Policy Update: Low-Threat UST Case Closure Policy

The State of California adopted the Low-Threat Underground Storage Tank Case Closure Policy (Low-Threat Policy), and it became effective on August 17, 2012.  The Low-Threat Policy specifically applies to petroleum Underground Storage Tank (UST) sites. Through a process of scientific evaluation and public participation, the California State Water Resources Control Board (SWRCB) promulgated an “updated and enlightened view” of “how clean is clean” for petroleum products (primarily gasoline) in soils and groundwater. The policy takes into account the protection of California’s precious groundwater resources and the current science of health risk exposures to humans. In effect, the Low-Threat Policy increases the threshold of gasoline allowed to remain in the soils and groundwater and provides clearer criteria for case evaluation and closure.  

Case closure is granted by regulatory agencies and is officially acknowledged with closure letters, which are “golden tickets” for property owners. Closure letters, sometimes called No Further Action Letter, state that no further environmental assessment or cleanup (remediation) work needs to be performed based on the facts and regulations at the time of the letter. TRG has seen that closure letters generally remove the financial liability and stigma associated with a contaminated real property. They allow property owners to realize the full value of their asset not discounted by unknown contamination remedies. Closure letters, in turn, allow for property sales, refinancing, and liquidation of assets nearer full market value. For small “mom and pop” gasoline station owners, closure letters enhance the positive equity in their property and can make a big difference in their asset planning.

Currently, The Reynolds Group is reviewing all UST clients’ cases through the lens of the Low-Threat Policy. Some of the clients' persistently stubborn UST cases will be eligible for closure under the Low-Threat Policy. TRG pursue site closure that meet the Low-Threat Policy criteria. After developing a Low-Threat Policy Evaluation Package, TRG uses it for all UST cases. 

Property owners should understand that as of the beginning of 2013, there is a logjam of cases being evaluated for closure by regulators at the County, Regional, and State levels. Regulators have said their priorities in the first half of 2013 are to close cases that meet the Low-Threat Policy criteria. TRG is hopeful that closing cases will allow regulator manpower and financial resources to be invested in higher priority (more contaminated) cases. However, the current backlog of closures means that once closure is granted on a case, closure letters may not arrive in the mail from the regulators for more than a year.

TRG will gladly review any case within the Low-Threat Policy framework and develop an opinion as to whether or not the case can be closed under the Low-Threat Policy, or will provide reasons why it can not.