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Out of Service Tanks and Dropping Prices

September 5, 2024

DEP Reminders–Out of Service Tanks & Online Registration Mandate

Over the last month, weโ€™ve heard from a few members with varying DEP-related issues and wanted to highlight some โ€œgeneral housekeepingโ€ notes to keep in mind as you communicate with the Department.  

First, we wanted to relate a cautionary tale for any member who is considering taking their tanks out-of-service. Whether one is taking their tanks out-of-service due to maintenance, ancillary development on site, financial hardship, or otherwise, there are specific rules that must be followed.  

Failing to adhere to DEP rules on this topic can be incredibly harmful to your business and financial solvency. And we donโ€™t say that lightly.  If you do not keep up with the required testing and maintenance routine while tanks are out-of-service, you may be forced to pull your tanks โ€“ even if they are relatively new and operating correctly.

Most NJGCA members have retained outside professionals to help them with any construction or environmental issues. This can include a compliance company, environmental consultants, a Licensed Site Remediation Professional (LSRP), architect, and/or contractor. They will all have their own part to play in any station renovations, installations, or improvements.  

However, it should be noted that any regulatory or compliance shortfalls will ultimately land on your shoulders. In this way, it is no different from your accountant incorrectly tallying your tax obligations. Was it the accountantโ€™s actual fault that you may have underpaid your taxes for the quarter? Yes, it is. But ultimately, it is your responsibility to meet that tax burden.

Recently we spoke with a member who has a location under construction, and revised the physical footprint on his property. The project took over a year to complete, and his tanks were taken out-of-service throughout the process. When he attempted to restart operations, he was handed a delivery ban since he was out of compliance with DEPโ€™s requirement for out-of-service tanks. This not only included administrative paperwork, but failing to maintain the required test regimen while the tanks were out-of-service. If the matter isnโ€™t cleared up, he may be forced to pull his tanks โ€“ which is obviously cost prohibitive and staggeringly harmful to his station.

Could this have been prevented? Werenโ€™t his outside retained professionals (LSRPs, land consultants, etc) getting paid to pay attention for him? Sure they were. But his name is on the underground storage tank registration, and will have to answer to DEP for their flub.

Knowing the above, we thought it appropriate to outline a few of the instances in which an out-of-service notice may be required, including:

The โ€œ7 Day Ruleโ€ – If the station has not pumped any product in seven days (regardless if it is for a customer, municipality, or even an ownerโ€™s own personal vehicles), you must notify DEP and amend your New Jersey Underground Storage Tank Facility Certification Questionnaire (what we call your โ€œtank registrationโ€). This update to DEP must include the ordinary information (location, tank number, facility ID, etc), but will also give a description for any activity on site. While the tank is out-of-service, you must maintain electricity on site, insurance coverage, and your regulated testing regime (including monitoring release detection, corrosion protection, spill and overfill prevention, etc.). Please note that at this stage, it doesnโ€™t matter if there is actual product in the tank or not; and it doesnโ€™t matter why the tank is coming out of service.  

The โ€œ3 Month Ruleโ€ โ€“ If the station has already gone through the โ€œ7 Day Ruleโ€, and it has been three months (or more) since any product was pumped while their tanks were out-of-service, then DEP views any non-operation as a prelude to ultimately closing your tanks. In fact, the DEP cites the American Petroleum Instituteโ€™s own guidelines (Publication 1604, “Closure of Underground Petroleum Storage Tanks” titled “Temporarily Out-of-Service”) in their own rulebook.  If you are at this stage, you still need to maintain the testing requirements while your LSRP works with DEP to notify them of your situation. At this point, you may be required to โ€œcut nโ€™ capโ€ your product lines.

The โ€œ11-going-on-12 Month Ruleโ€ โ€“ There is a mandated rule for tanks that are out-of-service for 12 months, you are required to close your tanks unless DEP approves an extension. That means at 11 months, you need to put your system back into use or start the process of closing your tanks. That said, if you reach the 11th month and wish to extend the deadline, your LSRP should be communicating with DEP on why additional time is needed. Getting the extension granted will depend on not only various reporting requirements, but also on the type of tanks you have. To state it very simply, only UST systems with โ€œsecondary containmentโ€ (that is, double-walled tanks) can seek an extension beyond 12 months. If your system does not have โ€œsecondary containmentโ€ (that is, you have single-walled tanks), your system will be closed.

