A containment and storage system for liquids, such as petroleum based liquids, for use for instance in a railroad track environment, comprising a walled containment reservoir formed in the ground and opening upwardly, with the containment reservoir including a flexible impervious liner to prevent escape of liquid through the liner from the containment space, and a receiving or storage reservoir disposed in spaced relation to the containment reservoir and means coacting between the reservoirs for transferring liquid caught in the containment reservoir, to the storage reservoir. In one embodiment, a mechanical pump is utilized for transferring to the storage reservoir liquid caught in the containment reservoir. In another embodiment, gravity flow is utilized for transferring such liquid. An improved arrangement is disclosed for handling liquid caught in the containment reservoir, and preventing leakage from the reservoir, at the exit point from the containment reservoir. A novel method of collecting and storing liquids, such as petroleum based liquids, along a railroad track environment, is also disclosed.