Committee advances bill to protect out-of-state fuel sourcing and raise tank cleanup cap

Senator Michael Pelton introduced Senate Bill 122 on behalf of rural fuel distributors, saying the measure would “put a permanent fix into that statute” to allow fuel suppliers flexibility to obtain fuel from out of state and avoid longer hauls from Denver that increase costs and risk shortages.

The bill would also increase the per‑occurrence cap on the Colorado Petroleum Storage Tank Fund from $2,000,000 to $2,500,000 to reflect higher cleanup costs. "When we first set up the Petroleum Storage Tank Fund... the cap was set $2,000,000 per reimbursement event," said Andy Smith, a board member of the Colorado‑Wyoming Petroleum Marketers representing Evergreen Oil Company. Smith testified the fund is widely seen as a model and that the cap has not kept pace with inflation.

Greer Bailey, speaking for the Colorado‑Wyoming Petroleum Marketers, told the committee the Division of Oil and Public Safety (OPS) had issued waivers after ASTM changed the RVP (reid vapor pressure) standards and that a statutory fix would provide needed long‑term flexibility. "OPS has developed a working group between the suppliers, the refiners, the pipeline companies and marketers," Bailey said, thanking Director Mahesh Albuquerque and OPS staff for their work.

John Drafts, vice president of environmental services at Invesco, said inflation since 2005 means the $2,000,000 cap no longer fully covers severe contamination cases and estimated an inflation‑adjusted equivalent near $3,300,000, though he urged $2,500,000 as a reasonable near‑term adjustment to ensure remediation of sensitive sites.

Committee members asked questions but raised no objections. Senator Henriksen moved the bill to the Committee of the Whole with a favorable recommendation and the motion passed unanimously.

The bill’s sponsors and industry witnesses said the bill formalizes flexibility already being used via departmental waivers and provides a modest inflationary adjustment to the fund to avoid bankruptcies for small retail fuel businesses and to ensure cleanup resources remain available.

Next steps: SB 122 was reported to the Committee of the Whole; sponsors noted they may run amendments on second reading.