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 Buying a Property with Underground Fuel Tanks

 

Underground fuel tanks (or underground petroleum storage systems - UPSSs) are regulated under the Environmental Management and Pollution Control (Underground Petroleum Storage Systems) Regulations 2010 (UPSS Regulations).

If you purchase a site that has a UPSS, Regulation 7(1) states that a new landowner becomes the infrastructure owner by virtue of the storage system being a fixture on the land. So if you purchase a property with tanks (whether they are in use or not) you may become liable for existing pollution both on the land and associated with the activities on the land, and/or you may be liable for the decommissioning of existing infrastructure.

The following information is intended to assist in your decision making and understanding of your obligations in purchasing a property with underground fuel tanks. The information provided is not to be considered legal advice. It is recommended that you seek independent legal advice in relation to environmental issues prior to any purchase.

Under the Environmental Management and Pollution Control Act 1994 (EMPCA) the polluter is the first person held responsible for any investigations, remediation works etc on a site. If contamination which poses a risk to the environment or human health is identified BEFORE YOU USE the fuel infrastructure, then the previous owner is the person we would deal with in the first instance. However, ONCE YOU USE the fuel tanks then you may be considered the polluter. IN ADDITION to this, if the polluter cannot be found, has passed away or is bankrupt, then you may, as the landowner, become responsible for the works even if you don't use the fuel tanks.

There are no legal requirements for the testing of infrastructure for leaks; or of the environment (soil or groundwater) for contamination on the sale of a property. However, it is highly recommended to carry out such tests because if contamination is found at a later date it is very difficult to determine whether the leakage/contamination occurred prior to, or after you took over the property.

The Contaminated Sites Unit recommends that an environmental site assessment (ESA) be conducted on any property that contains underground fuel tanks prior to purchase. The ESA should assess all areas of the site for a range of pollutants applicable to the activities that occurred on the site, in locations where contamination may have occurred (from spills, storage of fuel/oil, dumping of oil etc) not just the area in the vicinity of the UPSS (tanks, lines, fill points, bowsers).  The assessment would need to be done by an environmental consultant (see http://epa.tas.gov.au/regulation/engaging-a-contaminated-land-consultant). It is important that the consultant concludes whether the site is suitable for the proposed purpose (eg ongoing use, residential etc) and whether any contamination detected on the site is causing or likely to cause environmental harm. Based on the result of this assessment you could determine whether you want to proceed with the purchase of the property.

If environmental harm is occurring or is likely to occur then the Director can issue an Investigation Notice, Remediation Notice or Site Management Notice under EMPCA. Information is available at: Contaminated Site Assessment and Regulation of Contaminated Land.

Workplace Standards Tasmania (WST) may also have requirements regarding safety and technical issues for UPSSs. For further information in relation to these issue it is recommend that you contact WST on 1300 366 322 (within Tasmania) or (03) 6233 7657.  

Currently Active Site

If the property is an active service station, it may also be worthwhile having the underground petroleum storage systems (UPSS) integrity tested (to check for current leaks).

In addition, under the Environmental Management and Pollution Control (Underground Petroleum Storage Systems) Regulations 2010 (UPSS Regulations) the operator of the site must conduct loss monitoring, so ask the current operator if you can view these documents. Please note that the loss monitoring required under the regulations only has to detect leaks above approximately 18L per day and it is less sensitive than an integrity test. The integrity test should detect smaller leaks (must be able to detect a leak greater than approximately 9L per day).

Continue Using the Active/operational UPSSs

For an active/operational UPSS (defined in the Regulations as a UPSS that was in use on 31 March 2010 or has been in use since), management of the storage system must comply with all aspects of the UPSS Regulations, including registering the new system operator and infrastructure owner, loss-monitoring, and decommissioning if the tanks cease to be used. Further information for owners and operators of UPSSs is available by clicking here.

If the UPSS have been temporarily decommissioned, an equipment integrity test must be conducted and the UPSS must pass the test prior to it returning to use. You must then operate the UPSS in compliance with the UPSS Regulations.

