Replace USTs or Switch to Electric? Here is what you need to know
Replace USTs or Switch to Electric?
A client said, “My tanks need upgrading, have increasing maintenance costs and will soon be out of warranty. I really do not want to replace them but if I delay, they could end up leaking – and I could go broke cleaning up the environmental damage. Do I bite the bullet and replace the tanks? Should I just get rid of the tanks and have my people use a gas station? Should I think about switching to electric vehicles? Is the technology even there yet? What should I do?”
I replied, “These are all great questions, let’s review your options.”
Replacing USTs
Underground storage tanks (USTs) are a major investment in equipment, maintenance costs, and environmental risk. As many tanks are scheduled to reach the end of the warranted service life in the next 10 years, owners have to decide if the convenience of having tanks is worth the expense and risk. Owners also have to consider whether changes in technology (transition from combustion engines to electric motors) will make an investment in new tanks obsolete.
Pros of replacing tanks
- Bulk fuel delivery discounts
- Employee convenience and time savings
- Reduced maintenance costs
- New tank systems have state of the art environmental protection systems
- Double or triple wall tanks
- Improved construction materials
- Continuous monitoring systems
- New technology
Cons of replacing tanks
- Major investment in equipment and construction costs
- Still have ongoing maintenance costs
- Ongoing regulatory compliance costs
- Periodic testing
- Registrations
- Inspections
- Inventory management
- Unknown regulatory changes
- Possible obsolescence if electric vehicles are perfected
Removing USTs
Regardless of whether or not you replace your tanks, the old tanks will still have to be removed. Tank removal is highly regulated and potentially very dangerous if proper procedures are not followed. UST owners should engage an expert to plan the removal process. Important considerations include:
- State and local government notifications
- Required contractor certifications
- Closure sampling and reporting requirements
- Contaminated soil disposal
- Potential environmental remediation
For more detailed information on UST removal, read this article Understanding the Underground Storage Tank Removal Process.
Alternatively Fueled Vehicles
The technology for electric or alternatively fueled (ex. hydrogen) vehicles is advancing rapidly. Tesla reportedly sold over 900,000 electric vehicles in 2021. There are over 1.2M pre-orders for Tesla’s new Cybertruck. GM CEO Mary Barra predicts that by 2025 GM will sell more electric vehicles than Tesla and will achieve their goal of only making electric passenger vehicles by 2035.
Given that new fiberglass tanks are expected to have a 30-40 year lifespan, alternate fuel technology may dictate that USTs will become obsolete long before their useful lifespan.
Questions both business owners and government agencies must ask:
- Is the convenience of having our own tanks worth the expense of maintaining, upgrading, or replacing the tanks?
- Is the convenience of having our own tanks worth the environmental risk?
- Are we going to end up moving to electric or alternative fuels (ex. hydrogen) and our investment in USTs will become obsolete; and if so, what do we do in the meantime?
Interim Fueling Alternatives
A CEO of a local company told me he had a similar dilemma:
- Old tanks that needed to be replaced
- No budget to replace existing diesel and gasoline tanks
- Low environmental risk tolerance
- Large fleet of vehicles (sedans to small box trucks) on the road every day
- Uncertainty of what fuel the fleet would use in 10-30 years
His company could not simply replace their fleet with electric vehicles. There was neither the budget for nor the availability of vehicles that could meet load, range, and battery life requirements. In the interim they elected remove their tanks, keep their existing fleet, and refuel at local service stations.
The main problem with refueling at service stations is a marked drop in productivity. An assessment of their refueling procedures revealed that refueling at service stations cost them an additional 20 minutes/employee/day!
The company then switched to a mobile, after-hours refueling service. A small tanker comes to the business at night and refuels all the vehicles. There are many mobile, fleet refueling services in major metropolitan areas (ex. boosterusa.com). For this particular situation, mobile fleet refueling met their requirements.
Key Take Aways
Every situation is different. The convenience, bulk fuel discounts and time savings realized by having your own tanks may make good business sense. On the other hand, the cost of tank replacement combined with environmental regulatory challenges and new transportation technology on the horizon may justify consideration of alternative scenarios.
If you need help with costing out the various alternatives, contact our team for assistance.
About the author: Allan Blanchard leads Ambipar’s technical group in the US. He and his team of Geologists, Engineers, Environmental Scientists and Technicians specialize in UST removal and rehabilitation of properties contaminated with petroleum and other hazardous chemicals.
