Tuesday 16 November 2010
Hansard of the Legislative Council


Mr FINCH (Question) - My question is to the honourable Leader. Is the Government aware of the concern in the Tasmanian community about the effect of new regulations for underground fuel tanks? Does the Government realise that the regulations about underground fuel tanks potentially affect the viability of a number of important regional businesses such as stores and post offices which rely on fuel sales? Is he aware that some landowners are facing huge costs for removing disused tanks? In my electorate of Rosevears itself it would cost in excess of $50 000 to remediate one property. Will the Government consider ways to spread the burden of remedial action and what assurances can the Government offer affected landowners who cannot afford remediation?

Mr PARKINSON - I thank the honourable member for his petrol-sniffing question. The two most common concerns regarding the new underground petroleum storage systems regulations which have been brought to the attention of the Government relate to the decommissioning of abandoned storage systems and the cost of monitoring the storage systems for leaks. Regulations aim to prevent or limit to the greatest extent practicable the release of petroleum product into the environment from the underground petroleum storage systems. This will reduce harm to the environment and also reduce clean-up costs for storage system owners.

The development of the regulations included several stages of public consultation and included the release of draft regulations and the cost-benefit analysis in the form of a regulatory impact statement. The balance between protecting the environment and the cost of implementing the regulations was considered in detail while drafting the regulations. In order to minimise the financial impact of the regulations the commencement of some requirements was delayed so that site operators and infrastructure owners could budget for the costs.

The regulations require storage systems to be monitored for leaks. This is estimated to cost $25 per tank per month. While this is an added cost burden, it will result in leaks being detected earlier which should limit the extent of contamination and therefore reduce the cost of remediation. Other costs that the regulations impose are the installation and monitoring of groundwater wells and the upgrading of infrastructure. If the storage systems are in an area where the groundwater has a sensitive use, for example drinking water source, groundwater monitoring wells will need to be installed to ensure the groundwater is protected. Two years' notice will be given prior to the requirement for the installation of the wells.

Equipment upgrades are only required where a decision is made to replace the infrastructure or where repair is necessary. The removal of disused storage systems was included in the regulations in an effort to gradually address the potential risk they posed to human health and the environment due to issues such as collapse and explosion risk and leaks impacting on groundwater.

The regulations do not set a time frame within which disused tanks must be decommissioned and therefore the owners are able to plan ahead for this cost. In most cases those storage systems will be decommissioned when the site is redeveloped or sold. The cost of decommissioning is likely to be around $10 000, although costs will be higher if contamination that poses a risk to the environment or human health is detected.

The key principle on which our environmental legislation is based is that of polluter pays. This means that if contamination is detected, it needs further assessment and/or remediation. The person who is responsible for the operation of the site when the pollution occurred will be liable in the first instance. However, if the polluter cannot be found or determined and the property was purchased after 2007, and the purchaser was aware that petroleum had been stored on the site, then the landowner may be liable for remediation costs. There could be a few operators who would be unaware of the potential for underground fuel tanks to leak and potentially cause contamination. It is up to the operators whose business it is to sell fuel to make provision for dealing with the consequences of these leaks should they occur.

A feature of the new regulations is the requirement for storage systems to be monitored for leaks which should limit the extent of contamination and therefore reduce the cost of remediation.