Underground Storage Tanks Financial Responsibility

Underground storage tank

Preventing or Repairing Environmental Damage

In 1986 the US Environmental Protection Agency (EPA) began developing a program to protect the environment from leaking underground storage tanks (UST), and put into place financial responsibility regulations for owners and operators of facilities storing petroleum. The EPA estimates that there are over a million underground storage tanks that are owned nationwide and that sell gasoline to the public; thus the need for financial responsibility to ensure cleanup of spills and leaks, and to provide compensation for third-party damages.

Since cleaning up leaks may be costly, the program started a financial responsibility requirement to ensure that owner/operators clean up spills and overfills, repair or replace leaking corrosive tanks and lines, and provide compensation for third parties if any bodily injury or property damage occurs. This not only protects the environment, but it also protects the owners from costly cleanups or lawsuits by third-party damages.

Convenience stores, gas stations and local governments that utilize underground tanks must comply with the financial responsibility requirements. The definition of an underground storage tank is defined is any “tank that has at least 10% of its combined volume underground,” has piping connected to it, and stores petroleum.  Farms and residential tanks, federal and state government tanks along with a few other exceptions are not required to provide proof of financial responsibility.

There are several types of financial responsibility that can be used to satisfy the requirement.  These include:

  1. A Surety Bond: A guarantee that the owner/operator will perform the tasks required in the bond.
  2. Obtain insurance coverage: A policy obtained through an insurance company or risk retention group.
  3. Obtain a letter of credit: This is a contract issued (usually) by a bank that guarantees payments for specific conditions.
  4. Obtain a guarantee: Another firm guarantees the coverage amount and can pass the “financial test.”
  5. Pass the financial test: Owner/operators can provide proof of a tangible net worth of at least $10 million.
  6. Set up a trust fund: That is administered by a third party.
  7. Use of the state financial assurance funds: Some states have funds retained to assist with third-party liability and cleanups of spills or leaking tanks.
  8. Other state financial responsibility options: This is dependent on the state in which the underground storage tank is located and the rules that are applicable for its use.
  9. Local governments have additional compliance requirements (see 40 CFR Part 280).

The amount of financial responsibility that is required varies by state and whether there are assurance funds available.  States such as Alabama, Alaska, Arizona, Arkansas, California, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Oregon, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, and Wisconsin all have some form of the financial responsibility requirement.

Owner/operators that choose to obtain a surety bond (in some states it is referred to as a performance bond) can apply for the bond they need with SuretyGroup.com.  The bond amount may be determined by the number of gallons of petroleum that pass through the tank on an annual basis, or other conditions may apply based on the state requirements.  The premium you pay for the bond will be based on the bond amount the state is requiring, and the owner’s credit. For bond amounts over $50,000, financial statements will be needed.

Call for a free, no-obligation quote. You can speak with a Surety Bond Specialist at 1‑844‑432‑6637, email info@suretygroup.com, or apply online.

 

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Financial Responsibility for Virginia Underground Storage Tanks

Underground storage tank

Permitting Underground Storage Tanks

In 1987, the Virginia Department of Environmental Quality implemented an Underground Storage Tank Program to receive federal grant money to conduct cleanups, oversee inspections and develop standards to protect human health and the environment. Underground storage tanks pose environmental risks due to contamination and leaking of fuel into the ground, which has the potential to affect drinking water. Because of this risk, The Virginia Department of Environmental Quality (DEQ) requires business owners of service stations, convenience stores and other non-marketers to have a permit to store hazardous substances.

Currently there are approximately 75,000 underground storage tanks in Virginia which must have permits and require inspections to ensure that tanks and lines are in acceptable conditions, and that any new installations, repairs, and upgrades are completed to code. Inspections must also be conducted for underground storage tanks that are no longer needed or meet safety standards and proper closure steps were taken.

In addition to permits and inspections, underground storage tank facilities must have a spill containment plan for any spills that occur at the fill pipe, have a notification system in place for overfills, a deterioration protection for product lines and tanks, a release detection monitoring system, and a form of financial responsibility for third party exposure.

