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Time Short For Tank Upgrades

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By RUSSELL RAY, The Tampa Tribune

Published: February 5, 2008

TAMPA - An important deadline for Florida's gas stations is on the horizon, and state regulators expect it may put hundreds of store owners out of business.

Florida's Department of Environmental Protection estimates that about 10 percent of the state's 8,000 retail stations will fail to meet the Dec. 31, 2009, deadline to replace their underground fuel storage tanks with double-walled tanks and pipes, a requirement designed to protect the underground water supply from fuel leaks.

"If you're not in compliance at that time, you cannot pump gas the next day," said Pat Moricca, president of the Gasoline Retailers Association of Florida.

About 40 percent, or 3,200, of the state's gas stations have not complied. The deadline is less than two years away, but that's not much time considering it takes three to six months to get the new tanks and three to five weeks to do the work.

More importantly, the cost averages about $250,000, an expense many mom-and-pop stations can't afford. Profits from gasoline sales have always been thin for retailers, who earn only a few pennies per gallon of gas. Fuel is a tool to get customers inside the store, where the bulk of the station's profits are made.

Also, state and industry officials say there aren't nearly enough storage tanks or qualified contractors to the remaining work because too many store owners have waited too long to get started.

"You just can't get the remaining 3,000 locations done between now and the end of 2009," said Steve Miller, environmental manager for Clearwater-based Risser Oil Corp. Risser owns 45 area gas stations and has spent millions to comply with Florida's tank law. All but two of Risser's locations have been upgraded, Miller said.

"We've been working on it since 1992," he said.

A typical tank replacement takes three to five weeks to complete, Miller said. "The rule is not to be closed two weekends in a row," Miller said. "If you're closed two weekends in a row, you're going to lose most of your customers. It's a painful process."

As the deadline gets closer, the cost of equipment and construction will surge.

"A lot of dealers are going to go out of business because they don't have the money and the banks don't want to lend them the money," Moricca said. "I would say a good 10 percent of them or more are going to be out of business."

Law Seen As Overly Strict

Jim Smith, president and CEO of the Florida Petroleum Marketers and Convenience Store Association, said the Florida tank law is the most stringent in the nation.

"In many instances, it's overkill," Smith said.

The state required the industry to install single-wall corrosion-protected tanks by 1990. Many of those tanks are working and don't need to be replaced, Smith said.

Marshall Mott-Smith, who oversees storage tank regulation for the DEP, said he has seen tanks come out of the ground looking new while others look like Swiss cheese.

Small stations in rural Florida, where sales are low, will have the hardest time complying, Jim Smith said.

"They're not going to be able to do it," he said. "They're not going to be able to borrow money on the facility."

New Owners Unaware Of Rules

Failure to comply could occur on a larger scale because ownership of many Florida gas stations has changed hands in recent years, as oil companies shed their retail assets to focus on more profitable businesses such as refining and production. The new owners are often immigrants who are unaware of the requirement, Mott-Smith said.

"They're buying these stores often sight unseen and they're not doing their homework," he said.

"I get at least two or three calls a week from some new owner who's frantic because one of our inspectors has told them they have to replace their tanks. They feel deceived because the previous owner didn't tell them about it."

The requirement to have double-walled tanks and pipes by the end of 2009 was approved by state regulators in 1990 and applies to any facility that stores fuel, including power plants and police departments.

"We've tried to give industry time to plan and budget for this expense," Mott-Smith said. "It shouldn't have snuck up on anyone."

About 90 percent of Florida's water supply is underground and single-wall systems didn't offer enough protection against leaks and spills, Mott-Smith said. Since 1983, there have been more than 36,000 known leaks or spills from storage tanks in Florida.

Faulty pipes account for a quarter of the reported leaks. But a leaky pipe poses a bigger environmental hazard than a leaky tank because the pipe is under constant pressure from a fuel pump inside the tank.

"If you have a leak in the pipe, you're going to be squirting out hundreds of gallons of fuel in no time," Mott-Smith said.

The number of reported leaks and spills has plummeted from about 300 a month in the early 1990s to about 30 a month now, Mott-Smith said.

Effect On Prices Debated

The cost of upgrading Florida's gas stations will almost certainly be added to the already high price of gasoline, Moricca said.

"You give the oil companies any kind of excuse and they'll raise the price," he said.

But Miller, the environmental manager at Risser Oil, said construction costs will have little impact on gasoline prices and that competition from other retailers will continue to be the biggest factor.

"The only thing that really drives prices is the street," he said. "You're going to get whatever the street gives you."

Moricca said many gas station owners are expecting to get an extension. But DEP officials say no extensions will be granted unless the retailer has a signed contract to complete the work within 90 days after the deadline.

In Hillsborough County, most of the 1,324 facilities with fuel storage tanks have replaced their tanks. About 250 have not, said Monica Sylvain, manager of Hillsborough County's Storage Tank Compliance Department.

Reporter Russell Ray can be reached at (813) 259-7870 or rray@tampatrib.com.

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