September 2, 2025 • 25 mins
What really happens to a tank at the end of its life? In this episode, we take a deep dive into what it means for a tank to be “out of service” or “permanently closed,” and how those terms differ depending on the regulation in play - especially between 40 CFR 112 and Alaska’s 18 AAC 75. Shannon breaks down what’s required when tanks are removed or left in place, what documentation is needed, and how terms like “grandfathering” can complicate things for facilities hoping to avoid costly upgrades. Whether you manage a single tank or a whole tank farm, this episode is a must-listen for staying compliant through a tank’s final days.
EPA Guidance for Regional Inspectors
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Haley Hall (00:10):
Welcome to Tank Talk with Integrity Environmental.
Join us as we sit down withfounder, principal consultant
and bulk fuel storage expert,Shannon Oelkers, to explore
regulations, safety andessential tips for navigating
the bulk fuel storage industry.
Join us as we explore theunique joys of work and life in
Alaska with industry experts,including our team, vendors we
(00:30):
work with and the companies wesupport.
Shannon, I'm curious whathappens to a tank at the end of
its life?
Shannon Oelkers (00:42):
What do you mean Haley?
Like when it's no longer useful, when it goes to that big tank
Heaven in the sky?
Haley Hall (00:49):
Yes, so I heard about a client of ours recently
taking a tank out of service,but I wondered exactly what that
meant.
Shannon Oelkers (00:56):
Oh, okay.
Well, out of service is alittle tricky, depending on what
regulation we're operatingunder.
Haley Hall (01:02):
Okay, so this term out of service.
It has different meanings underdifferent regulations?
Shannon Oelkers (01:07):
Yeah, it sure does, Just like everything we do
.
It cannot be just one simpleanswer.
Do you want me to bring it downfor you and maybe our listeners
to just go through?
Haley Hall (01:16):
Absolutely, where do we start?
Shannon Oelkers (01:18):
Okay?
Well, let's start first withthe difference between out of
service and permanently closed,because there is two terms for
what I would consider the samething.
First, permanently closed isused by 40 CFR 112.
And then, where a lot of ourlisteners are, in the state of
Alaska, the regulation 18 AAC 75uses the term out of service,
(01:40):
which is often shortened to OOS.
You may see that in otherplaces.
And then Haley, there's reallife where most people just call
tanks out of service or closed.
I swear almost nobody uses thepermanently closed term because
that's the EPA.
Bless their hearts.
They always like to picksomething.
Nobody uses.
Haley Hall (01:58):
So does the out of service or permanently closed
terminology just mean that thetank's empty?
Shannon Oelkers (02:03):
No, no, and we got to be careful about this
because empty does not correlateto closure status, and this is
a really important distinction.
Out of service or permanentlyclosed are terms that are from
the regulations that indicatethe tank's no longer in use, no
longer meets regulatoryrequirements or it doesn't meet
inspection criteria forcontinued service.
Lots of tanks are in servicebut kept empty for a bunch of
(02:27):
different operating factors likereduced usage during winter
months, economics.
They just don't need to use thetank because they're not buying
as much fuel.
It's tricky because if a tankhas been empty for a while,
there's a tendency for the yardoperators to just start saying
the tank's out of service.
But that's not correct.
In the eyes of the regulation,as long as the tank is being
(02:48):
routinely maintained andinspected, it's considered in
service, even if it's been emptyfor a while.
Haley Hall (02:53):
I'm getting the feeling that using the term out
of service should be done alittle bit more carefully.
Shannon Oelkers (02:57):
Yes, absolutely , because it carries great
regulatory weight.
Haley, If you were to have astate or federal inspector on
your facility and you casuallyreferred to a tank as out of
service, they would perk theirears up and want to know a lot
more if the tank was maybe inservice in your permitting.
So tanks that are consideredout of service have to meet
certain requirements and tanksthat are in service have to meet
(03:19):
certain requirements.
So even in death, the state andthe EPA want to say how your
tank is managed, which makes melaugh.
Haley Hall (03:29):
So which specific regulations impact a tank's
service status?
Shannon Oelkers (03:33):
It's a short and powerful list.
For most of the United States,Haley, it's just going to be 40
CFR 112.
But some states, like Alaska,have additional requirements.
If you qualify so in Alaskathat'd be 18 AAC 75.
And that's only if you storeover 420,000 gallons.
And we'll get to that later.
But maybe for the rest of thisdiscussion let's focus on the 40
CFR 112 and then bring thestate of Alaska in later, since
(03:56):
we have listeners all over theplace.
I do want to briefly mentionthat there are also very
specific regulations for theservice status of underground
storage tanks at the state andfederal level.
But I would really like to stayabove ground today.
That also could be its ownpodcast.
There's a lot there.
Haley Hall (04:13):
Got it, so leaving USTs buried for now.
Earlier you mentionedinspection standards.
Do they apply as well?
Shannon Oelkers (04:20):
They do, sort of.
So STI SP-001 and API 653,which are the two most commonly
used.
They both address when a tankis suitable for continued
service.
So the whole point of that isto determine if the tank is
suitable for continued service.
But they don't necessarily sayhow to indicate that a tank is
out of service.
(04:41):
They just tell you when to quitusing it.
Essentially, so all of theregulations about what to do
once a tank is taken out ofservice, they just tell you when
to quit using it.
Essentially so all of theregulations about what to do
once a tank is taken out ofservice fall under 40 CFR 112,
and then maybe some specificstate layers over the top of
that.
Haley Hall (04:53):
Yikes.
So this is getting way morecomplex than I even originally
thought.
Shannon Oelkers (04:57):
Yeah, don't worry, though, we'll break it
down.
For ease of this conversation,though, let's assume that we're
talking about a tank that doesneed to be permanently closed.
We're not all talk about tanksthat are in good condition that
we may not want to use anymore,but for now let's say that it
had an inspection.
The inspector found a fatalflaw, horrible corrosion, a
through thickness hole,something bad enough that it's
(05:18):
not coming back.
The repair just does not makeany financial sense.
Once you've decided that a tankis going to go out of service
at your facility, the 40 CFR 112regulations kick in, and there
are now two pathways before us.
You can take it out of serviceand leave it in place, or you
can take it out of service andremove it.