Owner/operators of UST’s have an “annual gallons pass through” that determines the amount of financial responsibility for corrective actions that will be required. The financial responsibility is determined based on a sliding scale that takes into account the gallons of fuel that passes through on an annual basis.  For instance, if the “gallons that pass through” is less than 600,000 gallons, the financial responsibility required for each corrective action is $5,000 per occurrence, $15,000 for third party claims and a total occurrence of $20,000. If the annual amount of gallons passing through exceeds certain thresholds, the financial responsibility amount increases, up to a maximum of $150,000 for a third party claim.

Financial Responsibility

The form of financial responsibility the owner/operator will need to have to meet the state requirement can be:  a surety bond, a letter of credit, or a self-insurance trust agreement.  A surety bond can be obtained based on the bond amount required.

The bond is a guarantee that the owner/operator will pay the costs for the clean-up of a release or leak and will compensate anyone that may have been harmed as a result of the leak.

Keeping the environment and human health safe is not an easy task, and the regulations and statutes put into place by the State of Virginia and the US Environmental Protection Agency are there for a reason. Owner/operators must ensure their UST’s meet the safety standards and must meet the financial responsibility requirements to protect the environment and human health.  Obtaining a surety bond is as simple as applying online at SuretyGroup.com.

Call for a free, no-obligation quote. You can speak with a Surety Bond Specialist at 1‑844‑432‑6637, email info@suretygroup.com, or apply online.

 

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The Oil and Gas Industry is Bigger in Texas

Oil and Gas Drillers Bond

First In Reserves, Production

When you think of Texas, one image that may come to mind is oil wells. Texas is the highest-producing state for both oil and gas. In 2013, Texas had around 10.5 billion barrels of oil in reserves, and produced another 1.2 billion barrels in 2014. This is a third of all crude oil produced in the US that year.

North Dakota comes in second, but with less than half as much oil, showing 5.7 billion in reserves, and 396 million barrels produced. Other top oil and gas producing states include Alaska, California, New Mexico, Oklahoma, Colorado, Wyoming, Utah and Louisiana.

The Railroad Commission of Texas

The Railroad Commission of Texas was established in1891 to regulate the railroad industry. Today’s Commission no longer handles railroads, but has expanded to other industries. These industries include:

  • Oil & Gas
  • Alternative Fuels – Liquefied Petroleum Gas, Compressed Natural Gas, Liquefied Natural Gas
  • Gas Services
  • Pipeline Safety
  • Mining & Exploration – Surface Coal and Uranium Mining, Reclamation

The Railroad Commission of Texas has two main goals: protect the environment and preserve individual property rights.

Surety Bonds

The Commission’s Oil and Gas Division regulates oil and gas wells in Texas. The Commission requires drillers to provide a form of financial security before issuing a permit to drill, recomplete or reenter a well. The security can be a surety bond, letter of credit, or cash deposit. A surety bond continues until the conditions of the bond have been met, or is released by the Commission or its authorized delegate.

There are two options available for the Texas P-5 surety bond requirement for operating and abandoning oil or gas wells:

Individual Bond: Form P-5PB(1) is only for well operators that have no other activity other than wells. The bond covers all permitted wells and all current wells. The amount of the bond is determined by the depth of the wells.

Blanket Bond: Form P-5PB(2) is available for all operators and covers all commission-regulated operations performed by a person, including all current wells.  The amount of the bond is determined by the total number of wells:

  • 1 to 10 wells = $25,000 bond
  • 11 to 99 wells = $50,000 bond
  • 100 or more wells = $250,000 bond

Operators without wells that are required to file financial assurance must have a $25,000 bond.

Bay and offshore wells are required to have additional security. A presumed plugging cost for a bay well is $60,000 and offshore well is $100,000.

Commercial facilities for storage, reclamation, treatment, disposal or recycling will use bond form CF01.

