1, 2015, although the DEC encourages decommissioning to be done immediately after discontinuing the system.  Early phase-out is allowed, but only in the cases where “significant excavation” is done or if all gasoline dispensers are replaced with dispensers that support triple data encryption standard usage to comply with payment card industry standards.  Agency approval is required for early phase-out.

The state of New York has not yet repealed their Stage II requirements.  However, the DEC issued a directive stating that the agency will use discretion in enforcement and will not issue violations for failure to comply with Stage II requirements at gasoline dispensing facilities that did not have a Stage II system prior to January 1, 2011 but were subject to the requirements after that date or for facilities that decommission their existing Stage II system after January 1, 2011 by following the procedure in Appendix A of the agency’s directive.

In order to decommission a Stage II system in one of these states, you must follow the state’s required procedures and approved methods.   Generally, the agencies require advance notice or request for permission to decommission.  Testing will be required and the Stage II piping is usually disconnected from the tank.  The Stage II equipment, such as hanging hardware and pressure vacuum caps, must be replaced.  The final step usually involves notification and/or submitting test reports to the agency.

Something to remember is that once a facility’s Stage II system has been decommissioned, gasoline dispensing facilities would then be subject to the federal National Emissions Standards for Hazardous Air Pollutants (NESHAP) - 40 CFR Part 63, Subpart CCCCCC.   There would be additional equipment and sometimes testing requirements (dependent on gasoline throughput) associated with this regulation.

For more information, visit the following links:

ME: http://www.maine.gov/dep/air/rules/index.html  (Chapter 118)

NH: http://des.nh.gov/organization/commissioner/legal/rulemaking/documents/env-wm1404.17as-amd.pdf

VT: http://www.anr.state.vt.us/air/Compliance/htm/Gasoline.htm

NY: http://www.dec.ny.gov/regulations/74990.html

- Megan Kazmierczak

Senior Compliance Manager

• Stage II Vapor Recovery
• Decommissioning
• Regulations

Organization is a key factor. Keeping your records organized, in chronological order and accessible goes a long way towards avoiding any fines. Typically if an inspector views the condition of the record keeping of release detection records as indicated by the photo, he will more apt to be dissatisfied and become increasingly critical during his inspection. This could potentially lead to NOV’s and fines. This is a common compliance issue that is a fairly easy fix.

There are many ways to do this. One is to place the monthly/weekly printouts in an envelope in chronological order by calendar year and save them in an accessible area for inspections. Another method that I was extremely impressed with was a retailer had purchased a three ring binder. The binder was clearly marked “Release Detection Records” Inside the 3 ring binder were collector card sleeves like the ones used to collect baseball cards. These clear plastic 3 ring sleeves each had 12 pouches that were used to hold the monthly release detection printouts by month. Each sleeve pouch was marked with month and year. And the 3 ring binder held 5 sleeves for the last 5 years. This doesn’t have to be your method, but you get the picture. Organization of record keeping is an easy way to avoid fines.

Third party management with remote monitoring of the automatic tank gauging systems is just one of ECS/eclipse’s specialties. We can take the headaches away. Please call for more information.

-Lorenzo DiBacco

Field Services Manager

• Organization
• NOV's
• inspections
• compliance audits
• Compliance

-Brian Yellan, Eclipse Trainer

• Ethanol

Controlling these emissions has been an issue for all stakeholders involved in the reduction of ozone and the production and dispensing of gasoline since the late 1980s. VOC and HAP emissions occur from two types of sources at GDF: Stage I and Stage II processes. Stage I refers to processes at GDF when the gasoline is delivered or transferred from the tanker truck to the underground storage tank (UST).  Stage II refers to processes at a GDF when the gasoline is delivered or transferred from the UST to the vehicle fuel tank. Emissions from Stage II processes are the focus of this article.  Stage I processes are mentioned only for clarity. Emissions from GDF are a nationwide problem, and gasoline use in vehicles and trucks is increasing annually however there has been a fundamental movement to eliminate the requirements for Stage II regulations. The reason is that the automotive manufacturers have been installing an  on-board refueling vapor recovery (ORVR) canisters for over a decade, (ORVR will be used forward in this article).  Basically the ORVR system in essence reclaims the vapor emission during the vehicle fueling process, negating the need for the complex and costly Stage II equipment at GDFs.