Haley Hall (05:36):
Shannon, I have a feeling that in Alaska the tanks
get left in place way moreoften, and in the Pacific
Northwest the tanks get removedmore often.
Shannon Oelkers (05:44):
You would be correct, and that's just a
logistics function In the lower48, it's a lot easier to get
somebody with a welding crew anda cutting crew and cranes and
telehandlers and all that stuffto remove the tank out of there
In Alaska.
That's a very expensiveproposition.
So we definitely see a lot morein-place, out-of-service tanks
up here in Alaska.
Haley Hall (06:05):
Well, let's just start with the first part.
What do the regulations requirefor a tank that is taken out of
service?
Shannon Oelkers (06:11):
So 40 CFR 112 has a section two with
definitions, and in that sectionit talks about permanently
closed as any container orfacility for which, one, all
liquid and sludge has beenremoved from each container and
connecting line, and, two, allconnecting lines andudge has
been removed from each containerand connecting line, and two,
all connecting lines and pipinghave been disconnected from the
container and blanked off.
All valves, except forventilation valves, have been
(06:31):
closed and locked, andconspicuous signs have been
posted on each container statingthat it is a permanently closed
container and noting the dateof closure.
Haley Hall (06:40):
Okay, so that seems pretty straightforward.
What about removing the tank?
Do they just haul it off, maybetoss it off a cliff?
Shannon Oelkers (06:49):
It's almost like a trick question.
If a tank that was in your SPCCplan is removed, you have to
show documentation that it wasremoved in accordance with the
definition that I just read.
So you have to keep recordsfrom your contractor showing
that all sludge and liquids wereremoved from the tank and the
connecting lines and documentingwhere the tank was disposed of.
So when you hire thatcontractor you're going to want
(07:11):
to make sure that they areprepared to provide a report
that shows the date the tank wascleaned, the method, the date
of disposal and the locationthat the tank was taken to for
disposal.
So you can't throw it off acliff, because that's not going
to be a good answer.
Haley Hall (07:23):
Darn
Shannon Oelkers (07:24):
I know, I know, I know Some tanks I would love
to throw off a cliff.
They're just a difficult thing.
So just giving you like a plainEnglish answer, a compliant
report would say something likethis On June 8th, super
contractor crew drew down allremaining liquids from the tank
and associated piping Hot wateror dry wings were used to remove
(07:45):
any remaining oily residue.
All liquids were disposed of atthe local water treatment
facility in accordance with ourtotally compliant waste
management plan and a tank washauled to the local metals
landfill for disposal on June9th and it should have a photo
log of the tank being cleanedand removed and then any piping
that was connected to that tankthat still remains at your
facility should have a blindflange on it.
Haley Hall (08:06):
Oh, why do I get the feeling like this doesn't
happen very often.
Shannon Oelkers (08:09):
Because it doesn't.
I mean the work happens, butthe contractors aren't usually
asked to provide a report likethis and there isn't really a
requirement for that reportother than you must comply with
your SPCC requirements.
So hopefully everyone listeningto this will remember to ask
for a report like this in thedeliverables the next time they
do a project like this to take atank out of service.
(08:31):
It does not have to becomplicated or long, it just
needs to be a memo addressingthe important bits with
supporting photos.
You can even make your ownreport if the contractor just is
not capable or willing to do it.
But if you take it out ofservice and then you're getting
a federal inspection a few yearslater, they will literally ask
where are your records fortaking this tank out of service?
(08:52):
Because what they're worriedabout is that you did throw that
tank off a cliff and they wantto know where it went and is it
polluting the environmentanymore?
Haley Hall (08:59):
That makes sense.
Well, that covers destruction.
What about the ones remainingin place?
Shannon Oelkers (09:05):
Well, that covers destruction.
What about the ones remainingin place?
Okay, well, let's go back to 40CFR, 112.
And that definition.
There was some additionalrequirements that I read about
tanks and this also applies topipelines, by the way, that are
buried, that are left in placebut taken out of service.
So let's go back and remember.
There was a second part thatsaid all connecting lines and
piping have been disconnectedfrom the container and blanked
off.
All the valves have been closedand locked, except for
(09:26):
ventilation valves, and thenconspicuous signs have been
posted on each container statingthat it is a permanently closed
container and noting the dateof closure.
This means the tank has to havesigns stating that it's
permanently closed.
You got to put that date ofclosure on it and that sounds
easy enough, and it is the dayyou take it out of service.
But remember, these tanks areoutside right, so the signage
(09:50):
can fall off, it can fade orpeel as coatings fail.
And the key part aboutpermanently closed tanks is that
you have to have documentationof the first part as well, the
part where you remove theliquids and sludge, and then you
have to maintain the signs andthe isolation of the second part
, the liquids and sludge, andthen you have to maintain the
signs and the isolation of thesecond part.
So, folks, the epa requires usto maintain tanks even in death.
It's a super useful requirement, though, hayley, because unless
(10:16):
the tank is labeled like, howdo you know if it's out of
service or just not beingmaintained correctly?
And I think that's why the epahas such specific language about
this, because it's easy to belike oh yeah, that tank's out of
service, but if you open it upand there's fuel in it and it's
not isolated and it's notlabeled, is it out of service?
So it's a mechanism for theregulation to be like is this
(10:37):
tank something we're going toregulate or not?
Haley Hall (10:39):
Right, that makes sense.
Well, are there commoncompliance issues with
maintaining the permanentlyclosed or out of service status
of a tank or a pipeline?
Shannon Oelkers (10:49):
Yeah, yeah, there are.
I can just go over a few ofthem if you want me to right now
.
Haley Hall (10:53):
Yeah.
Shannon Oelkers (10:53):
Okay, I mentioned the big one already
label failure.
It just fades, peels, falls off.
The second biggest one isfailing to keep records of the
removal of liquids or sludge,like they did it, but they
didn't keep any evidence of itor a statement or a memo or
anything.
And then the next one is thatthey did not remove the liquids
or the sludge.
You open the tank up andthere's still junk in the bottom
(11:14):
.
And as a side note on this one,especially for buried pipelines,
which kind of applies to thiswhole conversation, we have
definitely seen in our historyin integrity, where lines that
have been taken out of service,especially more complex ones,
there's lots of low points,especially older lines.