 

No matter if you have one well or thousands, SuretyGroup.com can get you bonded.  We are licensed to write all bonds for the Railroad Commission of Texas and can deliver your bond quickly.

Call our Surety Bond Specialists at 844-432-6637, email info@suretygroup.com, or apply online at suretygroup.com.

 

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Changes for California Oil and Gas Well Drillers

Oil and Gas Drillers Bond

Surety Bond Amounts Rise in 2018

California‘s oil and gas well drillers must comply with the state’s laws in order to prevent their wells from becoming environmental and health hazards.

Oil and gas drilling operators will see a change in their surety bond requirements starting January 1, 2018.  That’s when California Assembly Bill 2729 that passed in 2016 takes effect.

Besides increasing the bond amounts, the bill states new rules for handling idle wells, with new fees and stricter regulations for unused wells.

Bonds can be posted for individual wells. But if an operator has more than 20 wells, a blanket bond can be issued to cover all their wells. Bond amounts depend on the number of wells handled.

Bonds for individual wells are:

$25,000 for wells less than 10,000 feet deep

$40,000 for wells 10,000 feet deep and over

The new blanket bond amounts are:

$200,000 for 50 or fewer wells

$400,000 for more than 50 but fewer than 10,000 wells

$2 million for more than 500 but no more than 10,000 wells

$3 million more than 10,000 wells

The bill also regulates the management of idle wells — wells that have been neglected or abandoned — which can cause great harm to the environment and to people. The definition of long-term idle wells has changed from wells that have not been in use for over ten years to eight years. Idle wells have not been in use for two consecutive years. Starting in 2018, operators have the option to pay the fees or file a plan for elimination.

The yearly fees for idle wells will be:

Wells idle 3-8 years =  $150

Wells idle 8-15 years = $300

Wells idle 15-20 years = $750

Wells idle over 20 years = $1500

 Get more information on Assembly Bill 2729 here.

Whether you have one well or thousands, SuretyGroup.com can get you bonded. Contact us for a free, no-obligation quote. We offer low rates and fast service. Email info@suretygroup.com, apply online at suretygroup.com, or call our Surety Bond Specialists at 844-432-6637.

 

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Why Do We Need Coal Mining Reclamation?

surface mining

Cleaning Up When the Job is Done

Coal mines have been operating in the US since the 1740’s. It wasn’t until the 1930’s that surface mining began. In those days, both mining operation types paid little or no attention to the lasting effects the mines had on the vegetation, animal life and overall environment of the surrounding areas. Erosion, sinkholes, contaminated soil and water, and air pollution are a few issues connected with mining.

Eventually a few states tried to take action to regulate the coal mining industry, starting with West Virginia in 1930. Some states required permits and surety bonds to make sure the land was returned to its natural state once the mining operation was complete. But many mining operations would move to a state with easier regulations, and continue to cause destruction to the land around it.

The Surface Mining Control and Reclamation Act of 1977 ensures that before a mining permit is issued, all applicants must submit a reclamation plan and post a surety bond to ensure that they follow reclamation procedures. The mining project cannot begin until the plan is approved and a surety bond is secured.

The bond amount can be quite large, as it must be enough to complete the full project in the event the applicant does not follow through on the contract. The premium would be a percentage of the bond amount. Credit and financials help determine the premium.

A reclamation plan must include:

  • Pre-mining condition and use of the land to be mined.
  • Proposed use of the land after reclamation.
  • Estimated timetable for reclamation.
  • What steps will be taken to comply with air and water quality laws.
  • Post a surety bond

The surety bond ensures that there is enough money to complete reclamation. The amount of the bond must equal the amount of the proposed reclamation plan. This bond will not be released until the state or federal regulatory office had determined that the reclamation is successful. This can be a long period of time, such as over 10 years after the reclamation has been completed.

SuretyGroup.com writes Reclamation Bonds for mining operations. We offer free, no-obligation quotes, and fast, friendly service.

Call our Surety Bond Specialists today at 844-432-6637 or email info@suretygroup.com.

 

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Why Are Underground Storage Tanks In Michigan Regulated?