Eventually, given enough vehicles in use in the United States equipped with ORVR, technically Stage II equipment at the GDF is no longer required. In fact, continuing to have Stage II equipment during the fueling process for vehicles that have ORVR can actually CREATE and exasperate the emissions problem. CARB (California Air Resource Bureau) predicts that, as a result of ORVR/vacuum assist system incompatibility, “up to 35% efficiency loss could occur [in assist system control efficiency] based on theoretical calculations.”

The Clean Air Act (CAA) Section 202 (a) (6) states, with respect to ORVR requirements, “The requirements of Section 7511a (b) (3) of this title (relating to Stage II gasoline vapor recovery) for areas classified under Section 7511 of this title as moderate for ozone shall not apply after promulgation of such standards…”

The general interpretation of this is to indicate that states with Stage II programs in Moderate ozone nonattainment areas, as well as Marginal and attainment areas in the Ozone Transport Region (OTR), may begin to phase out their Stage II programs. The Northeast states are beginning to feel pressure to repeal their Stage II programs, as in the state of Maine, which essentially has begun the process of Stage II phase out process quite some time ago  as well as other states.

According to CAA Section 202 (a) (6), the EPA Administrator may repeal the federal requirement mandating Stage II vapor recovery programs upon determination that vehicles equipped with ORVR systems are in “widespread use.”

On the question to the definition of “widespread use,” the EPA took a position as a guidance to all States that such a determination would be based on “the percentage of the automobile fleet equipped with ORVR.”  To most industry stakeholders, this suggested that “widespread use” would occur when ORVR achieves emissions reductions on a one-to-one basis when compared to Stage II.  For heavily populated areas  with strong economic “engines” such as the Northeast, that time is already here.

Connecticut is now one of the Northeast states moving forward to establish a phase out of Stage II requirements  however they are potentially looking to “beef up” the Stage I requirements but I question why……….As far as Stage I,  I’m surprised CT would even pursue tougher standards given already a pretty tough federal standards under

 National Emissions Standard for Hazardous Air Pollutants (NESHAP), Subpart CCCCCC

Traditionally Connecticut moves relatively slowly as it relates to reg. changes but there is a keen interest by the impacted stakeholders, namely the owner/operators in CT wishing to see this come to pass quickly.

 - Joel Hershey, Director

• Stage II Vapor Recovery
• Regulations
• Connecticut

• secondary containment
• Regulations
• operator training
• EPA

As per the Federal requirements under the Grant Guidelines that implement 42 U.S.C. and as amended by Section 1524 of the Energy Act of 2005, Effective August 8, 2012 no person shall own or operate a UST system without a designated trained and certified Class A, Class B, and Class C operator for the UST system.

MADEP approach to implementing these regulations, is to require that all Class A and B UST operator be required to take and pass  an online  examination. This approach fundamentally differs from most other state’s approach, whereby the majority of states  approach this requirement by implementing a  UST training program.

The MADEP online examination process works by a Class A or B  taking the examination and when passing,  demonstrates full knowledge of both the federal and state requirements for proper and safe operations of the UST system.

Once passing, the individual is issued a certificate attesting that they have been properly trained and possess the  knowledge and understanding of UST systems and Massachusetts UST program requirements. In the future, if the MADEP determines that your facility is out of compliance, they will probably require the Class and B operator of the facility  to retake and pass the examination as part of returning back to compliance.

As it stands to date, the online examination will be available by sometime in January of 2012. From the information we’ve  received from individuals who were selected to participate in the beta testing, this is one tough examination to pass. An individual has to receive at least an 85% grade to pass and receive the certificate. The subject matter will take into consideration the following areas of UST operations.

1.       Tanks and Piping

2.       Regulated substances stored

3.       Leak detection

4.       Spill prevention

5.       Overfill prevention

6.       Corrosion Protection

7.       Emergency response procedures

8.       Product compatibility

9.       Financial Responsibility

10.   Registrations, Licenses and Permits

11.   Reporting and Recordkeeping

12.   UST testing requirements

13.   Temporary and permanent closures

14.   Class A, B, and C qualifications and requirements

15.   Understanding of 527 CMR regulations

The results of the beta examination testing has indicated that the majority of the people failed in the examination. Not surprising given the indept nature of the subject matter.