There's a lot of fuel that isentrained in, like the walls of
(11:34):
the piping, and so they may havetaken it out of service and
drained it down, but 10 or 20years later there's fuel that's
relaxed out of the steel ormaybe it was trapped in a low
point, and so we have seen tanksand piping that were cleaned
but then 10 or 20 years laterthere's some junk that has just
come out of different places inthe tank or the piping.
(11:54):
So I do want to say thatsometimes that failure to remove
all liquids or sludge is notnecessarily like it can happen
anyway, even if you do it allright, I guess.
So you do want to kind of takea peek in there every once in a
while and make sure nothing'sbuilding up.
And then there's just a couplemore common ones just failing to
isolate the tank or pipingsegment properly.
The most common version of thisis that it's in line with an
(12:15):
active piping system and theyclose the valve but they don't
physically isolate the tank andover time that valve degrades
and you can get a leakinternally.
So the fuel is moving from oneside of the valve to the other
within the pipeline it's notoutside of the pipeline and that
tank can slowly fill up withfuel because it's getting fuel
every time the pipeline'spressurized A little bit gets
into the tank.
(12:36):
That isolation failure is notas common as the others, but it
does happen.
And then this one's supercommon a buried pipeline that's
been capped off and taken out ofservice isn't labeled at all,
so nobody knows what it is whereit goes when it was taken out
of service.
Lots of surprises.
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Haley Hall (13:35):
Shannon, so far we've talked about 40 CFR 112,
which applies across the US, butyou also mentioned 18 AAC 75.
What does that regulation haveto say about service?
Shannon Oelkers (13:47):
Okay, so that one only applies to facilities
within the state of Alaska thatstore over 420,000 gallons of
fuel.
So start there.
So if you're listening to thisand your facility does not meet
these requirements, you can turnthe podcast off now or skip
ahead.
We've got more stuff at the end.
You want to hear.
So this regulation, there's twodifferent sections.
This one specifically hasservice or out of service
(14:09):
requirements for tanks and thenanother one for piping.
So I'll start with the piping.
It's the regulation for thoseof you who like to look these
things up on your own is 18 AEC75-75-080-O and it states that
the owner or operator of afacility oil piping that is
removed from service for morethan one year and that for more
than one year is important andthat again maybe could be
(14:32):
another podcast Ensure that thefacility oil piping is free of
accumulated oil identified as toorigin, marked on the exterior
with the words out of serviceand the date taken out of
service.
Okay, so what does the state ofAlaska say about tanks?
(14:56):
Almost the same thing by thissubsection are completed.
Haley Hall (14:59):
Okay, so what does the state of Alaska say about
tanks?
Shannon Oelkers (15:04):
Almost the same thing but a little bit
different.
So I will say the state ofAlaska addresses both shop built
and field constructed tanks intheir regulations, but the out
of service piece is only foundin the field erected section of
the 18AC-75.
I believe that's because yourhorizontals, or the shot belts,
(15:27):
they're going to be covered byyour SPCC regulations already.
So the state chose to focus onthe larger tanks.
So for field-constructed tanksthat's 18AC-75-065, also O,
because the state likes to beneat and tidy like that.
A field-constructedabove-ground oil storage tank
removed from service for morethan one year must be free of
accumulated oil, marked with thewords out of service and the
(15:48):
date taken out of service,secured in a manner to prevent
unauthorized use, and otherwiseblank-flanged or otherwise
disconnected from facilitypiping.
The owner or operator shallnotify the department when a
tank is removed from service andwhen the actions required by
the subsection are completed.
And then they have an additionthat says in this subsection
removed from service means notin regular use for the service
(16:09):
intended and not included in aregular maintenance and
inspection program in accordancewith this section.
Haley Hall (16:15):
Wow Well this might be silly, but we've heard the
two terms there's permanentlyclosed and out of service.
Do you have to label the tanksor piping with both of those
terms?
Shannon Oelkers (16:26):
That's not silly, but I'm imagining the
stencil for permanently closedwould be ridiculously long.
For most facilities using thelabel permanently closed is
sufficient because we're tryingto meet 40 CFR 112.
I do see a lot of out ofservice stencils.
Almost everybody uses out ofservice.
But I feel like the regulationit does require labeling saying
(16:47):
it's permanently closed orindicating that it's permanently
closed.
But if you operate within thestate of Alaska and have that
larger facility, the state'spretty specific that you need to
label it as out of service.
I haven't seen the state or theEPA go down that road of
pettiness yet, but if you wantedto be extra compliant, extra,
extra compliant, I wouldprobably just slap both of them
(17:08):
out there, create the stencilonce and then just keep
reapplying it every couple years.
What both regulations areconsistent about, though, across
the board, is that you have toinclude the date taken out of
service and the origin if it'spiping.
And just a note on origin forpiping if you have piping that's
(17:28):
buried between a marine headerand tank farm and you're going
to take it out of service andcap it where the pipe daylights,
so where it comes up aboveground, you need to label it
with the end location at theother end.
So if you're standing at themarine header, it needs to say
tank farm, and if it's fororigin, and if you're standing
at the tank farm, it needs tosay marine header, and the
(17:51):
reason for that is where you arestanding.
Clearly, that's where the pipestarts, but you need to know
where it goes, and so I haveseen quite a few that just say
tank farm at the tank farm andI'm like, well, yes, I know on
origin.
And then Haley, I do want totalk about something we have to
(18:11):
talk about grandfathering.
If we're going to talk aboutout of service.
Haley Hall (18:15):
Did you just say grandfathering?
What on earth does grandpa haveto do with tanks?
Shannon Oelkers (18:19):
okay.
So it's a weird, a weird term.
I know it's weird.
It's used in multiple ways.
It's really common in realestate as well.
In general, grandfathering is aterm for a facility component
that was compliant at the timeit was installed.
And keep in mind we work withtanks from every decade that are
still in service, from 1914 allthe way to last year.
(18:39):
So we have lots of differentinstallation dates.
It's not like every tank wasinstalled in the 70s or
something.
As these regulations change,they create grandfathered
infrastructure where if a tankis in continuous service it does
not need to meet modernrequirements for leak detection,
foundation style gauging etc.
So both federal and stateregulations have grandfathering
(19:00):
built into them and these kindsof clauses are fairly common in
zoning laws and houses and stuff.