Your LSRP should know all the preceding information — and much, much more. We point out these notes not to supplement the experience of any LSRP or compliance company, but only to make you aware that such deadlines exist.  Had our member known some of the above information, it is likely he would have nudged his LSRP to make sure any filing deadlines were met.

To learn more about the UST closure provisions, you can CLICK HERE.

To review the actual UST Out-Of-Service Extension instructions, please CLICK HERE.

Secondly, we wanted to reiterate that NJDEP is pushing ahead with their mandate to move all UST registrations to their online portal. Though we have mentioned it in the past, we received an official notice that this will become mandatory on December 2, 2024.

This means that no paper applications will be accepted after this date.  

Only paperless service will be accessible at www.njdeponline.com โ€“ and will include the ability to register, renew, upload โ€œfinancial assurance mechanismsโ€ (such as your insurance policy information), and submit payment through the portal.

If you would like to review a training video on the online portal service, please visit https://dep.nj.gov/srp/training/ 

Gas Prices Heading Downward

With Labor Day weekend behind us, we’re officially outside the normal summer driving season, and we are already seeing prices start to fall. 

The WTI price of oil on Wednesday closed below $70 a barrel, the cheapest it’s been since December 2023. The $70 mark has been kind of a floor, with the price never staying below that consistently for the last three years. Meanwhile, the average rack price fell 10ยข a gallon on Tuesday to its lowest level since January. Last year the average rack price fell 50ยข a gallon over the month of September, in 2022 it fell 14ยข but jumped 35ยข in October before falling an entire $1 a gallon in November. 2021, 2020, and 2019 all saw little change in September.

Could oil prices continue to remain this level or even drop further? The Chinese economy remains weak, hurting worldwide demand. Meanwhile, OPEC has actually committed to increase their production, though they may change that decision now. After years of deliberately cutting supply to drive up the price of the oil they do sell, they haven’t been able to undercut the massive amounts of production coming from the US. The US is producing more oil than any single country in the history of the world, surpassing the peaks Saudi Arabia and Russia ever saw. 

Some have speculated that the widely expected interest rate cuts from the Fed could lead to an increase in commodity prices, including oil, but that pressure may be offset by a cooling US economy. Could the upcoming Presidential election provoke some change? Even if it does, it could be offsetting forces with Russia wanting to see a price spike to help Trump win while the Iranian government would want lower prices since they want to avoid a Trump return to office. Biden has also shown a willingness to open up the Strategic Petroleum Reserve to lower prices, if there were an oil price spike in the next few weeks we could see that happen to try and counter it. 

Reminder: Deadline Approaches for Some Larger Employers

If you have 40 or more employees, then September 15th is the deadline for registering with the State about getting employees enrolled in some kind of retirement program. Those with 25-39 employees have until November 15th. The state has launched a free program that employers can use called RetireReadyNJ. 

The program was actually created by the New Jersey Secure Choice Savings Program Act in March 2019. The law created a state-administered Individual Retirement Account (IRA) plan. The goal was to develop a government-run savings option for private sector workers whose employers do not offer a retirement plan. Though the program was signed into law in 2019, it obviously took a number of years to get off the ground.  After multiple delays, the plan is finally ready to launch.

At this point, the obvious question is, โ€œDoes this apply to me and how will it affect my business?โ€.  The short answer is that it may, or may not.

On its face, the law stipulates that businesses should register with the state if they:

โ€ข Are registered in New Jersey
โ€ข Do not currently have an existing retirement plan
โ€ข Have 25+ employees
โ€ข Have been operating for at least 2 years

All that is needed to register is your federal Employer Identification Number (EIN), and a confirmation access code (which is sent to you during the sign-up process).

If you already offer a retirement plan to your employees, business owners should certify their exemption from the program (which can be done with the provided access code).