We feel that the overwhelming majority of people  tagged to be an Class A or B operator (roughly 5,000 individuals) will  need to have some level of prior training and refreshers to be able to pass the examination.

ECS Eclipse can help  train you  (and your staff) to be prepared  to master this tough  examination.

We are experts in UST compliance with over 35 years of experience in UST operations.

We provide both online and classroom training to UST operators.

Contact us and be sure to be prepared for your states training requirements.

• Operator Training
• Massachusetts

• Spill Bucket

• UST Compliance

You’re planning to buy a gas station.  From the outside, it appears to be in good shape with no potential issues. Right? Wrong.  If it’s been operating for a period of time, chances are there will be underground contamination. Even with over 20 years of ever-tightening regulatory release detection and compliance requirements around proper tank operation, there will be spills and releases. It’s a basic fact.

From a business acquisition perspective, it is extremely important to understand just how much routine background contamination exists vs. contamination at the station due to major unreported or undisclosed releases. Both the buyer and seller have liabilities after that transaction from an environmental perspective.

Environmental Assessments – Get One

Most gas stations that are bought and sold will likely have an environmental assessment (EA) performed. The primary reason an EA gets performed is that the bank requires it prior to financing the purchase. Even then, not all EA’s are created equal. Often times the level of due diligence a bank requires may fall short in determining the true level of contamination present at the site. Regardless, this needs to be put into perspective. You may not want to spend more for an EA to identify a cleanup that costs less than the cost of the EA, but on the same note, it doesn’t make sense to spend only  $6,000.00 for a simple EA when buying a $1,000,000 or more for a  gas/convenience store. Just how much is spent on the environmental and property assessments should be dictated by numerous factors including, but not limited to,  the age of the UST system, its compliance history, the level of testing and release detection history and the type of release prevention equipment in place.

When a Release Happens

As a general rule, most releases will often be generally in two places:  around the spill bucket tank pad area and under the fueling dispensers. Confirming the presence of dispenser pans, spill buckets and the integrity of these devices are key in establishing the potential for possible high levels of contaminations.

It’s well known in the industry that spill buckets are prone to fail, sometimes within a few years of installation. This is especially true in areas prone to inclement weather, including frost heaves. For older stations, factor in that most spill buckets are likely to be as old as the UST system itself. Currently only a handful of states require this testing and even then only recently.

Tanks and piping are not the primary sources of ongoing problems that substantially continue to add levels of contamination at a station. It’s the cumulative effect of small releases that can ultimately create environmental problems.

You might not have a catastrophic tank or piping failure that has gone undetected however this is rare as most stations are performing some level of inventory control and release detection. Regardless, the whole system should be tested for “tightness”.

As important as all of this is to the buyer, this is also pertinent from a seller’s perspective. The seller needs to think about the nature of equipment and operating practices, being realistic and factoring in the value of the property from an environmental impact perspective. Often, prices for properties do not accurately reflect its true value.  As a result, the seller is either unrealistically high on the asking price or leaves money on the table having underestimated the integrity and value of the overall fueling system.

Any seller demonstrating strict adherence to compliance requirements, including proper record retention and high level of due diligence, will often get a better selling price.

In general, it’s good business practice to fully disclose adequate representation of the environmental status on the property. This includes all of the testing and adherence to compliance requirements stated above. This way, there will be minimal liability for both the buyer and the seller in the future. If not, there can often be legal issues after the property transaction if proper due diligence was not performed on either end. The state that the gas station is located in may have a cleanup fund that the site could be eligible for. Some states have up to $1.5 million in cleanup funds (per incident) available to gas station owners who can demonstrate that they are in compliance with all regulatory requirements. This can add greatly to the value of the property.

Another issue is a lack of concern around proper fueling system compliance to prevent and minimize leaks and releases to the environment.

Paying attention to fill operations, ensuring that any spill and overfill prevention devices are functioning properly and liquid tight is vital. Spill bucket testing is often the least costly testing, sometimes priced under $50, quite an affordable form of insurance.

Another important component is the dispenser. With new ethanol blends being introduced across the country, and increased pressure from government to introduce higher levels of ethanol in gasoline, there will be an increase in problems around the fueling dispenser. Let’s face it, ethanol is corrosive on soft metals in most dispensers and gaskets and o-rings haven’t been tested for long-term effects. Only since 2007 have major dispenser manufacturers received UL approval for dispensers in production to be compatible for E10 with E15 following in 2010.
Prior to this, there was no guarantee that fueling dispensers could withstand the long-term effects of ethanol on those unproven components in legacy dispensers.