So, like I said, you might haveheard it in a real estate and
you'll see this in regulations alot If piping was installed
prior to this or after that.
And those are all acknowledgingthe grandfathered status of the
infrastructure between thosestates and they are often part
of new regulatory packages asthey get issued.
(19:21):
So if you issue something onMay 10th of 2024, it'll say
tanks in service after May 10thof 2024.
And then the next reg willstart when it's issued.
So if you take a tank out ofservice or designated as
permanently closed but there'snothing wrong with the tank,
let's say well, federal andstate regulations would treat
that tank as a brand new installif you decided you wanted to
(19:43):
pursue either the repairs orjust bringing the tank back into
service.
And keep in mind a lot ofpeople an in-service tank
requires frequent inspections,so sometimes people are tempted
to take a tank out of service toavoid those ongoing inspection
and maintenance costs.
If that tank is an older tank,you will lose your
grandfathering, and so there arequite a few tanks in this world
(20:03):
that are in service but notnecessarily being used for fuel
storage right now, because thefacility just does not want to
lose that grandfathered status.
Haley Hall (20:13):
Okay, I'm having trouble picturing this in my
mind.
Can we maybe get an example ofwhat this would look like?
Shannon Oelkers (20:19):
Yeah, and this is very complicated and we're
getting deep in the weeds here,Haley, but I do think it's
important to go through thisbecause there are consequences
to taking a tank out of serviceand I want to make sure all of
our listeners know what thoseconsequences are.
So imagine you have a tank thatwas constructed after World War
II.
It was built to an API 12Cstandard because API 650 wasn't
(20:39):
invented yet.
It was built directly on theground because that's what you
did in 1958.
And the tank is regularlyinspected under API 653.
It's been in use this wholetime.
It's stable, it's wellmaintained, it's not corroding.
In fact, you know steel isthicker in the old days.
So tank's actually pretty goodshape.
But it's been empty for acouple years.
(20:59):
Economics just don't, aren'tsupporting putting fuel in it
and you're having to pay for api653 every five and cleaning it
out.
It's a lot.
So you're like okay, you knowwhat, I don't want to deal with
this tank anymore.
And you take it out of service.
You play, you label it, youisolate it, but it's still
sitting there, right?
Well, a couple of years go by,economics change and all of a
(21:22):
sudden that tank is lookingreally appealing to you because
it's still in good condition.
It's still sitting there, right.
Maybe you want to put it backin service.
But now, under state and federalregs, you're going to have to
meet all of the currentrequirements for a modern tank
and there's a lot I mean you'dhave to do an engineered
foundation, full liner leakdetection, cathodic protection
(21:43):
and there's a host of otheradditions that I'm going to side
eye the EPA air regulations alittle on this one.
You're basically rebuilding anew tank and that gets really
expensive.
So I covered all of that, whichwas a lot and a little
confusing.
But I wanted to make sure thateverybody was aware that if you
have a tank and you're going totake it out of service and it's
(22:04):
not for a suitability forservice issue, you are going to
lose whatever protected statusand grandfathered status you've
got with that.
So it has to be taken intoconsideration.
Haley Hall (22:15):
Well, Shannon, thank you.
I learned something new todayabout grandpas.
Shannon Oelkers (22:19):
It's such a weird term.
Haley Hall (22:21):
I have no idea why I called that.
Shannon Oelkers (22:23):
Maybe some of our listeners who are lawyers
could enlighten us
Haley Hall (22:27):
Hopefully.
Well, I do have one lastquestion.
When you permanently close atank, do you need to update your
SPCC and your OD PCP, if thatapplies to you?
Shannon Oelkers (22:38):
Absolutely.
Anytime a tank is removed fromservice you'll need to amend all
your spill response plans toremove it from your active tank
list and then you want to adjustyour total storage volume down
for the facility.
But I will say, if the tank isgoing to remain on site it's a
good idea to still list the tankin your plan, but note that
it's permanently closed, withthe date either in your tank
(22:59):
table or, if you do an exemptcontainer table, put it there.
This is really helpful if thecoding fails and you've got
staff turnover.
It's nice to have the out ofservice date somewhere besides
on the tank itself, especiallyif you don't have a lot of
records.
Haley Hall (23:13):
Gotcha.
Well, I think it's time topermanently close this episode.
Do you have any last thoughtsor resources out there that you
could point the listeners to forfurther information?
Shannon Oelkers (23:23):
Well, there's not a whole lot of resources out
there for this.
The regulations that I read arethe bulk of it, but you could
if you wanted to.
In the 2013 EPA Guidance forRegional Inspectors, there's a
section 2.8.
And that section has a reallynice overview of what permanent
closure looks like, for tanks tobe exempt from inclusion in the
SPCC right, how to take it outof service.
(23:50):
And then it also addresses someother things like seasonal
closures under the SPCC and thedifferences in closure
requirements for oil storagetanks versus hazardous materials
tanks, and they're verydifferent.
So, dear listeners, if you havea hazardous material or
hazardous substance tank, likemethanol or solvent or something
like that, nothing I just saidin the last 30 minutes applies
to that hazardous substance tank.
There's a whole different RCRArequirements for hazardous
(24:12):
materials.
So just being aware that theserequirements for oil tanks are a
little different.
And then, lastly, if you wantHaley, I have a link to the
Grandfather Clause's Wikipediapage, which is great page which
is to go through it.
Haley Hall (24:25):
Perfect, I will definitely check that out.
But thank you so much, shannon.
I feel like I've learned a lottoday.
Shannon Oelkers (24:31):
It's such a funky little section of the regs
, but it becomes reallyimportant, especially when you
are looking at managing tankstorage.
Volume you know what tanks totake out of service and what to
do once they are out of service.
I appreciate the opportunity.
Haley, thanks everyone.
Volume you know what tanks totake out of service and what to
do once they are out of service.
I appreciate the opportunity.
Haley, thanks everyone.
Hi there, this is Shannon Olkersand, as the owner of Integrity
(24:51):
Environmental, I wanted to takea minute here at the end of the
podcast to make sure that youknew the following this podcast
is for informational purposesonly and should not be
considered legal or regulatoryadvice.
We are not responsible for anylosses, damages or liabilities
that may arise from the use ofthis podcast.
