A recent $531,875 settlement by Unocal with EPA over discharge violations at its Cook Inlet oil and gas facilities shows how the process works or doesn't work as well as it should, according to industry critics.
Chae Park, the EPA compliance officer who oversaw the case, believes the process works as it should.
"I actually feel very good about this whole process," Park said.
In the settlement, Unocal agreed to pay fines on nine Cook Inlet platforms and two facilities for 736 violations of the federal Clean Water Act. The violations were reported by Unocal to the EPA in November 2002 after the multinational corporation did a discharge records audit for the previous five years and notified the EPA that its earlier reports were in error, Park said. Unocal also reported more recent discharge violations in May 2003.
Park said there were no allegations of criminal intent to defraud or make false reports.
Unocal and other Cook Inlet oil and gas operations have a general permit up for renewal in April to discharge into Cook Inlet oil and grease, zinc, silver, copper, lead, hydrocarbons and dishwater. All other U.S. offshore oil and gas operations work under no-discharge regulations, said Lois Epstein, an oil and gas industry specialist with Cook Inlet Keeper and Trustees for Alaska in Anchorage.
Unocal spokesperson Roxanne Sinz of Anchorage said it is their policy to periodically audit its discharge reports and facilities.
"We're constantly monitoring ourselves to maintain compliance," she said.
In its first report to EPA, Unocal identified 555 violations, Park said. In March 2003, EPA proposed a $370,000 settlement with Unocal. Epstein said while in the Seattle area about then, she visited the Region 10 offices and asked to see the Unocal reports. Epstein said EPA couldn't produce all the reports, and Cook Inlet Keeper and Trustees for Alaska eventually got them from Unocal. Park said their office was in the process of hiring and training a new file clerk, and agreed records might not have been available.
Cook Inlet Keeper, Trustees for Alaska and Cook Inlet Native tribes reviewed them during a public comment period on the first proposed settlement. Trustees for Alaska identified 960 possible violations. Park said Cook Inlet Keeper interpreted some discharge reports differently than EPA, but did agree that the groups found additional violations.
EPA calculates violations based not on a single violation, but on a report of a violation, Park said. If a report of the monthly average of a discharge exceeds the amount allowed, that is assumed to have been an ongoing violation and is counted as 30 violations.
In May 2003 Unocal submitted updated discharge reports. Park said after the first proposed settlement, Unocal did a facilities audit. In that audit, Unocal discovered and reported that a dishwasher discharge pipe at its Bruce Platform did not go below the water level at the most extreme low tide. Unocal was required to discharge below the water level dishwater from a kitchen serving about 10 workers. With the pipe not below the most extreme low-water level, some discharges would have been on the surface.
"I don't think there was any environmental harm," Park said. "It's mostly aesthetics."
Vicki Clark, staff attorney for Trustees for Alaska, said she reviewed Unocal's May 2003 and other reports, and pointed out the Bruce Platform dishwater discharge violations as well as other possible violations. Park credits most of this information as coming from Unocal. Based on this new information, Trustees for Alaska identified a new total of 1,379 possible violations.
Park said EPA considered the updated information from Unocal and the public comments, and came up with a new calculation of 736 violations. EPA increased the fines. For example, at the Granite Point facility, Park said the allowed monthly average for oil and grease was 29 milligrams per liter in a sample; Unocal reported 55 milligrams per liter, for an increased penalty of $17,000. Fines on discharge violations from platforms varied from $4,940 to $93,975.
The most significant violations were for the dishwater discharges from the Bruce Platform. EPA fined Unocal the maximum allowable under the agency's administrative authority, $137,500, Park said. Unocal couldn't tell EPA how long the dishwater discharge violation had gone on. Park characterized the fines as punitive.
"One of the messages I want to emphasize is the penalties were a significant amount compared to the type of violation," Park said. "Make it painful so it doesn't occur again."
"That's an important violation because it's an unpermitted discharge. That's pretty heavy duty," said Clark, the Trustees for Alaska lawyer. "It's something that could have been fixed a long time before."
Clark said she believed other platforms should have received the maximum penalty.
"If you're going to have report requirements, you have to take them seriously," Epstein added. "You can't just pick and choose."
Epstein criticized EPA for not monitoring Unocal closely. "EPA had not done a good job of oversight," she said. "It's unfortunate Cook Inlet is not being treated as a water body that needs to be protected."
With the large area covered and its small staff, Region 10 of EPA has to rely on industry to provide timely, accurate discharge permit reports, Park said. With only five compliance officers and with the huge geographical distances, it's unrealistic for them to visit every facility.
"I will not apologize for that," he said.
Park also noted that Alaska and Idaho are the only states in the region where EPA has direct implementation over discharge permits. Oregon and Washington monitor discharges through their own environmental agencies.
Unocal had the option of paying its fine through the Supplemental Environmental Project program, Park said. Robert Grandinetti, a compliance officer with Region 10 EPA, said the program funds environmentally beneficial programs in local communities. For example, a seafood processor fined for clean water violations started a fish meal plant to render fish waste and not discharge it.
According to Epstein, Cook Inlet Keeper was created in 1995 under a SEP settlement with Unocal, Marathon and Shell oil companies over discharge violations.
"It would be nice to divert funds to places where it will affect the local community," said Grandinetti.
According to a press release from Cook Inlet Keeper, the Keeper, Trustees for Alaska and Cook Inlet Native tribes asked Unocal to support tribal work on oil and gas issues. Park said Unocal had the discretion to do an SEP, but chose not to and instead paid the entire fine to the U.S. Treasury. EPA sets up strict requirements for running an SEP, Park said, and establishing one takes more work and delays the settlement.
"Unocal could have supported Native Alaskans whose resources were harmed by the latest round of dumping violations," Bob Shavelson, director of Cook Inlet Keeper, said in a press release.
"Our concerns continue to go unaddressed," Pat Norman, Port Graham village chief said in a press release. "Unocal's violations exceeded standards established to protect subsistence resources. Unocal's pollutants harm the very resources the tribes of Cook Inlet depend on, which are critical to our traditional way of life."
Park said he appreciated Unocal coming forth with corrected discharge reports. He also praised the environmental organizations for reviewing the reports and bringing to his attention additional violations.
Sinz said, "Unocal will continue to audit ourselves and self-report to maintain compliance."
"Unocal came forward like they're supposed to," Park said. "All around, the three parties (Cook Inlet Keeper and the other groups, Unocal, EPA) did what they're supposed to do."
Michael Armstrong can be reached at michaela@homernews.com.
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