published Sunday, January 30th, 2011

Gov. Bill Haslam freezes rule change that affects Pilot

  • photo
    Gov. Bill Haslam listens to a question during his first news conference on Wednesday in Nashville. (AP Photo/Mark Humphrey)

NASHVILLE -- Gov. Bill Haslam says he didn't know his freeze on new state regulations delayed a proposed environmental rule affecting his family's convenience stores and truck stops.

The would-be rule directs businesses and local governments to replace single-walled underground fuel storage tanks installed before July 2007 with double-walled tanks if they are used to dispense fuel blends with more than 10 percent ethanol.

Haslam announced the 45-day freeze on new regulations four days after taking office Jan. 15, part of his promised "top to bottom review" of state government. The freeze affects dozens of proposed rules.

"In our commitment to transparency, it is critical that we weigh the benefits of a rule or regulation to consumers along with the cost of impacting jobs," Haslam said when announcing the freeze.

Speaking later to the Chattanooga Times Free Press, Haslam said the freeze was not implemented with his family's Pilot Corp. in mind. The privately held company, in which Haslam holds an unspecified share, owns Pilot convenience stores and is the majority stakeholder in Pilot Flying J truck stops.

"When we put that [freeze] in place I couldn't have told you one rule that was in the pipeline," Haslam said in a recent interview. "Since that time I've learned about two or three. You telling me that [about underground tanks] is honestly the first time I've heard it."

He said he'd also heard about another rule that would increase environmental fees on businesses. The fees are supposed to cover the costs of regulation.

"I said, 'Well that's fair, [but] let's first make certain we're doing everything we can to control the costs of regulating before we raise the fee,'" Haslam said. "Now, we might have to do that. But my job first of all is to say, 'Are we holding our costs down before we raise that business' cost?'"

Officials last week didn't have a firm figure for the number of proposed rules affected.

The Department of Environment and Conservation's Division of Underground Storage Tanks proposed the tank regulation in November. A hearing was held Jan. 20.

TDEC staff cited a federal push to raise the percentage of ethanol in gasoline blends from 10 percent to 15 percent, called E15.

"There are currently no specific rules for the storage of E15 in Tennessee," agency spokeswoman Tisha Calabrese-Benton said in an e-mail.

She said the division has found that the higher ethanol content "can be corrosive to some systems" and could result in tank leaks. But the department believes the regulation freeze is appropriate, she said.

Opposing the tank-replacement rule are grocery and convenience stores, county highway officials, some equipment manufacturers and the Tennessee Farm Bureau.

They point out that E15 likely won't be legal for at least a year and suggest awaiting guidance from the U.S. Environmental Protection Agency and other groups.

Remarks by Calloway Oil Co. CEO Marty Calloway of Maryville, Tenn., in the record of the January hearing say the proposed rule could impose costs as high as $615 million if businesses and local government agencies are forced to replace single-walled tanks in one fell swoop.

Citing state figures, Calloway said 13,682 of the estimated 16,250 underground storage tanks in Tennessee are single-walled. Replacing them would cost about $45,000 each, he said.

Some critics cited impacts on "mom and pop" service stations and stores.

During his 2010 campaign, Haslam, a Republican, was repeatedly criticized by GOP primary foes and Democratic rival Mike McWherter over potential conflicts regarding Pilot in areas ranging from the environment to lottery tickets, which Pilot sells.

Dick Williams of Common Cause Tennessee, a public watchdog group, called the freeze's impact on Pilot "an example of things I'm sure are going to come up again."

"I don't necessarily draw the conclusion it's inappropriate, but I think it's a clear example ... that anyone with significant interests in his position are in a position to affect those interests whether that's their goal or not," Williams said.

John McFadden, executive director of the Tennessee Environmental Council, said leaking fuel tanks are a threat to groundwater.

"For anybody who's storing hazardous substances or chemicals in the ground, all it takes is for your groundwater in your well to get contaminated one time to understand the value of an underground tank," he said.

Haslam said in the interview he didn't think the rule affected Pilot a great deal because the company already has been double-walling its tanks. But the governor stressed he wasn't entirely certain that was the case.