This podcast is not intended toreplace professional regulatory
(25:13):
or legal advice, and the viewsexpressed in this podcast may
not be those of the host thatwould be me or Integrity
Environmental.
Thank you very much forlistening and if you do need
professional regulatory advice,we'd be happy to help you as
part of our consulting services.
Welcome to Tank Talk with Integrity Environmental.
Join us as we sit down withfounder, principal consultant
and bulk fuel storage expert,Shannon Oelkers, to explore
regulations, safety andessential tips for navigating
the bulk fuel storage industry.
Join us as we explore theunique joys of work and life in
Alaska with industry experts,including our team, vendors we
(00:30):
work with and the companies wesupport.
Shannon, I'm curious whathappens to a tank at the end of
its life?
Shannon Oelkers (00:42):
What do you mean Haley?
Like when it's no longer useful, when it goes to that big tank
Heaven in the sky?
Haley Hall (00:49):
Yes, so I heard about a client of ours recently
taking a tank out of service,but I wondered exactly what that
meant.
Shannon Oelkers (00:56):
Oh, okay.
Well, out of service is alittle tricky, depending on what
regulation we're operatingunder.
Haley Hall (01:02):
Okay, so this term out of service.
It has different meanings underdifferent regulations?
Shannon Oelkers (01:07):
Yeah, it sure does, Just like everything we do
.
It cannot be just one simpleanswer.
Do you want me to bring it downfor you and maybe our listeners
to just go through?
Haley Hall (01:16):
Absolutely, where do we start?
Shannon Oelkers (01:18):
Okay?
Well, let's start first withthe difference between out of
service and permanently closed,because there is two terms for
what I would consider the samething.
First, permanently closed isused by 40 CFR 112.
And then, where a lot of ourlisteners are, in the state of
Alaska, the regulation 18 AAC 75uses the term out of service,
(01:40):
which is often shortened to OOS.
You may see that in otherplaces.
And then Haley, there's reallife where most people just call
tanks out of service or closed.
I swear almost nobody uses thepermanently closed term because
that's the EPA.
Bless their hearts.
They always like to picksomething.
Nobody uses.
Haley Hall (01:58):
So does the out of service or permanently closed
terminology just mean that thetank's empty?
Shannon Oelkers (02:03):
No, no, and we got to be careful about this
because empty does not correlateto closure status, and this is
a really important distinction.
Out of service or permanentlyclosed are terms that are from
the regulations that indicatethe tank's no longer in use, no
longer meets regulatoryrequirements or it doesn't meet
inspection criteria forcontinued service.
Lots of tanks are in servicebut kept empty for a bunch of
(02:27):
different operating factors likereduced usage during winter
months, economics.
They just don't need to use thetank because they're not buying
as much fuel.
It's tricky because if a tankhas been empty for a while,
there's a tendency for the yardoperators to just start saying
the tank's out of service.
But that's not correct.
In the eyes of the regulation,as long as the tank is being
(02:48):
routinely maintained andinspected, it's considered in
service, even if it's been emptyfor a while.
Haley Hall (02:53):
I'm getting the feeling that using the term out
of service should be done alittle bit more carefully.
Shannon Oelkers (02:57):
Yes, absolutely , because it carries great
regulatory weight.
Haley, If you were to have astate or federal inspector on
your facility and you casuallyreferred to a tank as out of
service, they would perk theirears up and want to know a lot
more if the tank was maybe inservice in your permitting.
So tanks that are consideredout of service have to meet
certain requirements and tanksthat are in service have to meet
(03:19):
certain requirements.
So even in death, the state andthe EPA want to say how your
tank is managed, which makes melaugh.
Haley Hall (03:29):
So which specific regulations impact a tank's
service status?
Shannon Oelkers (03:33):
It's a short and powerful list.
For most of the United States,Haley, it's just going to be 40
CFR 112.
But some states, like Alaska,have additional requirements.
If you qualify so in Alaskathat'd be 18 AAC 75.
And that's only if you storeover 420,000 gallons.
And we'll get to that later.
But maybe for the rest of thisdiscussion let's focus on the 40
CFR 112 and then bring thestate of Alaska in later, since
(03:56):
we have listeners all over theplace.
I do want to briefly mentionthat there are also very
specific regulations for theservice status of underground
storage tanks at the state andfederal level.
But I would really like to stayabove ground today.
That also could be its ownpodcast.
There's a lot there.
Haley Hall (04:13):
Got it, so leaving USTs buried for now.
Earlier you mentionedinspection standards.
Do they apply as well?
Shannon Oelkers (04:20):
They do, sort of.
So STI SP-001 and API 653,which are the two most commonly
used.
They both address when a tankis suitable for continued
service.
So the whole point of that isto determine if the tank is
suitable for continued service.
But they don't necessarily sayhow to indicate that a tank is
out of service.
(04:41):
They just tell you when to quitusing it.
Essentially, so all of theregulations about what to do
once a tank is taken out ofservice, they just tell you when
to quit using it.
Essentially so all of theregulations about what to do
once a tank is taken out ofservice fall under 40 CFR 112,
and then maybe some specificstate layers over the top of
that.
Haley Hall (04:53):
Yikes.
So this is getting way morecomplex than I even originally
thought.
Shannon Oelkers (04:57):
Yeah, don't worry, though, we'll break it
down.
For ease of this conversation,though, let's assume that we're
talking about a tank that doesneed to be permanently closed.
We're not all talk about tanksthat are in good condition that
we may not want to use anymore,but for now let's say that it
had an inspection.
The inspector found a fatalflaw, horrible corrosion, a
through thickness hole,something bad enough that it's
(05:18):
not coming back.
The repair just does not makeany financial sense.
Once you've decided that a tankis going to go out of service
at your facility, the 40 CFR 112regulations kick in, and there
are now two pathways before us.
You can take it out of serviceand leave it in place, or you
can take it out of service andremove it.
Haley Hall (05:36):
Shannon, I have a feeling that in Alaska the tanks
get left in place way moreoften, and in the Pacific
Northwest the tanks get removedmore often.
Shannon Oelkers (05:44):
You would be correct, and that's just a
logistics function In the lower48, it's a lot easier to get
somebody with a welding crew anda cutting crew and cranes and
telehandlers and all that stuffto remove the tank out of there
In Alaska.
