Leaky tank puts owner of station in a bind.

Byline: Diane Dietz The Register-Guard

REEDSPORT - He ran the "101 Service" filling station at the junction in Reedsport for 43 years.

He has pumped rivers of gasoline in his time and serviced fleets of cars. And he brought two of his sons along into the gas station business.

But this year, station owner Hugh Clardy Jr. faces pollution penalties and cleanup costs so stiff that his station - in operation since the Kennedy administration - could be in jeopardy.

"I got my whole life sunk into this place, and I don't know just what I'm going to do," he said.

His problem: one leaky underground petroleum storage tank, and faulty leakage monitoring equipment on three others. His other problem: State environmental regulators are fining him $40,000.

This is an example of environmental hassle part two for gas station owners, such as Clardy, who spent much of the late 1980s and early 1990s grudgingly replacing corroded steel tanks from which petro-chemicals were leaking into the soil and ground water and sometimes up into the atmosphere.

Leaking gasoline is bad and sometimes dangerous for humans. Vapors can seep into basements and into sewers, creating the possibility of explosion. Gasoline contains benzene, a known human carcinogen; ethylene dibromide, a substance so caustic it's used in pesticide; and sometimes MTBE, which is suspected of causing kidney and liver damage.

State and federal environmental laws required gas station owners by 1998 to dig up the leaky vessels, install double hulled tanks with corrosion prevention technology and leak detection alarms.

Oregon law required station owners to prove they can pay for cleanup should a leak occur, or else carry insurance that would.

"Everybody had to a) upgrade their tanks to the new standard, b) install a new system, or c) take the tanks out and go to an above ground tank - or, go out of business," said Jim Glass an environmental specialist with the state Department of Environmental Quality.

DEQ officials issued drastic predictions that as many as half of Oregon's gas stations would go out of business. They raised the spectre of drivers searching mile after mile for a fill-up.

The reality wasn't quite so drastic. The number of gas stations in Oregon dropped 164 - or 9 percent - in a decade, to the current total of 1,752, according to the May 2005 issue of the National Petroleum News.

Most gas stations installed the upgrades and went on with their business. But a decade later, inspectors are discovering a reoccurrence of problems.

Some stations have leak detection systems that are broken, Glass said. Some old tanks that were upgraded with a interior coating seem to be sloughing the coating off. Some new tanks sprang leaks.

"There have been some failures of the new, upgraded systems," Glass said.

Inspectors found some stations bought the systems but neglected to train employees in how to operate them, Glass said. So the state tightened the rules and offered operator training.

A DEQ inspector checking the Clardys' station in Reedsport found that in the ground alongside the station's new, upgraded tanks was a 32-year-old, 2,000-gallon tank that leaked.

The tank was unused and empty, Clardy said. Tests found petrochemicals in the soil - though the extent of the leak has not yet been determined.

"I just left the old tank in the underground because it was out of the way and wasn't bothering anything," Clardy said.

The station owner couldn't show DEQ inspector Eric Clough how his leak detection system worked for the new tanks, according to DEQ records.

"He's got in-tank probes that monitor the fuel levels, but the probes aren't working. The computer console in his station building is not working - so the whole detection system is not working," Clough said.

Further, Clardy couldn't produce tank insurance documents, Clough said, adding insurers turned Clardy down because his tanks are not in compliance with the law. "He just knows he's in a financial bind, and he's not sure how to get out of it," Clough said.

Now, the DEQ has levied a $40,000 civil penalty against Clardy for failing to take financial responsibility for the leak; failing to conduct release detection and keep records; failing to decommission the old leaking tank; failing to demonstrate a properly functioning overfill prevention device; and failing to provide results of corrosion protection system tests.

Earlier this fall, the DEQ gave Clardy 20 days to respond to the violation notice, but he didn't answer by the deadline, so regulators formalized the fine. Clardy and the DEQ first learned about the leak in early 2002.

"I've tried to play above board and be honest with everybody since I've been in here. What a person needs now is a little compassion and maybe a little help," the 63-year-old Clardy said.

Clardy said he'll meet with DEQ officials in late October and try to negotiate a settlement that he can afford. He said he hopes for success because he means to leave the station to his sons. "They might like to do this when I get too old to answer the bell," he said.