Safe Drinking Water Act: Proposed Administrative Settlement, Penalty Assessment and Opportunity To Comment Regarding Shell Oil Company

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

EPA has entered into a consent agreement with Shell Oil Company (“Shell” or “Respondent”) to resolve violations of the Safe Drinking Water Act (“SDWA”) and the Resource Conservation and Recovery Act (“RCRA”) and their implementing regulations.

The Administrator is hereby providing public notice of this Consent Agreement and proposed Final Order, and providing an opportunity for interested persons to comment on the SDWA portions of this Consent Agreement in accordance with SDWA section 1423(c)(3)(B).

DATES:

Comments are due on or before July 13, 2007.

ADDRESSES:

Comments may be submitted electronically, by mail, or through hand delivery/courier. Follow the detailed instructions as provided in Section I. B of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:

Lynn S. Holloway, Waste and Chemical Enforcement Division (2246-A), U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; telephone (202) 564-4241; fax: (202) 564-0019; e-mail: Holloway.Lynn@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. How Can I Get Copies of This Document?

1. Docket. EPA has established an official public docket for this action under Docket ID No. OECA-2005-0081.

The official docket consists of the Consent Agreement, proposed Final Order, and any public comments received. The official public docket is the collection of materials that is available for public viewing at the Enforcement and Compliance Docket Information Center (ECDIC) in the EPA Docket Center (EPA/DC) EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the ECDIC is (202) 566-1752. A reasonable fee may be charged by EPA for copying docket materials.

2. Electronic Access. You may access this Federal Register document electronically through the EPA Internet under the “Federal Register” listings at http://www.epa.gov/fedrgstr/.

An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public comments, and to access those documents in the public docket that are available electronically. Once in the system, select “search,” then key in the appropriate docket identification number.

For public commentors, it is important to note that EPA's policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing in EPA's electronic public docket as EPA receives them and without change, unless the comment contains copyrighted material, Confidential Business Information, or other information whose disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in EPA's electronic public docket. The entire printed comment, including the copyrighted material, will be available in the public docket.

Public comments submitted on computer disks that are mailed or delivered to the Docket will be transferred to EPA's electronic public docket. Public comments that are mailed or delivered to the Docket will be scanned and placed in EPA's electronic public docket. Where practical, physical objects will be photographed, and the photograph will be placed in EPA's electronic public docket along with a brief description written by the docket staff.

B. How and to Whom Do I Submit Comments?

You may submit comments electronically, by mail, or through hand delivery/courier. To ensure proper receipt by EPA, identify the appropriate docket identification number in the subject line on the first page of your comment. Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments.

1. Electronically. If you submit an electronic comment as prescribed below, EPA recommends that you include your name, mailing address, and an e-mail address or other contact information in the body of your comment. Also include this contact information on the outside of any disk or CD-ROM you submit, and in any cover letter accompanying the disk or CD-ROM. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. EPA's policy is that EPA will not edit your comment, and any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket, and made available in EPA's electronic public docket. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.

i. EPA Dockets. Your use of EPA's electronic public docket to submit comments to EPA electronically is EPA's preferred method for receiving comments. Go directly to EPA Dockets at http://www.epa.gov/edocket , and follow the online instructions for submitting comments.

Once in the system, select “search,” and then key in Docket ID No. OECA-2005-0081. The system is an “anonymous access” system, which means EPA will not know your identity, e-mail address, or other contact information unless you provide it in the body of your comment.

ii. E-mail. Comments may be sent by electronic mail (e-mail) to docket.oeca@epa.gov., Attention Docket ID No. OECA-2005-0081. In contrast to EPA's electronic public docket, EPA's e-mail system is not an “anonymous access” system. If you send an e-mail comment directly to the Docket without going through EPA's electronic public docket, EPA's e-mail system automatically captures your e-mail address. E-mail addresses that are automatically captured by EPA's e-mail system are included as part of the comment that is placed in the official public docket, and made available in EPA's electronic public docket.

iii. Disk or CD-ROM. You may submit comments on a disk or CD-ROM that you mail to the mailing address identified in Section I.A.1. These electronic submissions will be accepted in WordPerfect or ASCII file format. Avoid the use of special characters and any form of encryption.

2. By Mail. Send your comments to: Enforcement and Compliance Docket Information Center, Environmental Protection Agency, Mailcode: 2201T, 1200 Pennsylvania Ave., NW., Washington, DC 20460, Attention Docket ID No. OECA-2005-0081.

3. By Hand Delivery or Courier. Deliver your comments to the address provided in Section I.A.1., Attention Docket ID No. OECA 2005-0081. Such deliveries are only accepted during the Docket's normal hours of operation as identified in Section I.A.1.

