Regulatory Compliance and Liability for Petroleum Storage Tanks – Environmental Law

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Q: I recently purchased land with an aging oil storage tank. What responsibility do I have in the event of a leak?

A: Strict compliance with all applicable environmental laws is required of owners of typical 250 gallon home heating oil storage tanks, or any larger overhead or underground storage tanks. Whether you realize it or not, oil leaking from these tanks will result in significant liability, expensive repair costs, and possible fines or civil penalties. Depending on the size of the tank(s), additional requirements to have a spill prevention, control and countermeasures plan will also apply.

It is good practice for owners of oil storage tanks to have the tanks inspected regularly by a qualified consultant. An inspection that identifies non-compliance, or the risk of a pollution event, will allow the owner to take corrective action to avoid future liability and costs. The State SafeTank program, administered by the NH Department of Environmental Services (“DES”), provides financial assistance to qualified parties to upgrade, replace or remove defective fuel oil tanks.

Homeowners should also review their insurance policies to determine what coverage they would have, or should purchase, to cover a leak. Most commonly purchased policies may not provide coverage for such events, in which case you may consider purchasing such additional insurance coverage. If a release has occurred, existing policies should be evaluated by a competent attorney to determine if coverage is available on a case-by-case basis.

If an oil release occurs, state law requires immediate notification to DES of any release that exceeds 25 gallons and, if less than 25 gallons, is not contained and immediately cleaned up. Failure to immediately notify DES may prevent eligibility for reimbursement of costs by the State Petroleum Reimbursement Fund (“Fund”) and may result in the application by the State of fines and penalties. Depending on the amount and location of a release, federal law also requires notice and imposes significant fines for non-compliance.

In the event of rejection, owners must promptly notify their insurance companies. If there is no or insufficient insurance coverage, owners can apply to the Fund, which is considered “excess insurance” coverage on top of any available primary insurance for the costs of repairing the release and certain damages to third parties caused by the contamination.

Compliance with these and related environmental laws can best be understood and satisfied with the assistance of qualified environmental consultants and experienced environmental legal counsel.

Posted: Union Leader
June 12, 2022

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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