Regulatory Changes Affecting Marina Fueling Stations

2018-03-22T12:58:59+00:00 August 11th, 2016, 05:00am|

Article by Jonathan Sowder, Project Scientist at Superior Environmental Corp, as it appeared in the 2nd Quarter 2016 issue of Marine Trade News from Michigan Boating Industries Association.

 

Although it is very convenient for boaters to refill their gas tanks at the marina dock, there exists a certain amount of liability for the marinas that sell the fuel. A lot of work and infrastructure goes into storage and dispensing fuel, and even with the best intentions, sometimes the underground storage tanks (USTs) systems that hold the fuel leak.

This article focuses on two recent changes to Michigan regulations affecting marina UST owners and operators (O/O): a new state sponsored Financial Responsibility fund and new guidance on closing past releases.

New State Sponsored Financial Responsibility Fund
Michigan regulations require UST owners and operators to provide financial responsibility (FR) in case of a release from the USTs to cover environmental investigations and remediation and compensation for bodily injury and property damage. The owner and operators must utilize one of the following FR mechanisms.

  • Financial test of self-insurance
  • Guarantee
  • Insurance and risk retention group coverage
  • Surety bond
  • Letter of credit
  • Trust fund
  • Standby trust fund
  • Other alternatives are available for local units of government

However, there is good news: the new Michigan Underground Storage Tank Authority (MUSTA) fund is now available to provide an alternative to your FR requirement. If you purchase the MUSTA insurance, in the event of a release, the MUSTA fund will support costs for your environmental response to eligible releases. The deadline for owners or operators to buy-down their deductible amounts for calendar year 2016 is March 31, 2016. Fees to cover calendar year 2017 will only be accepted between November 1, 2016 and December 31, 2016. The only exceptions to the dates described above are when a new UST is discovered or if there is a new owner of the UST(s). In these instances, if the owner or operator chooses to buy-down the deductible amount, the fee must be submitted within 14 calendar days of discovery or new ownership of the UST(s). The buy-down would then be in effect until December 31st of the year the fee was submitted. Additional information on the MUSTA fund can be found at http://www.michigan.gov/deq/0,4561,7- 135-3311_4109_9977_73545—,00.html or by contacting a qualified consultant such as Superior Environmental.

New Guidance on LUST Release Closure
The other good news is recent regulatory changes for existing Leaking UST (LUST) releases have significantly changed (in a good way) how the Michigan Department of Environmental Quality Remediation and Redevelopment Division (MDEQ-RRD) implements the program. These changes are immediately relevant to all existing (open) LUST releases. Many releases that could not be closed previously can now be closed under the new regulations, and it may be prudent to re-evaluate open releases to determine if they are now suitable for Closure.

Property Transactions
If you are buying a property or selling a property, consider performing a Baseline Environmental Assessment (BEA). The BEA ensures that a buyer can buy a LUST contaminated property without liability to the LUST issues, but that liability remains with the responsible party.

In Closing (pardon our pun!)
Right now is a great time to re-evaluate any open releases in Michigan for potential closure options, as well as re-evaluate your Sites Financial Assurance Mechanisms. In many cases, it will be prudent to evaluate what the benefits can be, particularly if closure can be done without further remediation costs. Saying goodbye can be hard, but not when it is Saying Goodbye to your LUST files…..by getting Closure!