When Is An Above-Ground Tank NOT An Above-Ground Tank?

The answer to this may seem obvious - if you’re talking about the physical description of a tank. However, there are regulatory definitions that dictate if your tank is an above-ground tank or a stringently regulated underground storage tank (UST). According to 40 Code of Federal Regulations (CFR) Part 280, an above-ground tank is regulated the same as an UST if 10% or more of the total system volume is beneath the ground surface. This includes piping and delivery connections. In fact, all regulated above-ground tanks and USTs are referred to in the regulations simply as “tanks”.

The regulatory requirements of RCRA Subtitle I, which covers the management of USTs, include construction and notification procedures; technical operating standards; leak detection, reporting, and corrective actions; and stringent tank closure guidelines. These regulations were enacted in 1988 with provisional exceptions for pre-existing tanks. But beware - the grace period for tanks existing prior to 1988 will end in two years. By 1998, all tanks must conform to spill, overfill, and corrosion protection standards.

The Office of Underground Storage Tanks, within the Office of Solid Waste and Emergency Response of the US Environmental Protection Agency (EPA), has published a document about this deadline and the actions that must be taken. “Don’t Wait for ’98" will help you understand your responsibilities as the owner of a previously non-regulated tank and can be obtained without charge by calling the EPA’s UST Hotline at (800) 424-9346. There are many exceptions in the definitions of regulated tanks. For example, if your tank only stores heating oil which is used on the premises, it is not regulated. Get to know RCRA Subtitle I; check out 40 CFR Part 280.10. Otherwise, the tank you thought was above the ground, and the law, might not be.

Doyne Wrealli, CHMM
Environmental Manager

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Evaluating the Effective Zone for an Air Sparging System

Air sparging is the process of injecting air below the water table to remove organic compounds by volatilization or aerobic biodegradation. Sparging systems are typically designed on the basis of pilot tests. The primary goal of the pilot test is to estimate the extent of the effective air sparging zone that can be expected to develop around a typical well at a particular site.  

The effective air sparging zone can also be evaluated using an appropriate computer model of multi-phase flow and contaminant transport. The computer model can provide important insight into the factors affecting air sparging at a site. The model also allows efficient evaluation of alternative system designs.

Hydro Geo Chem
recently presented the results of an evaluation of the effect of constant and variable air-injection rates on the effective sparging zone in both homogeneous and heterogeneous aquifers. The effective air sparging zone, defined as the unsaturated volume of porous medium resulting from the sparging process, displays characteristic temporal patterns of expansion, collapse, and stability in a homogeneous aquifer with a constant air injection rate. Because of the collapse, the effective sparging zone under continuous, long-term operation was found to be only ½ the total volume of the zone developed during the initial stage of operation. Similar temporal patterns were observed at constant injection rates into a heterogeneous aquifer, although the patterns were more complex. Deep higher-permeability channels that are initially treated by the sparging process were found to collapse unless flows were increased. Furthermore, in both homogeneous and heterogeneous aquifers, the air pressure measured at the sparging well stabilized at about the time of maximum extension, remaining nearly constant through the collapse and stability phases.

Cyclic variation of flow in the heterogeneous medium produced a seemingly chaotic pattern of air circulation for the first few hours with unsaturated channels forming, resaturating, then re-forming through the aquifer. The sparging zone eventually collapsed unless peak flows were constantly increased. Increasing air injection rates was found to be the only way to continue to move air through the deeper channels.
The results of the simulations have important implications regarding sparging system remedial design. These are:

1) the volume of porous media affected by the sparging process is reduced with time unless flows are increased,

2) dissolved contaminants near the sparging well may be pushed away from the well into zones that will be unaffected by the sparging process after a short period of time,

3) effective sparging zones observed during short pilot tests may not represent the long-term behavior of the sparging system, and

4) relatively stable pressure at the sparging well develops long before a stable sparging zone develops.