If you do not use all the tanks, then the remaining tanks that were in use after 30 March 2010 will need to be decommissioned.

Reinstate Abandoned UPSSs

An abandoned storage system is defined in the Regulations as a UPSS that was not in use on 31 March 2010 or has not been used since. If you intend to use an abandoned storage system, an equipment integrity test must be conducted and the UPSS must pass the test prior to it returning to use. You must also register the system with the EPA Division. Once a UPSS is in use you must comply with all the requirements under the UPSS Regulations for active/operational UPSSs.

Redevelopment –

  • Where the site is currently active; or
  • where the tanks are already decommissioned, or will be decommissioned; or
  • where the tanks are abandoned (such as a disused service station)

Any planned redevelopment of the site should be discussed with the relevant local council. The decommissioning requirements in the UPSS Regulations only address contamination issues in the immediate vicinity of the UPSS.  On a service station site there may also be surface spills, workshop activities etc that may have contaminated other areas of the site. As such the UPSS Decommissioning Report does not represent a complete environmental site assessment. Should the site be redeveloped or a land use change be proposed, the Planning Authority may require a full site assessment as part of a Development Application. In this case, while the information in the Decommissioning Report may be relevant, the remainder of the site may need to be assessed to ensure that it is suitable for its intended use. Further information is available on the Contaminated Land and the Planning Process web page.

Decommissioning UPSS

If there are UPSS on the site that you intend to purchase and you do not want to use the UPSS, then decommissioning of these UPSS should be considered as part of your purchase.

If you decide that a UPSS is to be decommissioned, you must adhere to the decommissioning requirements of the UPSS Regulations. The requirements include an environmental consultant taking soil (and potentially groundwater) samples in the vicinity of the UPSS to determine whether the storage system has leaked and whether any leaks are posing a risk to the environment and/or human health. Decommissioning can be an expensive exercise and it is recommended that you seek legal advice about this. In addition, if the decommissioning assessment determines that a storage system has leaked and contamination exists that is posing a risk, you as the landowner may be liable for further investigation and/or cleanup of the contamination. These investigations and cleanup expenses can also be very costly. It is also worth noting that fuel contamination can travel significant distances in groundwater.

While there are no requirements under the UPSS Regulations to decommission an abandoned storage system, it is recommended that abandoned storage systems be decommissioned where possible to ensure that environmental harm isn't occurring. If you do decide to decommission an abandoned storage system, then you must comply with the standard decommissioning requirements as stated above.

There are also a number of circumstances where you may need to decommission a UPSS, including (but not limited to):

  • A purchaser may require this as a condition of sale;
  • The local Planning Authority may require this before approving changes in land use or site redevelopment; or
  • Your financial institution may require this before lending money to purchase a property.

    Past Contamination History

    The EPA Division maintains a number of databases including:
  • The Contaminated Sites Unit database for records of land and water contamination;
  • The Environmentally Relevant Land Use Register (ERLUR) for selected potentially contaminating activities that may have been historically (prior to 1992) undertaken;
  • The Underground Petroleum Storage System (UPSS) database for records of UPSS;
  • The New Environmental Licensing and Monitoring System (NELMS) database for permits or notices that may have been issued (i.e. sites the EPA Division regulates); and
  • The Incidents & Complaints database for any records of complaints or notification of incidents received by the EPA Division.

    A member of the public can submit a Property Information Request (PIR) to have the above-mentioned databases searched for records in relation to a particular property.  This information is often useful to potential purchasers of a property who want to determine if there are any known environmental issues relating to a property prior to purchasing the site. However, it should be noted that there are limitations to the information that a PIR search may provide – please see the PIR bulletin (link above) for more information.
 

Contaminated Sites Unit
134 Macquarie Street
Hobart TAS 7000
Phone: 03 6165 4599 Fax: 03 6173 0254
Email: EnvironmentEnquiries@environment.tas.gov.au