II. Background

Shell Oil Company and affiliates Shell Chemical LP, Equilon Enterprises LLC, Motiva Enterprises LLC, and Criterion Catalysts Technologies, LP (collectively “Shell” or “Respondent”), comprise a global group of energy and petrochemical companies with corporate offices in Houston, Texas. Respondent is authorized to do business in the states of California, Delaware, Illinois, Indiana, Louisiana, Ohio, Texas, and Washington. Respondent is the owner and operator of hazardous waste management facilities subject to regulation under Subtitle C of RCRA. Respondent is also the owner and operator of Class I hazardous waste injection wells subject to regulation under SDWA.

On or about April 9, 2004, pursuant to EPA's Policy on Incentives for Self-Policing (Audit Policy), 65 FR 19618 (April 11, 2000), Respondent submitted its initial voluntary disclosure to EPA regarding potential violations of RCRA's financial responsibility regulations. Respondent submitted additional clarifying disclosures on August 26, 2004, December 9, 2004, and April 13, 2005. Respondent's submissions disclosed that it failed to satisfy certain financial responsibility requirements under RCRA for closure, post-closure care, and third-party liability, and under SDWA for plugging and abandonment, at seventeen facilities in eight states between March 30, 2004 and May 28, 2004.

Respondent's Audit Policy disclosure indicated that based on the need of its parent companies (Royal Dutch Petroleum Company and Shell Transport and Trading Company) to restate certain oil and gas reserves related to years prior to 2003, Respondent's annual report had been delayed, and that its auditor could not complete a certification until the restatement work by the parent companies was completed. Accordingly, Respondent was not able to submit updated financial information to demonstrate that it met the financial test or corporate guarantee for the seventeen facilities by March 30, 2004, as required by RCRA, SDWA, and their implementing regulations. Respondent's updated financial information in support of its corporate guarantee was not submitted to EPA and the affected states until May 28, 2004.

Section 3008(a) of RCRA, 42 U.S.C. 6928(a), authorizes the EPA to issue compliance orders whenever the EPA determines that any person is violating any requirement of the Act. Pursuant to RCRA section 3006, 42 U.S.C. 6926, California, Delaware, Illinois, Louisiana, Texas, and Washington have been authorized to administer a state hazardous waste program. Any noncompliance with the regulations promulgated pursuant to Subtitle C of RCRA, or with any state provision authorized pursuant to RCRA section 3006, constitutes a violation of RCRA and is subject to the assessment of penalties and issuance of compliance orders pursuant to RCRA section 3008.

Section 3008(h) of RCRA, 42 U.S.C. 6928(h), authorizes EPA to issue orders requiring corrective action or such other measures as EPA may deem necessary to protect human health or the environment. EPA's authority under this section includes, among other things, the authority to require financial assurance for corrective action.

Section 1423 of the SDWA, 42 U.S.C. 300h-2, authorizes the EPA to issue compliance orders whenever the EPA finds that any person is violating any requirement of an Underground Injection Control (UIC) program where a state does not have primary enforcement responsibility. Criterion Catalysts Technologies, LP, a subsidiary of Shell, operates three Class I hazardous waste injection wells in Michigan City, Indiana (UIC Permit Numbers IN-091-0001, IN-091-0002, and IN-091-0004). Indiana does not have primacy over Class I hazardous waste injection wells. See 40 CFR 147.751. Therefore, the UIC program for Class I wells in the state of Indiana is administered by EPA.

Specifically, Respondent disclosed that it failed to satisfy the requirements of the corporate guarantee for closure by failing to provide updated financial information within 90 days after the close of FY 2003, at the following nine facilities: Martinez Refining Co. (Martinez, California); Carson Marine Terminal (Carson, California); Delaware City Refinery (Delaware City, Delaware); Wood River Refining Co. (Wood River, Illinois); Odessa Refining Co. (Odessa, Texas); Shell Deer Park Refining Co. (Deer Park, Texas); Westhollow Technology Center (Houston, Texas); Port Arthur Refinery (Port Arthur, Texas); and Puget Sound Refining Co. (Anacortes, Washington), in violation of RCRA section 3008(a), 42 U.S.C. 6928(a), and Cal. Code of Reg. 66264.143(f), 66265.143(f) (California); Del. Admin. Code 7-1000 264-264.143(f) (Delaware); 35 Ill. Adm. Code 724.243(f) (Illinois); LAC 33:V.3707.F. (Louisiana); 30 Texas Admin. Code, 37.251 (Texas); and WAC 173-303-620(4) (Washington).