That's a very expensiveproposition.
So we definitely see a lot morein-place, out-of-service tanks
up here in Alaska.
Haley Hall (06:05):
Well, let's just start with the first part.
What do the regulations requirefor a tank that is taken out of
service?
Shannon Oelkers (06:11):
So 40 CFR 112 has a section two with
definitions, and in that sectionit talks about permanently
closed as any container orfacility for which, one, all
liquid and sludge has beenremoved from each container and
connecting line, and, two, allconnecting lines andudge has
been removed from each containerand connecting line, and two,
all connecting lines and pipinghave been disconnected from the
container and blanked off.
All valves, except forventilation valves, have been
(06:31):
closed and locked, andconspicuous signs have been
posted on each container statingthat it is a permanently closed
container and noting the dateof closure.
Haley Hall (06:40):
Okay, so that seems pretty straightforward.
What about removing the tank?
Do they just haul it off, maybetoss it off a cliff?
Shannon Oelkers (06:49):
It's almost like a trick question.
If a tank that was in your SPCCplan is removed, you have to
show documentation that it wasremoved in accordance with the
definition that I just read.
So you have to keep recordsfrom your contractor showing
that all sludge and liquids wereremoved from the tank and the
connecting lines and documentingwhere the tank was disposed of.
So when you hire thatcontractor you're going to want
(07:11):
to make sure that they areprepared to provide a report
that shows the date the tank wascleaned, the method, the date
of disposal and the locationthat the tank was taken to for
disposal.
So you can't throw it off acliff, because that's not going
to be a good answer.
Haley Hall (07:23):
Darn
Shannon Oelkers (07:24):
I know, I know, I know Some tanks I would love
to throw off a cliff.
They're just a difficult thing.
So just giving you like a plainEnglish answer, a compliant
report would say something likethis On June 8th, super
contractor crew drew down allremaining liquids from the tank
and associated piping Hot wateror dry wings were used to remove
(07:45):
any remaining oily residue.
All liquids were disposed of atthe local water treatment
facility in accordance with ourtotally compliant waste
management plan and a tank washauled to the local metals
landfill for disposal on June9th and it should have a photo
log of the tank being cleanedand removed and then any piping
that was connected to that tankthat still remains at your
facility should have a blindflange on it.
Haley Hall (08:06):
Oh, why do I get the feeling like this doesn't
happen very often.
Shannon Oelkers (08:09):
Because it doesn't.
I mean the work happens, butthe contractors aren't usually
asked to provide a report likethis and there isn't really a
requirement for that reportother than you must comply with
your SPCC requirements.
So hopefully everyone listeningto this will remember to ask
for a report like this in thedeliverables the next time they
do a project like this to take atank out of service.
(08:31):
It does not have to becomplicated or long, it just
needs to be a memo addressingthe important bits with
supporting photos.
You can even make your ownreport if the contractor just is
not capable or willing to do it.
But if you take it out ofservice and then you're getting
a federal inspection a few yearslater, they will literally ask
where are your records fortaking this tank out of service?
(08:52):
Because what they're worriedabout is that you did throw that
tank off a cliff and they wantto know where it went and is it
polluting the environmentanymore?
Haley Hall (08:59):
That makes sense.
Well, that covers destruction.
What about the ones remainingin place?
Shannon Oelkers (09:05):
Well, that covers destruction.
What about the ones remainingin place?
Okay, well, let's go back to 40CFR, 112.
And that definition.
There was some additionalrequirements that I read about
tanks and this also applies topipelines, by the way, that are
buried, that are left in placebut taken out of service.
So let's go back and remember.
There was a second part thatsaid all connecting lines and
piping have been disconnectedfrom the container and blanked
off.
All the valves have been closedand locked, except for
(09:26):
ventilation valves, and thenconspicuous signs have been
posted on each container statingthat it is a permanently closed
container and noting the dateof closure.
This means the tank has to havesigns stating that it's
permanently closed.
You got to put that date ofclosure on it and that sounds
easy enough, and it is the dayyou take it out of service.
But remember, these tanks areoutside right, so the signage
(09:50):
can fall off, it can fade orpeel as coatings fail.
And the key part aboutpermanently closed tanks is that
you have to have documentationof the first part as well, the
part where you remove theliquids and sludge, and then you
have to maintain the signs andthe isolation of the second part
, the liquids and sludge, andthen you have to maintain the
signs and the isolation of thesecond part.
So, folks, the epa requires usto maintain tanks even in death.
It's a super useful requirement, though, hayley, because unless
(10:16):
the tank is labeled like, howdo you know if it's out of
service or just not beingmaintained correctly?
And I think that's why the epahas such specific language about
this, because it's easy to belike oh yeah, that tank's out of
service, but if you open it upand there's fuel in it and it's
not isolated and it's notlabeled, is it out of service?
So it's a mechanism for theregulation to be like is this
(10:37):
tank something we're going toregulate or not?
Haley Hall (10:39):
Right, that makes sense.
Well, are there commoncompliance issues with
maintaining the permanentlyclosed or out of service status
of a tank or a pipeline?
Shannon Oelkers (10:49):
Yeah, yeah, there are.
I can just go over a few ofthem if you want me to right now
.
Haley Hall (10:53):
Yeah.
Shannon Oelkers (10:53):
Okay, I mentioned the big one already
label failure.
It just fades, peels, falls off.
The second biggest one isfailing to keep records of the
removal of liquids or sludge,like they did it, but they
didn't keep any evidence of itor a statement or a memo or
anything.
And then the next one is thatthey did not remove the liquids
or the sludge.
You open the tank up andthere's still junk in the bottom
(11:14):
.
And as a side note on this one,especially for buried pipelines,
which kind of applies to thiswhole conversation, we have
definitely seen in our historyin integrity, where lines that
have been taken out of service,especially more complex ones,
there's lots of low points,especially older lines.
There's a lot of fuel that isentrained in, like the walls of
(11:34):
the piping, and so they may havetaken it out of service and
drained it down, but 10 or 20years later there's fuel that's
relaxed out of the steel ormaybe it was trapped in a low
point, and so we have seen tanksand piping that were cleaned
but then 10 or 20 years laterthere's some junk that has just
come out of different places inthe tank or the piping.