Underground storage tankPurpose of Permit Process

Nationwide there are over 561,000 underground storage tanks (UST’s) that store combustible or flammable substances per the US Environmental Protection Agency. Underground storage tanks pose environmental risks due to leaking and contamination of ground water, which has the potential to affect drinking water. Because of this risk, the Storage Tank Division of the Michigan Bureau of Fire Services, requires business owners of service stations and convenience stores and other non-marketers to have a permit to store hazardous substances.

The permitting process includes submitting of site plans that must provide the proximity of nearby drinking water sources, sewer systems, power poles, road and rail ways and any other source of risk in the event of a leak.  The owner/operators that utilize underground storage tanks will also need to provide diagram plans for the installation or replacement of a tank including such information as the underground depth of the tank, layout of pipes, leak detection, type of tank, spill protection and other flow control devices.

Owner/operators must also go through an inspection process to ensure the safe storage of hazardous substances such as petroleum, blends of petroleum used for motor fuels, jet fuels, lubricants, petroleum solvents and other mixtures of petroleum. In addition to petroleum, a list of chemicals found in Section 1121 of Part A of Title I of the Clean Air Act, Chapter 360, 84 Stat. 1685, 42 U.S.C. 7412 are included as hazardous substances that must also be monitored for safety.

Owner/operators must report any leaks or suspected leaks within 24 hours. Tanks can corrode over a period of time or develop a leak by other means, and owner/operators are responsible for reporting these events. The leak event report will need to be updated within 14 work days as to the outcome of the leak, if it was resolved, how it was resolved, etc. In the worst case, the state may impose corrective measures so the event is not repeated.

Financial Responsibility

As a measure of safety, the Division requires a form of proof of financial responsibility which must be provided by the owner/operators of businesses that have underground storage tanks. The financial responsibility is an assurance that in the event of a corrective action by the Division, or for compensation to a third party for bodily injury, or property damage as a result of a leak, that there is a financial means to cover the event. The financial responsibility can be in the form of a surety bond, letter of credit, trust fund, self-insurance, insurance or any other form of guarantee acceptable to the state.

If a surety bond is chosen as the form of financial responsibility used, both owners and tenants must both be registered with LARA and both may be required to be named in the bond depending on the terms of the lease agreement or contract of the property. LARA will determine who is to be named on the surety bond.

Keeping the environment and human health safe is not an easy task, and the regulations and statutes put into place by the state of Michigan and the US Environmental Protection Agency are there for a reason. As a result, underground storage tanks will continue to be monitored for safety, and through these measures, our drinking water and underground waters will be kept safe.

SuretyGroup.com – Your Online Bond Provider.

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South Carolina Water Well Drillers

Water Well DrillingCertification and Bond Requirement

Water is a necessary resource for houses, farms and businesses, but they may be located in areas where water resources are not readily available.  In order to get the water resource to a usable method of output, a well will need to be drilled, dug, or bored into the underground aquifers. This may include drilling into rock or near coastal regions.

Since drilling, digging or boring a well can be a technical job, a Well Driller would be hired to survey the property and choose the best location for the well, the depth of the well, what the well may yield, and other considerations such as the elements under the ground surface including bedrock and clay.

Additional considerations to be taken into account include insuring the quality of the water and the conditions that may affect it.  Water well drillers would look at factors such as the proximity of barnyard runoff, methane gas, previous use of pesticides and fertilizers, nearby septic systems, dumpsites or old wells, and other factors that may not be seen. All of these factors can contaminate underground water and lead to undrinkable water or plugging of the well.

Water and environmental well drillers in South Carolina are required to be certified and have various levels of skill that allows them to drill, bore or dig into the ground. They must pass a series of exams to prove that they have a good working knowledge of well drilling and have the proper equipment.

Water well drillers have a $25,000 well driller bond requirement. The bond guarantees that the driller will perform their duties in a manner that complies with the laws in Section 40-23 of the South Carolina Code of Laws. The bond must be renewed annually with an approaching renewal date of June 30, 2017.