Keep in mind that if you meet the qualifications to register, the employer:

โ€ข Does not administer the program
โ€ข Will make no contributions towards employees’ IRA plans (there is no cost at all to employers, and in fact, employer contributions are not permitted)
โ€ข Has no fiduciary responsibilities
โ€ข Has minimal administrative involvement
โ€ข Can easily integrate the program into their current payroll processing (automatic contributions, etc)

It should be noted that, while the law only compels businesses with 25 or more employees (which do not offer a retirement plan) to register, it does not mean that you could not also voluntarily take advantage of the program. In fact, the state has promoted the idea that the program is an advantageous tool for small business owners to use in attracting and retaining talented employees. Ultimately, there may be situational and circumstantial reasons that entice you (or an employee) to register.

Here are a few additional details that should be noted:

โ€ข The deadline for employers with 40 or more employees is September 15, 2024.
โ€ข The deadline for employers with 25 to 39 employees is November 15, 2024.
โ€ข Any employee โ€œsaverโ€ who participates in the program will have ownership and control over their individual IRA accounts. 
โ€ข An employeeโ€™s participation is completely voluntary, and can change their mind on participating at any time. 
โ€ข If you are self-employed, 18 years of age or older, have earned income, and are eligible to contribute to an IRA, you can open an individual RetireReadyNJ account.
โ€ข If your employee has a previous retirement savings plan, they can roll their previous account into the new RetireReadyNJ account. 
โ€ข Full-time and part-time/seasonal workers are treated the same for purposes of calculating the threshold number of employees. This might be helpful in attracting/retaining part time workers to your business.

If you wish to learn more about the plan, you can visit the website by CLICKING HERE

Rack Averages

Date Rack Avg Avg w Taxes Low Rack
08/29 225.05 $2.8575 216.98
08/30 222.80 $2.8350 215.84
09/02 222.80 $2.8350 215.84
09/03 212.71 $2.7341 203.75
09/04 210.98 $2.7168 201.98
Date Avg Retail Avg Margin Diesel Rack Avg
08/29 $3.27 0.44 229.78
08/30 $3.26 0.41 226.60
09/02 $3.25 0.41 226.60
09/03 $3.24 0.41 220.76
09/04 $3.23 0.50 216.70

News Worth Knowing:

Member Benefit Partner (MBP) Spotlight: Bellomo Fuel 

Bellomo Fuel is a full service fuel supplier that specializes in supplying independent fuel retailers. We partner with retailers to create flexible, custom supply agreements tailored to a locationโ€™s specific needs. Please give us a call or email to discuss opportunities at your location. 

Contact: Ryan Ramsay Phone: 908-486-3900 x 112 Email: ryan@bellomofuel.com  www.bellomofuel.com 

Available Real Estate

Cape Harbor Shell

**Price Reduction**

795 Route 109, Unit B, Lower Township, NJ, 08204

Contact: Jerry 609-425-8837 capeharborshell@comcast.net 

Click HERE to view listing

Station for Sale

Thriving High Profit Gas/Service Station close to Major Highway in Prime Location. 

This Exclusive Gas Station is the Sole Provider in the entire town, achieving a remarkable fuel profit of up to and sometimes over 1$ a gallon. Consistently selling 45,000 gallons monthly. Most fuel customers come from Highway so fuel prices do not have to be competitive. 

Also included with the Property is a Reputable High End Auto Repair Facility. Repair shop has all required Specialty and Diagnostic Tools for servicing mostly High End Vehicles. Advertising is no longer used do to an enormous Demand and large Customer Base. Repair Business has has potential for increased profitability and expansion, the business is open to experienced buyers for a possible partnership or profit sharing arrangement. Location is 1 out of 100. Fuel sales make 20-40K a month and repairs can do the same with the right operator. 

This one of a kind opportunity can include seller financing for those with High-Level Automotive or Gas Station Experience.

Contact Greg
908-291-7845

Our Road Warrior newsletter is brought to you by the following Member Benefit Partners:

New Jersey 
Gasoline-Convenience-Automotive Association
615 Hope Road, Bldg. 2, 1st Floor
Eatontown, New Jersey 07724

 

Phone: 732-256-9646
eMail: info@njgca.org


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