If there isn’t a dispenser pan to catch leaks as well as an electronic sensor for notification of a problem via alarms , one of the best preventive measures is to  routinely take off the dispenser skirt and take a look to see if there is a problem. Once a month may not be too often.

1.    The following is a list of common mistakes seen in most gas station acquisitions and divestments. The buyer and seller do not adequately perform the right types of environmental due diligence.
2.    The expectations of contamination are unrealistic. Any gas station that has been in operation for a period of time will not still be at virgin background levels.
3.    Due diligence data is not used effectively to negotiate the sales and purchase of the property.
4.    Complete integrity testing of the fueling system is not performed. This includes the secondary containment areas of the fueling system.
5.    Not asking for complete operational permits, licenses, registrations, testing history, maintenance records prior to the sale. By law either the current or new owner must be able to show regulators all above paperwork for up to the life of the system. This can heavily affect any state fund reimbursement status going forward.
6.    Get construction “As Builds”’. Showing proper equipment and installation practices adds value to the property.
7.    Not adequately determining the value of the fueling system. A fueling system that’s seven years old is worth much more than a fueling system that’s 20-25 years old. Many states are establishing a life expectancy of tanks systems and that age can be around 30 years old.  To replace a typical three tank system from tank to the tip of the nozzle may cost anywhere from $350,000 to $500,000.. I’m often amazed at how buyers (and sellers) don’t seem to realistically appraise and value the property based around fueling system age and type of construction and release preventative equipment.
8.    Not taking release detection measures. After the purchase, pay attention to release detection measures. There are now third party service providers who have the expertise and the ability to monitor your fueling system on a 24 x7 basis to protect your investment.

• UST
• Tightness Testing
• Spill Bucket
• Selling Station
• Gas Station
• Fuel Spill
• Cleanup Fund
• Buying Station
• buying a convenience store
• Selling a convenience store

What is an ATG and what is its purpose? To simplify, an ATG is a system with probes and sensors put in place to quickly identify leaks and to prevent significant impacts to the environment.

Being the owner and/or operator of an underground storage tank system you have a vested interest on the impact a leaking tank can have on the environment. Costly cleanups, liability, notices of violation (NOV’s), impacts to the environment and impacts to your business all can play a role if product is released. If you do not understand your automatic tank gauge and its function and purpose, you risk that scenario.

If you do not already know how to properly maintain and operate your ATG, insist that your service provider, installer or consultant properly train you. Have them provide clear, concise instructions on the proper operation and maintenance of your system including what is required for weekly / monthly and annual compliance. Familiarize yourself with the requirements for documentation of the required weekly / monthly and annual reports. Keep these records readily available for any inspector upon request.

This may sound real obvious, but make sure your ATG is turned on at all times. I have been to many locations where the store was not 24 hours and would close at 10pm. The attendants / operators at closing time were shutting the power breaker off to the ATG system. When the ATG system is turned off it cannot monitor the tank system.

Don’t ignore an alarm. Ignoring an alarm defeats the purpose of having the ATG system to begin with. Plus you are federally required through the regulations to maintain leak detection. The earlier you can identify a leak the less costly it becomes. Document the alarm condition and the response actions and service performed and report the alarm condition to the appropriate authority if required. It is highly recommended that you immediately investigate and confirm all suspected leaks. Some states require this notification. When in doubt, report it. Many NOV’s have been issued by inspectors from regulatory agencies for failure to report a potential release to the environment.

Maintain the ATG system. Most states require that maintenance be performed following the manufacturers recommendations. Some states and jurisdictions require full functionality tests be performed. I personally prefer a full functionality of the ATG be performed on an annual basis as a preventative measure. Some ATG manufactures take the stance that the system self diagnosis itself and will let you know when it is not working properly. Although that statement in itself is correct, it does not take into account the human factor. I have been to many locations over the years to perform service on systems and found that although a sensor reads normal it does not go into alarm when an alarm is simulated. In some of these cases, I found that the programming was set up incorrectly and needed to be programmed properly. In the cases of Double Wall tank systems if the interstitial sensor is not programmed properly and not alarming, then you run the risk of a potential leak going undetected. During these annual inspections the maintenance personnel can also identify areas of service that may need to be performed to keep the ATG system running smoothly. Examples include replacing corroded ATG caps, sensor and wiring issues.

