Underground storage tanks (USTs) are commonly used to store hazardous substances such as petroleum, chemicals, and waste materials. These tanks, often hidden from view, pose significant environmental and health risks when they leak or become damaged over time. Contaminants from USTs can seep into the soil and groundwater, leading to potentially devastating effects on ecosystems, human health, and property values.
The understanding of these hidden hazards is crucial for property owners and real estate professionals alike. This resource explores the complexities of UST contamination, examining its causes, consequences, and impacts on real estate.
What are Underground Storage Tanks?
According to the U.S. Environmental Protection Agency (EPA), underground storage tanks (UST's) are containers, including any connected underground piping, with at least 10 percent of their total volume located below the surface. Underground storage tanks are typically used to store petroleum products, chemicals, and other hazardous materials.
In 1984, Congress instructed the US Environmental Protection Agency (EPA) to develop regulations for underground storage tanks. When the UST program was launched, there were around 2.1 million regulated UST systems in the United States. Today, that number has significantly decreased as numerous substandard UST systems have been shut down.
Underground storage tanks are found on many residential and industrial properties, as well as on gas stations. Underground storage tanks (USTs) are commonly used at industrial sites to store chemicals, hazardous materials, or wastewater. These tanks are found in manufacturing plants, refineries, and warehouses. USTs are also a staple at gas stations, where they serve as reservoirs for fuel dispensed into vehicles. In residential settings, USTs are primarily used for storing heating oil for individual homes.
Risks of Underground Storage Tanks
The main problem with underground storage tanks is the potential for leakage. If the products stored in underground storage tanks leak into the ground, they can cause property contamination in the soil and water resources. Leaking underground storage tanks (USTs) can emit dangerous vapors into the air, endangering the health of nearby residents. Due to these risks, state and federal governments have implemented stringent regulations on the construction, operation, and maintenance of UST systems.
Until the mid-1980s, most underground storage tanks (USTs) were constructed from bare steel, a material prone to corrosion over time, potentially leading to environmental leaks. Additionally, improper installation and poor maintenance practices can also result in USTs leaking their contents into the environment.
1) Groundwater Contamination
Groundwater contamination is one of the most alarming risks associated with underground storage tanks. When a tank leaks, hazardous substances such as petroleum and chemicals can seep into the soil and eventually migrate to the groundwater. Groundwater is a crucial resource, serving as a major source of drinking water for many communities, as well as supporting irrigation and industrial operations. Contaminants in groundwater can lead to health concerns, including various cancers and reproductive issues, as well as ecological damage. The contamination may go unnoticed for an extended period due to its concealed nature, making it hard to detect and mitigate swiftly. Once groundwater is polluted, it is often an arduous and costly process to clean it, which makes prevention through proper tank maintenance and monitoring essential.
2) Environmental Concerns
Environmental concerns stemming from underground storage tanks (USTs) extend beyond groundwater contamination and encapsulate broader impacts on ecosystems and biodiversity. When toxic substances such as petroleum or chemicals escape from faulty tanks, they may infiltrate nearby soil and water bodies, causing a cascade of ecological harm. These pollutants can disrupt plant and animal life, altering food chains and leading to diminished biodiversity. Aquatic life is particularly vulnerable, as chemicals can accumulate in water bodies, affecting fish and plant populations and leading to dead zones devoid of life.
3) Explosions
Explosions are a significant and dangerous risk associated with underground storage tanks, particularly those storing flammable substances such as gasoline and other petroleum products. When these tanks leak, volatile organic compounds (VOCs) can be released into the surrounding soil and air, creating an explosive mixture if they concentrate in confined spaces. An ignition source, such as a nearby electrical spark or static discharge, can trigger an explosion, posing grave risks to nearby infrastructure and human safety. The intensity of such explosions can lead to substantial structural damage, endanger lives, and require costly emergency responses and cleanup efforts. Therefore, it is crucial for UST owners and operators to adhere to strict safety protocols, including regular leak detection and pressure testing, to prevent hazardous situations that could culminate in catastrophic explosions. Comprehensive monitoring and robust containment strategies are vital to minimize explosion risks and protect public safety.
4) Soil Contamination
The leaching of hazardous substances into the soil can reduce its fertility, adversely impacting agriculture and natural vegetation. Microbial life in the soil, essential for nutrient cycling and healthy soils, is also at risk, which might obstruct plant growth and soil regeneration. In the case of soil contamination, remediation efforts may be complicated and costly, and some areas might become unsuitable for growing crops or supporting plant life. Soil contamination can also pose substantial health hazards to humans through direct contact or ingestion of contaminated produce.
The Impact of Underground Storage Tanks on Real Estate Transactions
Environmental due diligence is essential in real estate transactions, ensuring that both buyers and sellers identify any contamination that could significantly affect a property's value or disrupt redevelopment and financing plans. One key issue to investigate is contamination from underground storage tanks on the property. If a property currently has or once had such tanks, soil contamination could exist, posing risks not only to the property in question but also to surrounding properties.
The effect of underground storage tanks (USTs) on property value depends on their condition, regulatory compliance, environmental risk, and how they are perceived in the market. Properly managed USTs may enhance property value, while those with problems or liabilities can substantially diminish it.
Removing and disposing of old tanks is complex, often deterring property buyers. Many realtors suggest removing or abandoning them before selling. When an underground storage tank (UST) is abandoned, it's usually filled with cement slurry. This is allowed only if removal would threaten structural integrity, such as when a tank is under a building or retaining wall. Abandonment is regulated by City, County, and State Environmental Agencies, and the tank owner must contact the right agency for requirements and permits.
There are various reasons to take a UST out of service, like leaks, business closures, or age. Sometimes, USTs are no longer needed. Removing a single tank in good condition, without leaks, usually costs between $15,000 and $20,000. If leaks are present, cleanup costs can rise significantly, starting at $10,000 for minor soil contamination and exceeding $1 million if groundwater is affected. On average, cleanup can cost up to $130,000.
For residential and industrial properties with underground storage tanks, unless the seller explicitly retains ownership of underground storage tanks (USTs), any USTs remaining in the ground at the time of the sale are considered part of the property and are included in the transfer. Once the property is acquired with USTs in place, the buyer is responsible for ensuring these tanks comply with relevant local and federal regulations. If the UST system is intended for use, its components must generally meet applicable local and/or state standards.
A typical Phase I Environmental Site Assessment (ESA) is conducted to protect a new property buyer from existing contamination at the time of purchase. Essentially, it documents the property's condition at the point of sale. The Phase I Report assesses whether past activities on the property might have released contaminants into the environment, such as soil, groundwater, or soil vapor. These potential issues are known as recognized environmental conditions (RECs). If contamination is discovered, the new owner can confidently assert that they did not cause it, as their usage of the property does not coincide with its previous uses.
LandApp's property reports can be used as a preliminary Phase 1 Report. With LandApp, you can create unlimited property reports for properties nationwide. The property reports provide proprietary risk index scores for various natural and man-made contamination risks, allowing you to conduct due diligence at a glance:
Coming Soon: LandApp will provide the location of underground storage tanks across the United States, allowing you to easily assess any property's proximity to underground storage tanks. Sign up to get notified about the launch of underground storage tank data within our new mobile application:
