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Reproduced from the Coltura email list on January 25, 2023

Washington State: Plan For Gas Stations’ Future Instead of Bailing Them Out

About half of the 450,000 “brownfield” sites contaminated with hazardous materials in the U.S. are former gas stations. Most typically, the contamination occurred because of leaks in the former gas stations’ large underground gasoline storage tanks. These old gas station sites leach gasoline and other toxins into the surrounding soil and water, and are very expensive to clean up. Many of the site owners simply abandon them.

The federal government requires gas stations to carry $1 million in liability insurance to pay for cleanup costs. Gas stations can’t operate without that insurance. Some private insurers provide this insurance to gas stations on a market basis, but only after a careful risk assessment and only if the tanks are less than 20 years old. Tanks are at high risk of leaking after 25 years, and the risk grows with every passing year.

Thirty-six states provide gas stations the insurance they need to meet federal requirements, but without requiring risk assessments, newer tanks, or insurance premiums sufficient to pay for the cleanup of the soil and groundwater contamination that leaking tanks cause. These state insurance funds constitute an enormous, critical, and unseen subsidy to the oil industry. Another major result of lax state insurance programs is that about half of the operating gas stations in the US now have underground storage tanks that are overdue for replacement and/or are leaking.  

For many years, Washington state has provided heavily subsidized insurance guarantees to gas stations without requiring that they replace their aging tanks or undergo a rigorous risk assessment. The result is that Washington’s gas stations’ underground storage tanks are the oldest and riskiest in the U.S., with an average age of more than 28 years.  

The state’s old insurance guarantee program is failing, and now a bill advancing in the Washington legislature, HB 1175, would provide the $1 million federal liability insurance requirement for gas stations without a risk assessment and without requiring that they modernize their aging tanks. Further, the state is providing this insurance at only a small fraction of the cost that private insurers would require to insure similar risks. This bill would cause the state to assume more than $1 billion in liabilities of Washington state gas stations. As the EV transition advances and thousands of contaminated gas stations shut down, the state fund is sure to become insolvent.

What can be done? Washington residents can contact the bill sponsor, Rep. Beth Doglio, and ask her to replace this bill with one that takes a comprehensive approach to the present and future of gas stations. Such a bill would: (1) require all gas stations participating in the state insurance fund to undergo full environmental assessments and have modern underground storage tanks; (2) shut down those gas stations that have active gasoline leaks or at are high risk of leaking; (3) require that the oil industry, not the general public, pay the costs of gas station cleanups; and (4) plan for a future in which gasoline sales are declining rapidly.

Coltura’s law review article, Governing the Gasoline Spigot, analyzes opportunities for improving the regulation of gas stations. It proposes that states revoke gas station subsidies, prepare now for the rapid decommissioning and cleanup of large numbers of gas stations,  and make plans for repurposing gas stations for uses that will better serve their communities.