On Friday, TDEC provided figures showing that at Pilot Flying J, 80 tanks are double-walled while 62 are single-walled.

At Pilot's convenience stores, 63 tanks are double-walled while 87 are single-walled, according to TDEC.

Pilot spokeswoman Cynthia Moxley said in response to e-mails that requiring double-walled tanks for blends with more than 10 percent ethanol "would discourage current providers and prospective providers from increasing the availability of this fuel product."

"It is important to note that the products containing a percentage of alcohol are actually less harmful to the environment in the event of a leakage than is gasoline. We do not feel this is necessary," Moxley said.

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550.

about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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dendod said...

I don't buy gas with ethanol. Ethanol is driving the cost of food through the roof. Before long a box of Corn Flakes will cost $7.00 and fuel for the car will still be high. Wake up America. You're being taken to the cleaners by the "tree huggers".

January 30, 2011 at 7:18 a.m.
acerigger said...

"The Department of Environment and Conservation's Division of Underground Storage Tanks proposed the tank regulation in November. A hearing was held Jan. 20."

"When we put that [freeze] in place I couldn't have told you one rule that was in the pipeline," Haslam said in a recent interview. "Since that time I've learned about two or three. You telling me that [about underground tanks] is honestly the first time I've heard it."

This story is too ridiculous for words! How stupid do they think we are? Do the people of Tennessee buy this claim ?

The Haslam administration is not yet a month old, but it appears to be shaping up to become another costly and embarrassing fiasco for our state. I can only hope that someone in authority is watching.

January 30, 2011 at 8:42 a.m.
Yano said...

It's not the tree-huggers pushing ethanol, it's the farmers.

January 30, 2011 at 9:19 a.m.
jpo3136 said...

Ethanol and ethanol-related compounds have been in gasoline since 1975. The PR campaign against ethanol is a PR ploy from petroleum businesses.

It's not the substance, but the profitability for Big Oil that makes ethanol a politically volatile topic.

The reason why Big Oil is opposed to ethanol? It doesn't come from petroleum. MTBE, a chemically similar compound which does the same thing, is manufactured from natural gas. That additive can be made from Big Oil's wells and refineries.

In the 1980s, they were quick to tell us to "put a tiger in your tank" at Exxon by choosing gasoline with MTBE, an ethanol compound; and, similar campaigns were advertised by other gas stations and petroleum manufacturers.

This is what we get for electing a Republican who is in Big Oil's back pocket. Tennessee needs to protect, not destroy, its environment.

Encourage ethanol use. It's what we've been doing since 1975. We've all used these products, and benefited from them.

When the additives are made by Big Oil, it's "better" or "cleaner" gas.

When it has ethanol, and not made to the profit of Big Oil, it's "bad for your engine."

What hogwash. We understand that ethanol and its related compounds are what we want.

What we really want is the complete disruption and dismissal of petroleum burning industries. We need a better solution altogether. Stockpiling trash in our atmosphere to the profit of Big Oil is not in our state's best interest.

Encourage double-walled storage tanks. Really, we should discourage underground storage altogether. It's not reasonable to believe that those tanks will be maintenanced and inspected to guard against leaks, as they should.

Not polluting, every moment of every day, is what we expect from all petroleum business operators. That includes Governor Haslam.

Not only is this decision self-serving, it's wrong and tacky and backwards. We need to get with it. Provide for spill control and prevention. Above ground tanks, with reinforcement and spill containment should be the norm, statewide.

Irresponsible fuel storage has been the norm for many years. Look how many gas stations closed and sold off their HAZMAT-stained property, instead of cleaning up or operating safely, back when only modest safety restrictions were put in place in the 1980s. Not doing business safely or ethically is part of profit calculation in the fuel industry. We need to put a stop to that, and get our people back to doing what's right.

Don't turn the sky into a dump. Get smart and oppose these Big Oil scams.

January 30, 2011 at 12:10 p.m.
acerigger said...

You people just don't "get it" do you? The issue is not ethanol storage, it's the "feather my nest" syndrome!

January 31, 2011 at 4:29 p.m.
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