Insure that you water is drinkable and safe and hire a highly trained certified driller. The State of South Carolina provides a license look-up of water well drillers that can be found on the Environmental Certification Board website at http://www.llr.state.sc.us/pol/environmental/index.asp?file=laws.htm.

 

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Georgia Water Well Drillers and Contractors

Water Well DrillingLicense and Bond Requirement

Water is a necessary resource for houses, businesses and farms, but they may be located in areas where water resources are not readily available.  In order to get the water resource to a usable method of output, a well will need to be drilled, bored, or dug into the underground aquifers.

Since drilling, boring or digging a well can be a technical job, a Water Well Driller or Water Well Contractor would be hired to survey the property and choose the best location for the well, the depth of the well, well yield, and other considerations such as the elements under the ground surface including clay and bedrock.

Additional considerations to be taken into account include insuring the quality of the water and the conditions that may affect it.  Water well contractors and drillers would look at factors such as the proximity of methane gas, barnyard runoff, previous use of pesticides and fertilizers, nearby septic systems, old wells or dumpsites, and other factors that can be seen or unseen.  All of these factors can contaminate underground water and lead to undrinkable water or plugging of the well.

Water well drillers and contractors in Georgia are required to have a license to drill, bore or dig into the ground.  They must pass a series of exams to prove that they have a good working knowledge of well drilling and are capable of performing the services as well meet the standards of the Georgia Water Well Standards Act of 1985. The Act not only defines drilling standards but also includes a license and performance bond requirement.

Water well drillers and contractors have a $30,000 performance bond requirement.  (The bond amount increases July 1, 2017.) The bond guarantees that the driller or contractor will perform their duties in a manner that complies with the standards of the Act.  The bond will need to be renewed by June 30 of odd years in which the next renewal date is June 30, 2017.

Water well contractors can go a step further and obtain a MGWC certification otherwise known as a Master Groundwater Contractor which requires an additional certification and general exam.  This certification is the highest level a contractor can achieve.

Insure that you water is drinkable and safe and hire a highly trained licensed driller or contractor.  The State of Georgia provides an online list of licensed water well contractors that can be found on the Environmental Protection Division website.

 

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Your State’s Construction Projects Require Bonds

Know the Bond Requirements of Federal, State and Private Projects

Construction on a major state project begins. There’s a big state construction project coming up, and you want to bid on the job. You submit your bid and back it up with a Bid Bond. That tells the state that you mean business, and you have every intention to follow through on the project for your bid price and deadline.

If your bid is accepted, as the winning bidder, the state will require you to have a Performance and Payment Bond. This bond ensures that you meet the terms of the contract, and establishes a three-way legal contract beginning with the state, or “obligee.” As the contractor, or “principal,” you are the second entity involved in the bond, and you must honor your obligation to do the job correctly, on budget and on time. An insurance company, or “surety,” is the third party involved in the bonding process.

The best way to obtain a Performance and Payment Bond is to contact an insurance agency specializing in surety bonds, such as SuretyGroup.com. The agency can be held liable if you do not do your job, so they will evaluate all risk factors before issuing a bond.

Not All Federal Projects Require a Performance Bond

If you land a federal contract, the Miller Act states that you will need a surety bond if the project is over $100,000. In 1994, Congress created the Federal Acquisition Streamlining Act, which excludes federal contracts under $100,000 from mandated bond requirements.

State Government Contracts

The Little Miller Acts are based on the federal Miller Act. These laws require that state government construction projects include performance and payment bonds. Each state’s Little Miller Act has different requirements for the sizes of contracts that require bonds.

Private Construction Projects

The owner of a private construction project can decide if he wants bonds to guarantee the work.

Get Bonded Now

No matter how big or how small your project, or whether it’s on the private, city or federal level,  Suretygroup.com can help you get the bonds you need.  Give us a call at 1‑844‑432‑6637Your bond should be issued within 24 hours. Any questions? We’re here to help.

 

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