(11:54):
So I do want to say thatsometimes that failure to remove
all liquids or sludge is notnecessarily like it can happen
anyway, even if you do it allright, I guess.
So you do want to kind of takea peek in there every once in a
while and make sure nothing'sbuilding up.
And then there's just a couplemore common ones just failing to
isolate the tank or pipingsegment properly.
The most common version of thisis that it's in line with an
(12:15):
active piping system and theyclose the valve but they don't
physically isolate the tank andover time that valve degrades
and you can get a leakinternally.
So the fuel is moving from oneside of the valve to the other
within the pipeline it's notoutside of the pipeline and that
tank can slowly fill up withfuel because it's getting fuel
every time the pipeline'spressurized A little bit gets
into the tank.
(12:36):
That isolation failure is notas common as the others, but it
does happen.
And then this one's supercommon a buried pipeline that's
been capped off and taken out ofservice isn't labeled at all,
so nobody knows what it is whereit goes when it was taken out
of service.
Lots of surprises.
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Haley Hall (13:35):
Shannon, so far we've talked about 40 CFR 112,
which applies across the US, butyou also mentioned 18 AAC 75.
What does that regulation haveto say about service?
Shannon Oelkers (13:47):
Okay, so that one only applies to facilities
within the state of Alaska thatstore over 420,000 gallons of
fuel.
So start there.
So if you're listening to thisand your facility does not meet
these requirements, you can turnthe podcast off now or skip
ahead.
We've got more stuff at the end.
You want to hear.
So this regulation, there's twodifferent sections.
This one specifically hasservice or out of service
(14:09):
requirements for tanks and thenanother one for piping.
So I'll start with the piping.
It's the regulation for thoseof you who like to look these
things up on your own is 18 AEC75-75-080-O and it states that
the owner or operator of afacility oil piping that is
removed from service for morethan one year and that for more
than one year is important andthat again maybe could be
(14:32):
another podcast Ensure that thefacility oil piping is free of
accumulated oil identified as toorigin, marked on the exterior
with the words out of serviceand the date taken out of
service.
Okay, so what does the state ofAlaska say about tanks?
(14:56):
Almost the same thing by thissubsection are completed.
Haley Hall (14:59):
Okay, so what does the state of Alaska say about
tanks?
Shannon Oelkers (15:04):
Almost the same thing but a little bit
different.
So I will say the state ofAlaska addresses both shop built
and field constructed tanks intheir regulations, but the out
of service piece is only foundin the field erected section of
the 18AC-75.
I believe that's because yourhorizontals, or the shot belts,
(15:27):
they're going to be covered byyour SPCC regulations already.
So the state chose to focus onthe larger tanks.
So for field-constructed tanksthat's 18AC-75-065, also O,
because the state likes to beneat and tidy like that.
A field-constructedabove-ground oil storage tank
removed from service for morethan one year must be free of
accumulated oil, marked with thewords out of service and the
(15:48):
date taken out of service,secured in a manner to prevent
unauthorized use, and otherwiseblank-flanged or otherwise
disconnected from facilitypiping.
The owner or operator shallnotify the department when a
tank is removed from service andwhen the actions required by
the subsection are completed.
And then they have an additionthat says in this subsection
removed from service means notin regular use for the service
(16:09):
intended and not included in aregular maintenance and
inspection program in accordancewith this section.
Haley Hall (16:15):
Wow Well this might be silly, but we've heard the
two terms there's permanentlyclosed and out of service.
Do you have to label the tanksor piping with both of those
terms?
Shannon Oelkers (16:26):
That's not silly, but I'm imagining the
stencil for permanently closedwould be ridiculously long.
For most facilities using thelabel permanently closed is
sufficient because we're tryingto meet 40 CFR 112.
I do see a lot of out ofservice stencils.
Almost everybody uses out ofservice.
But I feel like the regulationit does require labeling saying
(16:47):
it's permanently closed orindicating that it's permanently
closed.
But if you operate within thestate of Alaska and have that
larger facility, the state'spretty specific that you need to
label it as out of service.
I haven't seen the state or theEPA go down that road of
pettiness yet, but if you wantedto be extra compliant, extra,
extra compliant, I wouldprobably just slap both of them
(17:08):
out there, create the stencilonce and then just keep
reapplying it every couple years.
What both regulations areconsistent about, though, across
the board, is that you have toinclude the date taken out of
service and the origin if it'spiping.
And just a note on origin forpiping if you have piping that's
(17:28):
buried between a marine headerand tank farm and you're going
to take it out of service andcap it where the pipe daylights,
so where it comes up aboveground, you need to label it
with the end location at theother end.
So if you're standing at themarine header, it needs to say
tank farm, and if it's fororigin, and if you're standing
at the tank farm, it needs tosay marine header, and the
(17:51):
reason for that is where you arestanding.
Clearly, that's where the pipestarts, but you need to know
where it goes, and so I haveseen quite a few that just say
tank farm at the tank farm andI'm like, well, yes, I know on
origin.
And then Haley, I do want totalk about something we have to
(18:11):
talk about grandfathering.
If we're going to talk aboutout of service.
Haley Hall (18:15):
Did you just say grandfathering?
What on earth does grandpa haveto do with tanks?
Shannon Oelkers (18:19):
okay.
So it's a weird, a weird term.
I know it's weird.
It's used in multiple ways.
It's really common in realestate as well.
In general, grandfathering is aterm for a facility component
that was compliant at the timeit was installed.
And keep in mind we work withtanks from every decade that are
still in service, from 1914 allthe way to last year.
(18:39):
So we have lots of differentinstallation dates.
It's not like every tank wasinstalled in the 70s or
something.
As these regulations change,they create grandfathered
infrastructure where if a tankis in continuous service it does
not need to meet modernrequirements for leak detection,
foundation style gauging etc.
So both federal and stateregulations have grandfathering
(19:00):
built into them and these kindsof clauses are fairly common in
zoning laws and houses and stuff.
So, like I said, you might haveheard it in a real estate and
you'll see this in regulations alot If piping was installed
prior to this or after that.
And those are all acknowledgingthe grandfathered status of the
infrastructure between thosestates and they are often part
of new regulatory packages asthey get issued.