Put the responsibility of overseeing the ATG system with a competent person. Whether that is yourself or one of your employees, make sure that the system and its functions are understood. Verify that all your on-site employees are aware of the ATG system and at the very least, know what it does and who to notify when an alarm occurs.

• interstitial monitoring
• ATG
• Automatic tank gauge

Aug 1, 2010 12:00 PM, By Wendy Leavitt | director of editorial development

The Los Angeles Sheriff’s Department recently wrapped up a three-year investigation into a credit card fraud and identity theft ring that was using “skimmers”–electronic devices covertly installed over the card slots on ATM machines and other card readers–to capture credit and debit card information, including PIN codes, at a number of computerized gas station pumps. The skimming devices stored the card information until downloaded by the thieves and re-encoded onto the magnetic strips of other cards. The criminals were then able to use the stolen card numbers–of which they had over 10,000 when arrested–to make purchases. Los Angeles authorities arrested three people in connection with the fraud ring and seized luxury vehicles as well as $40,000 in cash.

• credit card

Just as other retail stores inventory their items, gas stations must inventory their stock, which happens to be thousands of gallons of petroleum that are stored below your feet. Since our product is underground, we can’t simply walk down the aisles and count all the cereal boxes as someone accounting for items in a grocery store might do. Nope, our inventory takes a little more imagination and maybe a little more math as well, so grab yourself a calculator!

Below is a typical data collection table for someone needing to inventory their petroleum. Let’s assume it’s the beginning of the first shift of the day, let’s fill out the data together.

It starts off easy, Day/Date: simple enough, figure out what day it is and write it in the box. Column one is done! On to column two, Open physical (gallons): This is when we walk over to the Automatic Tank Gauge (from here on called an ATG) and ask it to tell us how many gallons of product are currently in the tank, write this in column two. OK good! Now you can carry on with your day and we’ll meet back just before you leave.

* * *

Well hello, it must almost be time for you to leave- but not yet, we have important data to collect! As you can see, column three is Delivery: Did you receive a delivery today? If not, cross out this box, if so, write in the number of gallons that were supposedly added to the tank. It must be noted that this is one point of potential error. Since we can’t see the tank we can only assume that the delivery person delivered the amount he claimed he did. If he delivered less, our calculation will be off, if he delivered more, guess what- our calculation will still be off (More on this later).

Time for column number four- get ready to run, Close physical (gallons), this is again going to the ATG and recording the amount of gallons that are now in the tank, but before you do this, get ready to read the point of sale for today. Why did I tell you to run? Well, because in order to get an accurate representation of the inventory, you need to record the amount of gallons in the tank at the same time you record the amount of gallons you sold taken from the point of sale. This will be written in column six Meter Sales (gallons). If time passes in between the two readings then it’s likely that your calculations will be off- (potential point of error #2). If customers are pumping gas in the time it takes you to walk from the ATG to getting around to checking the point of sale, then the gallons those customers removed from the tank will only be recorded in your notes as the point of sale, and not accounted for in the ATG volume data you recorded before they started pumping. It will seem like you sold more gallons than the number of gallons you recorded as missing from the tank, therefore… run! And on your way back, grab a calculator.

Now its time to do some math (potential point of error #3); column five, Physical sales (gallons) means you are going to calculate how many gallons you sold instead of reading what the point of sales said you sold. To do this, take column one, the amount of gallons you started with, and subtract column three, the amount of gallons you ended with. This will give you the amount of gallons that are missing. If you took a delivery this day, add that amount, column two, to this number. Once you are done carefully crunching numbers on your calculator, write the answer in column five.

Now let’s step back and look at the table, in a perfect world, column six (Meter Sales) and column five (Physical Sales) would be the same number because you should have sold the same number of gallons that are now missing from the tank. Not the case? Don’t worry-That’s why we have column seven! Because of all the potential errors embedded into our tricky inventory and because gasoline is temperature sensitive, it is assumed that the calculation will be a little off.

Column seven is Daily Change. For this we need to do more math (sorry). Subtract column five from column six and write the difference whether it’s positive or negative, in column seven. This last column shows us the difference between the amount of gallons sold, and the amount of gallons that are actually missing from the tank. A positive number means you technically sold more gallons than the amount that is missing, a negative number means you didn’t get paid for every gallon of gas that is missing from the tank. Hmm, not good.