Respondent further disclosed that it failed to satisfy the requirements of the corporate guarantee for post-closure by failing to provide updated financial information within 90 days after the close of FY 2003, at the following twelve facilities: Martinez Refining Co. (Martinez, California); Los Angeles Refining Co., (Wilmington, California); Delaware City Refinery (Delaware City, Delaware); Wood River Refining Co. (Wood River, Illinois); Norco Chemical Plant—West Site (Norco, Louisiana); Odessa Refining Co. (Odessa, Texas); Shell Deer Park Refining Co. (Deer Park, Texas); Westhollow Technology Center (Houston, Texas); Port Arthur Refinery (Port Arthur, Texas); and Puget Sound Refining Co. (Anacortes, Washington), in violation of RCRA section 3008(a), 42 U.S.C. 6928(a), and 22 Cal. Code of Reg. 66264.145(f), 66265.145(f) (California); Del. Admin. Code 7-1000 264-264.145(f) (Delaware); 35 Ill. Adm. Code 724.245(f) (Illinois); LAC 33:V.3711.F. (Louisiana); 30 Texas Admin. Code, 37.251 (Texas); and WAC 173-303-620(6) (Washington).

Respondent further disclosed that it failed to satisfy the requirements of the corporate guarantee for third-party liability by failing to provide updated financial information within 90 days after the close of FY 2003, at the following twelve facilities: Martinez Refining Co. (Martinez, California); Los Angeles Refining Co., (Wilmington, California); Delaware City Refinery (Delaware City, Delaware); Wood River Refining Co. (Wood River, Illinois); Norco Chemical Plant—West Site (Norco, Louisiana); Odessa Refining Co. (Odessa, Texas); Shell Deer Park Refining Co. (Deer Park, Texas); Westhollow Technology Center (Houston, Texas); Port Arthur Refinery (Port Arthur, Texas); and Puget Sound Refining Co. (Anacortes, Washington), in violation of RCRA section 3008(a), 42 U.S.C. 6928(a), and 22 Cal. Code of Reg. 66264.147(g), 66265.147(g) (California); Del. Admin. Code 7-1000 264-264.147(f) (Delaware); 35 Ill. Adm. Code 724.247(f) (Illinois); LAC 33:V.4411.F. (Louisiana); 30 Texas Admin. Code, 37.404 (Texas); and WAC 173-303-620(8) (Washington).

In addition, Respondent disclosed that it failed to comply with the financial responsibility requirements in the corrective action order under Dkt. No. RCRA-05-2003-0007, issued pursuant to RCRA section 3008(h), 42 U.S.C. 6928(h).

Finally, Respondent disclosed that it failed to satisfy the requirements of the corporate guarantee for plugging and abandonment by failing to provide updated financial information within 90 days after the close of FY 2003, at the following three facilities: Criterion Catalysts (Permit #IN-091-0001) (Michigan City, Indiana); Criterion Catalysts (Permit #IN-091-0002) (Michigan City, Indiana); and Criterion Catalysts (Permit #IN-091-0004) (Michigan City, Indiana), in violation of SDWA section 1421(b), 42 U.S.C. 300h(b), and 40 CFR 144.63(f)(1) and 144.63(f)(5).

EPA, as authorized by RCRA section 3008(g), 42 U.S.C. 6928(g) and SDWA section 1423(c), 42 U.S.C. 300h-2(c), has assessed a civil penalty for these violations.

EPA has determined that Respondent has satisfied all of the conditions set forth in the Audit Policy and thereby qualifies for a 100% reduction of the gravity component of the civil penalty. EPA has determined that the gravity component of the civil penalty is $77,546.50. Of that penalty, $77,391.50 is attributable to the RCRA violations and $155 is attributable to SDWA violations. EPA alleges that this gravity component is assessable against Respondent for the violations that are the basis of this Agreement.

Under the Audit Policy, EPA reserves the right to collect any economic benefit that Respondent may have realized as a result of its noncompliance. Based on information provided by Respondent, EPA has determined that Respondent obtained an economic benefit of $153,949 as a result of its noncompliance. Of this amount, $153,757 is attributable to the RCRA violations and $192 is attributable to the SDWA violations. Accordingly, the civil penalty agreed upon by the parties for settlement purposes is $153,949. Respondent has agreed to pay this amount. EPA and Respondent negotiated this agreement following the Consolidated Rules of Practice, 40 CFR 22.13(b). This Consent Agreement and proposed Final Order is subject to public notice and comment under SDWA section 1423(c)(3)(B), 42 U.S.C. 300h-2(c)(3)(B) and 40 CFR 22.45(b) and (c).