Don't be surprised if your neighborhood gas station is torn up this week.

Stations all around L.A. are scrambling to meet a federal law taking effect on Jan. 1 requiring that all underground gas tanks have reinforced double walls. Those that don't will be prohibited from receiving fuel shipments after the first of the year, effectively shutting them down.

While most stations in L.A. are in compliance with the new law, hundreds have waited until the last minute to begin their upgrades. Many of the laggards are smaller franchisees or independent dealers who have balked at the expense it costs at least $500,000 to pull out three single-walled tanks and replace them with double-walled receptacles. (It takes a separate tank for each grade of gas sold, and because stations generally sell three grades, most have three tanks.)

"Almost all of our company-owned stations are in compliance," said Paul Langland, a spokesman for Arco Products Co., a division of L.A.-based Atlantic Richfield Co. "However, I can't say the same for all of our franchisees and independent dealers we have licensed with. There are some franchisees out there who may shut their doors after they do a cost-benefit analysis."

Langland said as of Jan. 1, Arco Products won't deliver fuel to any station that does not display a special blue decal signifying it has been inspected for double-walled tanks by the local fire department.

The law was actually passed 10 years ago as an effort to crack down on the problem of leaking underground storage tanks, but stations were given until this week to comply. The Environmental Protection Agency says such leaks are the chief source of groundwater contamination nationwide.

Despite 10 years of warnings, many stations either ignored or put off complying with the law. A survey conducted in September by Camarillo-based Lundberg Survey Inc. found that only 52 percent of all service stations in California had upgraded their tanks.

There are no precise figures on how many stations are in compliance throughout L.A. County. However, the L.A. County Fire Department, which oversees stations in 70 of the county's 88 cities, estimates that 75 percent of the stations have complied or were awaiting certification from the county as of Dec. 10.

"There are still people who are holding their heads in the sand, thinking all this will simply go away," said Carl Sjoberg, chief of industrial waste planning and control for the L.A. County Department of Public Works.

The city of L.A. also has about a 75 percent compliance rate for the 2,100 tank owners within the city, according to L.A. Fire Department Capt. John Durso. The Fire Department has inspected every service station in the city over the last two years as part of its enforcement efforts.

"We do have some independent mom-and-pop stations that may have some problems," said Durso. "Many of them were hoping for an extension, which of course never materialized."

Durso said the Fire Department would be sending out notices to all station owners not in compliance that they must abandon any tanks not up to the new code by Jan. 30 or face prosecution by the City Attorney's Office. Under state law, they could receive fines of up to $25,000 for each day they do not have the new tanks.

With thousands of tanks needing to be pulled out and replaced, local contractors have seen an unprecedented boom. Sjoberg and Durso said they have heard reports of waiting periods ranging from three weeks to six months to get tanks replaced.

"Trying to get hold of a contractor is extremely difficult," Sjoberg said. "If you haven't got one by now, you may have to forget it."

As desperate as the situation is for some independent station owners, the vast majority of stations in L.A. County are expected to remain open come Jan. 1. That's because most stations in the highly competitive L.A. market are directly owned by the five major oil companies serving the region: Arco, Tosco Corp. (which bought Unocal Corp.'s service stations in 1996), Chevron Corp., Mobil Corp. and the recently merged Shell Oil/Texaco.

"For our company-owned stations, this was never that difficult," said Arco's Langland. "We've known about this for 10 years and it's easy to upgrade tanks over a long period of time."

The impact is expected to be greater in rural areas outside the L.A. market; these areas have a higher percentage of "mom-and-pop" stations, according to Charlie Mulcahy, vice president of the Irvine-based Automotive Trade Organization of service-station dealers.

Mulcahy, who is an Arco franchisee in Wilmington, said most of the independent service-station dealers in the L.A. area have succumbed to the intense price competition and have long since disappeared.

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