Though both a negative and a positive number is not a good sign of accurate inventory, having a negative number (not accounting for missing gallons) may mean you have bigger problems, such as a leaking tank, a dishonest delivery, un-calibrated dispensers, or petroleum theft. These problems can’t be determined through one day’s reading, which is why you must do this fun calculation everyday!

Potential Sources of Reconciliation Variance:

Inaccurate Delivery

Not Recording Close physical and Meter sales at the same time

Inaccurate Math calculations

Theft

Leak

Dispenser drift

UST test taking that day

Depending on what state you live in, after 7, 10, or 30 days you need to add up (reconcile) your column sevens and determine the percent variance from either the tank’s gallon capacity, or the total amount of gallons the point of sale recorded (adding all column sixes : Meter sales). No matter what state you are in, there is not much room for error.

To help you avoid this confusion and to give you a clearer view of how many gallons are really in your tank and how many gallons are sold or truly lost, you can pass this analysis on to a device that was designed specifically to do this. What is it you ask? It’s called AIR, Automated inventory reconciliation. The “Automated” part, soon to be your favorite, takes the human element out of equation, and analyses and automatically collects the data for you. Where can you find such a beautiful thing? Right here: AIR.

Let us save you from your headache!

Class dismissed.

The setting of this tragic story is a retail gas station and convenience store nestled in a mid-sized New England city. The operator of the facility was a commissioned agent working for a petroleum marketer who owns in excess of 200 stores. The theft events took place over a period of several months in 2008. The discrepancy in gasoline was first recognized at the corporate accounting level. The first response was to emphasize to the commissioned agent the need to do his paperwork correctly. The issue, in fact, had little to do with paperwork accuracy and a lot more to do with a dishonest operator who would place a gasoline dispenser in “stand alone” mode.

When this particular operator was working alone at this site, he would place one of the six dispensers in stand alone mode and tape a sign on the dispenser that read “Cash Only.” As patrons pulled up to the dispenser, they would either move on to the next dispenser to use their credit card or step into the store and give the attendant a ten or a twenty to make their gasoline purchase. With the dispenser in stand alone mode, the volume of gasoline dispensed would not be captured by the point of sale system and the attendant would pocket the cash paid by the patron. At the end of his shift, the cash register would not be short and his larceny would go unnoticed.

Unnoticed, until the gasoline inventory is reconciled, that is.

Historically, the accuracy of the inventory reconciliation from this particular site was mediocre at best. Typical composite sheets had very large swings from day to day. Sometimes sales closings were not always coordinated with daily inventory readings. Manual entries were not always legible and math errors were frequent. Corporate accounting initially thought the issue was one of sloppy paperwork. They invested time to correct the supposed issues and waited for the monthly composite sheets to come in. The shortage issue remained.

With the losses still appearing on the monthly composite sheets, the petroleum marketer suspected the hauler of not delivering the entire product promised on the bills of laden. The hauler was subsequently changed, but over time, the issue persisted. A leak in the Underground Storage Tank (UST) system was suspected and testing was contracted. All the testing passed.

Time (and money) was passing this petroleum marketer by while they attempted to find the source of their loss. An historic tolerance within the company for inaccurate reconciliation masked the true source of the gasoline shortages, employee theft. More accurate inventory reconciliation and prompt analysis would have identified the product theft immediately.

Eventually suspicion was placed on the site operator as the culprit for the loss of inventory. An unannounced visit by the Area Sales Manager (ASM) unveiled the “cash only” sign and the operator’s scheme. The ASM contacted the police and the operator was arrested on the spot.

Unfortunately, several months had passed and $80,000 worth of product was stolen before the culprit was caught. Regrettably, this story has an even sadder ending. After his arrest, the operator posted $1,500 bond and was released while he awaited trial. The operator fled the jurisdiction and returned to the “old country” before any restitution could be imposed.

Proper inventory reconciliation cannot directly stop theft, but it is a formidable deterrent. If an operator realizes he will be discovered immediately, he is considerably less likely to attempt the theft. This is the reason clerks do not simply help themselves to a stack of twenties from the register drawer. At a minimum, proper reconciliation practices will identify a problem early, before it grows to the magnitude of this true story.