Liquid SaturationThe simulations also suggest that cyclic injection of air may result in a relatively stable sparging zone that is nearly identical to that developed by constant injection of twice the volume of air. A manuscript describing the sparging evaluation may be obtained by contacting Hydro Geo Chem, Inc.


Stewart J. Smith
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    Symposium Held On The Settlement Of Indian Water Rights

Symposium PictureThe Fourth Symposium on the Settlement of Indian Reserved Water Rights Claims was held in September in Portland, Oregon. The symposium provided information on the negotiation process and included discussions of the status of negotiated Indian water rights settlements in the west and water marketing provisions in settlements. The symposium was sponsored by the Native American Rights Fund and the Western States Water Council.

The overall mood of the symposium was pessimistic. Tribes and states criticized the Department of the Interior for its perceived failure to develop successful settlements. Departmental representatives who were scheduled to appear were largely absent, most attending the congressional debates surrounding proposed budget cuts for the Bureau of Indian Affairs. These included the chair of the Group on Indian Water Rights Settlements, John Duffy, and the Assistant Secretary of Indian Affairs, Ada Deer. Other criticism was drawn from attending Native Americans, especially during discussion of water marketing, who repeatedly objected to the lack of precedent and procedure to recognize the heritage and religious value of water to the tribes.

Many of the speakers described Washington D.C.’s political climate and economic forecasts for water rights settlements. Future settlements will likely not include funding for major irrigation projects which are the standard for quantifying Indian water rights. Rather, settlements will probably include some provision for limited water marketing to help reduce federal costs. Both House and Senate versions of the federal budget cuts call for reductions in money available for settlement and litigation for fiscal year 1996.

Matthew P. Wickham
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Accounting for Environmental Remediation Liabilities

How has your company recorded the financial liability for environmental clean up? The Accounting Standards Executive Committee recently issued a draft document for public comment (Exposure Draft) of a proposed set of rules on this subject entitled, “Environmental Remediation Liabilities.” In 1992, Price Waterhouse completed a survey which indicated that 62% of the respondents had known environmental liabilities that had not yet been recognized in the respondents’ financial statements. The purpose of the Exposure Draft is to provide guidance for measuring the amount of and determining the timing for recording the environmental liability. Current accounting rules require that companies record a liability when it is both probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Environmental liabilities generally arise within a legal framework. If litigation, a claim, or an assessment has been asserted or is probable of assertion and if your company is associated with the site, the company must assume that the outcome of such litigation, claim, or assessment will be unfavorable. Therefore, a liability has been incurred. What if you believe that the total cost of your clean up cannot be reasonably estimated? In general, the accounting rules state that when you can estimate a range of loss, then you must record it. This Exposure Draft further stipulates that the overall recorded liability may be based on a composite of cost ranges for some components of the liability and best estimates within cost ranges of other components of the liability. The Exposure Draft identifies six benchmarks in the financial recognition process and the liability should be evaluated as each of these benchmarks occurs:
  • Identification and verification of an Entity as a Potentially Responsible Party (PRP)
  • Receipt of a Unilateral Administrative Order
  • Participation, as a PRP, in the Remedial Investigation/Feasibility Study
  • Completion of Feasibility Study
  • Issuance of Record of Decision
  • Remedial Design through Operation and Maintenance, including post-remediation monitoring
The costs that should be included in determining the amount of the liability are the incremental direct costs of the remediation effort and the costs of compensation and benefits for employees to the extent an employee is expected to devote time directly to the remediation effort. One of the most controversial requirements of the Exposure Draft is the inclusion of fees to outside law firms for work related to the remediation effort. You may discount the liability to reflect the time value of money if you can reasonably estimate the timing of the cash payments for the liability. The Exposure Draft includes guidelines for this discounting process. You may obtain a full copy of this document through the AICPA Order Department, by calling 1-800-862-4272.

Michelle Quintanilla,
CPAChief Financial Officer
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