EPA v. KOCH PETROLEUM GROUP, LP

Case summary

THIS CASE CONCERNS TWO VIOLATIONS: FIRST VIOLATION THIS 1997 RFG VIOLATION WAS FOUND DURING A JULY 21, 1997 EPA FOLLOW-UP OF A VIOLATION FIRST REPORTED B Y SOUTHWEST RESEARCH INSTITUTE ( SWRI ). SWRI CONDUCTS INDE PENDENT RFG FUEL SURVEYS UNDER CONTRACT FOR THE RFG SURVEY A SSOCIATION. A SURVEY SAMPLE COLLECTED JUNE 17, 1997 AT A MA AS PETROLEUM UNBRANDED RETAIL OUTLET IN MILWAUKEE COUNTY WI SCONSIN, A COVERED AREA UNDER THE RFG PROGRAM, FAILED TO MEE T THE APPLICABLE RFG STANDARD OF 1.5 MINIMUM WT % FOR OXYGEN FOR USE IN THIS COVERED AREA. THE MIDGRADE GASOLINE'S OXYG EN CONTENT WAS 0.08 WT% AND WAS SUPPLIED BY KOCH REFINING CO , LP ( KOCH ) MILWAUKEE TERMINAL. KOCH ADMITTED THAT BEGINN ING ON APRIL 26, 1997, NO ETHANOL WAS ADDED TO THE 89 OCTANE MID-GRADE DURING IN-LINE BLENDING (ALLEGING THIS WAS DUE TO AN ERROR IN CHANGING THE COMPUTER-CONTROLLED RECIPE THE D AY BEFORE) AND THAT THE SITUATION CONTINUED UNTIL THE EPA IN SPECTION ON JULY 21, 1997. BEFORE THE ISSUANCE OF THE NOV, KOCH HAD CONCEDED THEIR DEFENSES, LIABILITY, THE AMOUNT OF GALLONS IN QUESTION (873,587 GALLONS) AND THE DURATION OF TH E VIOLATION. KOCH IS THE OXYGENATE BLENDER AND DISTRIBUTOR. SECOND VIOLATION A SECOND VIOLATION OF THE RFG REGULATIONS WAS FOUND DURING A DIRECTED EPA INSPECTION AT THE MILWAUKEE TERMINAL ON MAY 26 , 1998. THE COMPLEX MODEL STANDARDS FOR RFG WENT INTO EFFEC T ON JANUARY 1, 1998. MILWAUKEE COUNTY IS A COVERED AREA UN DER THE RFG PROGRAM DURING THE VOC CONTROL PERIOD, IN VOC CO NTROL REGION 2. EPA LABORATORY ANALYSIS OF THE SAMPLES TAKE N FROM TANK #510 SHOWED THE TOP NINE FEET OR 930,087 GALLONS HAD A VOC PERFORMANCE REDUCTION PERCENTAGE OF 0.311, WHICH IS BELOW THE MINIMUM STANDARD (COMPLEX MODEL) OF 13.1% FOR T HE PERIOD MAY 1 TO SEPTEMBER 15. KOCH HAD NOT FOLLOWED THE TANK SAMPLING PROCEDURES DESCRIBED IN STEVE HERMAN'S APRIL 2 3, 1998, LETTER CONCERNING ENFORCEMENT TOLERANCES FOR THE VO C EMISSIONS PERFORMANCE STANDARD, IN FACT, THEY WERE IGNORAN T OF THE LETTER'S EXISTENCE. THE LETTER REQUIRES DOWNSTREAM PARTIES SUCH AS KOCH TO DEMONSTRATE COMPLIANCE AT THE START OF THE VOC SEASON WITH TOP, MIDDLE AND BOTTOM SAMPLES WHICH TEST WITHIN STANDARDS. KOCH HAD ONLY TAKEN A RUNNING SAMPLE . THE TANK WAS CLEARLY STRATIFIED, WITH THE TOP NINE FEET T ESTING BETWEEN -21.38 VOC% AT THE TOP AND 12.40 VOC % AT 11 FEET(AVERAGE 0.311 VOC%). PER KOCH' CONVERSION CHART FOR #5 10, THIS TRANSLATES INTO 930,087 GALLONS OF RFG BEING OFFERE D FOR SALE. THERE WERE NO SALES. BUT FOR THE EPA INSPECTIONS, BOTH THE1997 AND 1998 VIOLATION S WOULD HAVE GONE UNDETECTED BY KOCH. IN THEIR RESPONSE TO AED'S  114 REQUEST FOR INFORMATION (ISSUED WITH THE NOV) , KOCH CONCEDED THE 1997 VIOLATION WAS NOT DETECTED DUE TO INA DEQUATE STAFF OVERSIGHT AND TRAINING. DISCUSSION OF SETTLEMENT FACTORS: UNCONTESTED CASE WHERE PENALTY THE ONLY ISSUE. KOCH'S ECONO MIC BENEFIT ON THE 1997 CASE WAS $34,542. THE PENALTY SPREA D SHEET GIVES A PENALTY OF $8,921 FOR THE 1997 VIOLATION, AN AND $ 44,103 FOR THE ONE IN 1998. THE TOTAL OF THE ECONOMIC BENEFIT AND PENALTY CALCULATIONS IS $ 87,566. A REDUCTION W WAS GIVEN TO THE GRAVITY COMPONENT , IN CONSIDERATION OF TH E FOLLOWING FACTORS: KOCH COOPERATED WITH EPA THROUGH OUT T HE PROCESS, TOOK SIGNIFICANT AND PROMPT REMEDIAL ACTIONS, MADE CREDIBLE IMPROVEMENTS IN OVERSIGHT, AND HAD NO VIOLATIO NS AT THE MILWAUKEE TERMINAL IN 1999. THERE WAS NO ENVIRONM ENTAL HARM FROM THE VIOLATIONS. ECONOMIC BENEFIT IS FULLY RECOVERED UNDER THE AGREEMENT.

Defendants (1)

• KOCH REFINING CO, LP-MNNamed in complaintNamed in settlement

Facilities (1)

• FLINT HILLS RESOURCES

  9343 N 107TH ST, MILWAUKEE, WI, 53224

  Registry ID: 110009517727

Statutes cited

• CAA 211 — Regulation of Fuels - Motor Vehicle and Engine Fuels

Enforcement conclusions (1)

• KOCHentered 1999-09-27

  Primary law: CAA

  Federal penalty: $67,500

Timeline (4 milestones)

• 1999-02-03Complaint Filed/Proposed Order
• 1999-09-27Final Order Issued
• 1999-10-12Enforcement Action Data Entered
• 1999-10-13Enforcement Action Closed