• inventory reconciliation

Retainers are always a good idea to collect on any project you are working on. Retainers benefit the client and the vendor: the client knows the actual cost of the project, and they know it can't go over that amount; the vendor gets the money up front so they don't have to worry about tracking down payment when the project is complete. Since the economy isn't doing well, this is the time where the collection of retainers should be a priority. You never know if a company is going to diminish these days. If this happens, you most likely will not get paid for the services you performed. With the collection of retainers your company secures the payment, and can work on completing the job within the scope of the retainer.

The Energy Information Administration report for January shows Gasoline demand fell 330,000 b/d to 8.74 million b/d.

This got me thinking about the vertical “visibility” or lack thereof of the whole supply chain.

As larger Legacy Oil Companies (Exxon Mobil, BP, Motiva, etc) sell off their Retail Gasoline Stations, I think an unexpected consequence is a “loss of visibility” of inventory, and often times, requires carrying of additional inventories at the retail sites to best serve customers and avoid costly “Run Outs”.

A better forecasting and real time transparency of the inventories at the retail sites would provide for optimum distribution business model.

The only real way to improve the “visibility” in such a non-integrated distribution model is to treat it and act as if in fact it is fully integrated. The way to do this is through enabling of technology.

The way to implement this is through sharing of information of parties throughout the “distribution chain”, Both upstream as possible as well as downstream…all the way to the tip of the fuel nozzle.

This type of synergy created will allow the whole logistical components to be stronger and better serve all the sum of its parts. While providing for real time transparency for inventory levels, just in time deliveries , predictable models and reasonably priced supply contracts will be the fundamental components of a strong vertical, integrated chain, and depending upon where your organizations sits in this chain, one should be able to maximize the value of the real time data to better position one’s company from its peers. Upstream business can be at a more strategic level while at the micro level, (the corner gas station), can now wield information which ultimately can add a few more percentage of margins to their petroleum consumption/retail operations.

According to him, at one of his other sites where there is an outside ATM kiosk, he has seen up to over 6,000 TRANSACTIONS in a months period. That’s a lot for a Gasoline Convenience Store.

He’s thinking something like this can generate a lot more traffic to his sites.

Eclipse is doing the evaluation and implementation with the Local Regulators as to permitting and approvals.

As far as we are aware, no one else has taken this approach with ATMs in the fueling area.

If you have any thoughts or opinions on this, drop us a note!

We’ll keep you posted with the progress.

So why is inventory so difficult to track? One would think it’s just simple math, correct? The reality is, for many reasons, it’s not that simple. When exploring the typical methods for tracking gasoline, we can find several challenges in obtaining good inventory information.

Beginning with the data acquisition, many marketers determine how much product they have in their current inventory by sticking or gauging their tanks. In many organizations, this is typically done by the store clerk, who “sticks” the tank daily with a dipstick and hopes the readings are accurate because he or she is using a good stick and is consistently reading to within 1/8 of an inch for recording purposes. If, however, the stick is slightly bent from one reading to the other, a discrepancy will occur. Factor in the possibility of different store personnel performing this task, inclement weather (have you ever tried to stick a tank when it’s raining out?), or the possible use of the wrong tanks charts and you are left with the start of a problem which contributes to the slippery slope of inaccurate inventory measurement

Other marketers may be using an existing automatic tank gauge (ATG) for determining inventory levels which may “fix” some of the problems associated with “tank sticking.” However, it is possible that accuracy of inventory readings may be impacted by tank tilt or poor programming of the gauge. Also, in many cases, the $10,000 ATG on the wall is probably the least well-utilized investment on site. Most marketers are using it to record minimal data but primarily rely on the store clerk who is left to interface with, record, analyze and then transmit valuable data to a central office. The challenge of collecting this data from various locations and then transmitting this data is often cumbersome, time consuming, inefficient, and at times not very accurate. Most operators currently rely on the store clerk to reconcile the inventory and they only do it because it is part of the regulatory requirement for release detection.

Even with all the challenges just cited, the concept “it’s just simple math” has a place in the process. Just be cautious. Begin by recording the opening inventory, deliveries, sales or throughput of product, and then identify your closing inventory reading. Complete the reconciliation process of comparing “book” inventory to “actual” inventory. It appears to be simple, but more than likely if you were to visit 100 stores, you may find that many of them would have incomplete and inaccurate reconciled reports exceeding the state allowable variance for Inventory Reconciliation (IR). In some states, the threshold is as low as ½ of one percent of throughput per recording time period. In fact in one state, this reconciliation is required every 7 days.