(19:21):
So if you issue something onMay 10th of 2024, it'll say
tanks in service after May 10thof 2024.
And then the next reg willstart when it's issued.
So if you take a tank out ofservice or designated as
permanently closed but there'snothing wrong with the tank,
let's say well, federal andstate regulations would treat
that tank as a brand new installif you decided you wanted to
(19:43):
pursue either the repairs orjust bringing the tank back into
service.
And keep in mind a lot ofpeople an in-service tank
requires frequent inspections,so sometimes people are tempted
to take a tank out of service toavoid those ongoing inspection
and maintenance costs.
If that tank is an older tank,you will lose your
grandfathering, and so there arequite a few tanks in this world
(20:03):
that are in service but notnecessarily being used for fuel
storage right now, because thefacility just does not want to
lose that grandfathered status.
Haley Hall (20:13):
Okay, I'm having trouble picturing this in my
mind.
Can we maybe get an example ofwhat this would look like?
Shannon Oelkers (20:19):
Yeah, and this is very complicated and we're
getting deep in the weeds here,Haley, but I do think it's
important to go through thisbecause there are consequences
to taking a tank out of serviceand I want to make sure all of
our listeners know what thoseconsequences are.
So imagine you have a tank thatwas constructed after World War
II.
It was built to an API 12Cstandard because API 650 wasn't
(20:39):
invented yet.
It was built directly on theground because that's what you
did in 1958.
And the tank is regularlyinspected under API 653.
It's been in use this wholetime.
It's stable, it's wellmaintained, it's not corroding.
In fact, you know steel isthicker in the old days.
So tank's actually pretty goodshape.
But it's been empty for acouple years.
(20:59):
Economics just don't, aren'tsupporting putting fuel in it
and you're having to pay for api653 every five and cleaning it
out.
It's a lot.
So you're like okay, you knowwhat, I don't want to deal with
this tank anymore.
And you take it out of service.
You play, you label it, youisolate it, but it's still
sitting there, right?
Well, a couple of years go by,economics change and all of a
(21:22):
sudden that tank is lookingreally appealing to you because
it's still in good condition.
It's still sitting there, right.
Maybe you want to put it backin service.
But now, under state and federalregs, you're going to have to
meet all of the currentrequirements for a modern tank
and there's a lot I mean you'dhave to do an engineered
foundation, full liner leakdetection, cathodic protection
(21:43):
and there's a host of otheradditions that I'm going to side
eye the EPA air regulations alittle on this one.
You're basically rebuilding anew tank and that gets really
expensive.
So I covered all of that, whichwas a lot and a little
confusing.
But I wanted to make sure thateverybody was aware that if you
have a tank and you're going totake it out of service and it's
(22:04):
not for a suitability forservice issue, you are going to
lose whatever protected statusand grandfathered status you've
got with that.
So it has to be taken intoconsideration.
Haley Hall (22:15):
Well, Shannon, thank you.
I learned something new todayabout grandpas.
Shannon Oelkers (22:19):
It's such a weird term.
Haley Hall (22:21):
I have no idea why I called that.
Shannon Oelkers (22:23):
Maybe some of our listeners who are lawyers
could enlighten us
Haley Hall (22:27):
Hopefully.
Well, I do have one lastquestion.
When you permanently close atank, do you need to update your
SPCC and your OD PCP, if thatapplies to you?
Shannon Oelkers (22:38):
Absolutely.
Anytime a tank is removed fromservice you'll need to amend all
your spill response plans toremove it from your active tank
list and then you want to adjustyour total storage volume down
for the facility.
But I will say, if the tank isgoing to remain on site it's a
good idea to still list the tankin your plan, but note that
it's permanently closed, withthe date either in your tank
(22:59):
table or, if you do an exemptcontainer table, put it there.
This is really helpful if thecoding fails and you've got
staff turnover.
It's nice to have the out ofservice date somewhere besides
on the tank itself, especiallyif you don't have a lot of
records.
Haley Hall (23:13):
Gotcha.
Well, I think it's time topermanently close this episode.
Do you have any last thoughtsor resources out there that you
could point the listeners to forfurther information?
Shannon Oelkers (23:23):
Well, there's not a whole lot of resources out
there for this.
The regulations that I read arethe bulk of it, but you could
if you wanted to.
In the 2013 EPA Guidance forRegional Inspectors, there's a
section 2.8.
And that section has a reallynice overview of what permanent
closure looks like, for tanks tobe exempt from inclusion in the
SPCC right, how to take it outof service.
(23:50):
And then it also addresses someother things like seasonal
closures under the SPCC and thedifferences in closure
requirements for oil storagetanks versus hazardous materials
tanks, and they're verydifferent.
So, dear listeners, if you havea hazardous material or
hazardous substance tank, likemethanol or solvent or something
like that, nothing I just saidin the last 30 minutes applies
to that hazardous substance tank.
There's a whole different RCRArequirements for hazardous
(24:12):
materials.
So just being aware that theserequirements for oil tanks are a
little different.
And then, lastly, if you wantHaley, I have a link to the
Grandfather Clause's Wikipediapage, which is great page which
is to go through it.
Haley Hall (24:25):
Perfect, I will definitely check that out.
But thank you so much, shannon.
I feel like I've learned a lottoday.
Shannon Oelkers (24:31):
It's such a funky little section of the regs
, but it becomes reallyimportant, especially when you
are looking at managing tankstorage.
Volume you know what tanks totake out of service and what to
do once they are out of service.
I appreciate the opportunity.
Haley, thanks everyone.
Volume you know what tanks totake out of service and what to
do once they are out of service.
I appreciate the opportunity.
Haley, thanks everyone.
Hi there, this is Shannon Olkersand, as the owner of Integrity
(24:51):
Environmental, I wanted to takea minute here at the end of the
podcast to make sure that youknew the following this podcast
is for informational purposesonly and should not be
considered legal or regulatoryadvice.
We are not responsible for anylosses, damages or liabilities
that may arise from the use ofthis podcast.
This podcast is not intended toreplace professional regulatory
(25:13):
or legal advice, and the viewsexpressed in this podcast may
not be those of the host thatwould be me or Integrity
Environmental.
Thank you very much forlistening and if you do need
professional regulatory advice,we'd be happy to help you as
part of our consulting services.
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