Local News
April 18, 2018

Fuel tank law forces business decisions

By Julia Purdy

Motorists looking for a quick fill-up will have to drive a little farther in Rutland and Chittenden, as two well-patronized gas stations have closed their pumps in response to a state law, passed in 2013, requiring the replacement of all unlined, single-walled underground gasoline tanks (Title 10, Ch. 59, Sec. 1927 – Regulation of Category 1 Tanks). The law does not apply to tanks that are used exclusively to heat buildings or to store motor oil on farms.

Hooded nozzles greet customers at the Mobil station at the corner of West Street and Route 7 in Rutland, and at the Wooden Barrel in Chittenden. Both convenience stores remain open.

Carol Hayes, who co-owns the Wooden Barrel with her husband, Bernie Hayes, took the business back from owners who had purchased it a couple of years ago on a mortgage. As the deadline approached to change the tanks, those owners had decided the cost would be unsustainable.

The state requirement to remove or replace single-walled tanks was phased in over a 20-year period, beginning Sept. 1, 1987, when by law any new underground storage tanks had to be double-walled after that date. Existing single-walled tanks were grandfathered for 20 years, but on Jan. 1, 2018, gasoline could no longer be pumped, and those tanks must be taken out of the ground by Dec. 31, 2018.

Chapter 59 regulates liquid storage tanks, both above and below ground, that store petroleum and sludge. If the tanks fail, “significant contamination” of ground and surface water can result. The double-walled tanks protect against water leaking in from the outside, and gasoline leaking from the inside of the tank.

It’s a good idea, and most dealers endorse it, said Dan Dukeshire, general manager for Midway Oil Corp., an operating company that contracts with Mobil to sell Mobil gas and diesel. “We don’t argue with the intent,” he said.

But “retanking” would cost a quarter of a million dollars at Midway’s Mobil station on West Street, and the company has to decide whether that’s the best way to spend that kind of money. The Mobil station on North Main St. opposite Seward’s restaurant will remain open, because the tanks had previously been changed over to double-walled.

Dukeshire, a Vermont native in his 60s, is philosophical about closing the West Street pumps. “What goes into it,” he said, is the inescapable fact that less product is being sold these days and fewer stations are needed. He ticked off the contributing factors: more fuel-efficient cars are on the road; the Rutland County population has been declining for the last 25 years. Natural gas is competing with gasoline. Finally, the seasonal ebb and flow of tourists doesn’t pay the bills year-round. And pumps are expensive: new pumps cost up to $20,000 apiece, depending on the model, features and electronic innards.

The Hayeses take a similar view. Giving up the gasoline sales will have “zero” impact, Carol Hayes said. People will still come into the store: they buy grocery staples there, and it is also a Vermont Fish & Wildlife reporting station.

“For us the cost of maintaining the gasoline, all the permits and the inspection and licenses, it counteracts any profit you’re going to make, plus the increased cost if you were putting in new tanks,” she said.

The Wooden Barrel has been for sale since before the Hayeses came back on Nov. 1, 2017. “We’ve had one nibble but nothing more,” said Carol Hayes.

The Wooden Barrel tanks were emptied on March 7. Gulf Oil owned the gasoline – the Hayeses only paid for it after they sold it – so no money was due to them when it was taken out. The Hayeses have until the end of 2018 to apply for funding to remove the tanks. The loan application comes with a list of environmental inspectors and contractors and has two parts: one for personal data and one for the business.

To help out, the state has a loan program, secured by a 10-year mortgage. The loan is to cover costs of removing, replacing or upgrading tank systems and is available mainly to those affected by the statute, explained June Reilly, assistant coordinator for underground storage tanks with the Waste Management Prevention Division of the Dept. of Environmental Conservation.

The cost could run $3,000 to $20,000, depending on the number of tanks involved, tank size and physical conditions. The mortgage is interest-free to tank owners who own fewer than five facilities, and is available at 2 percent APR to the others. The funds are also available to replace heating oil tanks, she said.

Of 26 facilities tallied on Jan. 1, four have replaced their single-walled tanks, Reilly said. Other facilities have lined their single-walled tanks with fiberglass for a 10-year warranty period, another option.

Reilly said three gas stations in Vermont – Wooden Barrel, Mobil on West Street, and one other – have closed their pumps because all their tanks are single-walled. Others closed for a variety of reasons, some long ago.

“A lot of people took this as an opportunity to make business decisions about the store,” she said. “If you’re driving around the state and you see a gas station that has gone out of business, don’t assume it’s because of this law.”

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