Why is my Reconciliation not matching?

There usually isn’t just one answer to that question. Below are real case examples encountered after performing hundreds of site visits.

1. A surprising number of store managers and clerks didn’t really know how to do it.

2. Some of the store staff were complacent and just didn’t do it (infrequently find some never doing it).

3. Poor math skills.

4. Staff was using a bad stick

5. Staff was using the wrong tank chart.

6. Deliveries were recorded incorrectly.

7. Inventory data was not being read (closing readings and throughput) at the same time of day. This is very important for correct reconciliation.

8. Confusion of using Gross delivery vs. Net delivery (to be discussed).

9. Staff was using the incorrect forms (typically in the United States, you may be required to perform weekly, 10 day, or monthly reconciliation).

10. Blended systems with manifolded tanks skewed the data.

11. Some clerks were unsure of the allowable variance thresholds.

12. The reports were lost and could not be found.

13. On many occasions, the reports just sit in the store. They are typically not reviewed by management authorized to make meaningful business decisions.

What do irreconcilable differences mean to you?

Assume gasoline is priced at around $3.00 and diesel is selling for around $3.50 per gallon. In some cases, a gas station may be holding as much as $100,000.00 of petroleum inventory. The staff has done the math and reconciled the data but the inventory is still showing a variance exceeding the state allowable. Additionally, from a financial perspective, this is costly. Some states allow 1% gross plus 130 gallons. If you’re running a store with a throughput of 150,000 gallons a month, you are “allowed” an unaccounted for variance of 1,630 gallons. In economic terms, that equates to $4,890.00 per month. That would cover the salaries of two clerks at the site.

By way of another example, consider that you are operating in a tightly regulated state and the allowable variance on your inventory is ½ of 1%. You have “regular” gasoline showing a 442 gallon shortage and you’re allowed 119 gallons variance. The inventory is missing 323 gallons. To reconcile, the clerk will check the math and determine if everything adds up correctly. The clerk will look at the delivery ticket and normally use the gross gallonage for delivery. However, this time they see that the NET delivery is actually 326 gallons less. By using the NET numbers the problem has now disappeared.

Human nature is that most people want to make problems go away. Finding the numbers through a process that can “make it work” is a shortcut that happens and leads to real problems.

So what really happened?

There could be many reasons for shortages, and any of the following are suspect:

• Bad calibration (Meter Drift) of the dispenser meters (in essence giving away 200 to 300 gallons of gasoline to the motoring public). Dispenser calibration is usually performed by Weights and Measures and the standards are established by regulators for meters to be within plus or minus 6 cubic inches per gallon dispensed. There are 231 cubic inches of volume in a gallon of gasoline. Given the tolerance resolution mandated by government and meeting certification, a station selling 100,00 gallons per month could be giving away over 500 gallons of gasoline and STILL BE IN TOLERANCE. This happens more often than people realize.
• Bad stick readings.
• Inaccurately captured sales data from the POS or totalizers.
• Use of wrong chart numbers from another tank.
• Sloppiness.
• Wrong tank chart.
• Leaking UST system.
• Distraction with other duties.
• Theft.

What really happened in the second example was that the delivery tanker planned to drop 6,700 gallons of product, but realized he couldn’t force any more in the tank. He was then told to bring the extra 211 gallons to another store but no one else was aware of that (by the way, if the central office or if someone ordering and scheduling deliveries had accurate, up-to-date site inventory and delivery information, this probably would not have happened).

In this case, the product was just delivered to another site. But what if you didn’t own the other site? As a solution, what if someone could provide an integrated system that could automate your manual processes by electronically capturing the tank inventory, sales throughput, deliveries and aggregate all your sites under one program? You would no longer be subject to the many variables that currently affect inventory management practices. Having the right information to make good decisions regarding the most precious aspect of your business- inventory- is critical to maintaining your profitability and regulatory compliance. ECS has developed an innovative product called eclipse AIR Fuel System Management that can help you do just that. Joel Hershey, Product Manager for eclipse can be reached at 1-800-789-3530 to provide you more insight on how to better manage your inventory.