Case 6:12-cv-01110-EFM-JP0 Document 3-1 Filed 03/26/12 Page 1 of 91 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS UNITED STATES OF AMERICA, ) AND THE STATE OF KANSAS ) ) Plaintiffs, ) ) ) v. ) ) ) NATIONAL COOPERATIVE ) REFINERY ASSOCIATION, ) ) Defendant. ) ) Civil Action No. 6:12-cv-1110-ESAI-JP0 CONSENT DECREE
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 2 of 91 TABLE OF CONTENTS I. JURISDICTION AND VENUE -2- II. APPLICABILITY -3- III. OBJECTIVES -4- IV. DEFINITIONS -4- V. CIVIL PENALTY -6- VI. INJUNCTIVE RELIEF -7- VII. SUPPLEMENTAL ENVIRONMENTAL PROJECT -27- VIII. REPORTING REQUIREMENTS -31- IX. STIPULATED PENALTIES -34- X. FORCE MAJEURE -40- XI. DISPUTE RESOLUTION -42- XII. INFORMATION COLLECTION AND RETENTION -45- XIII. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS -46- XIV. COSTS -48- XV. NOTICES -48- XVI. EFFECTIVE DATE -49- XVII. RETENTION OF JURISDICTION -50- XVIII. MODIFICATION -50- XIX. TERMINATION -50- XX. PUBLIC PARTICIPATION -52- i
Case 6:12-cv-01110-EFM-JP0 Document 3-1 Filed 03/26/12 Page 3 of 91 XXI. SIGNATORIES/SERVICE -52- XXII. INTEGRATION -52- XXII. FINAL JUDGMENT -53- XXIII. APPENDICES -53- ii
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 4 of 91 A. Plaintiff United States of America, on behalf of the United States Environmental Protection Agency ("EPA") and the State of Kansas acting through the Kansas Department of Health and Environment ("KDHE"), have filed a complaint in this action concurrently with this Consent Decree alleging that Defendant, National Cooperative Refinery Association ("NCRA"), violated the following environmental statutes and implementing federal and state regulations at one or more of each Defendant's facilities: the Clean Air Act ("CAA"), 42 U.S.C. 7401-7671q for violations of (a) the federally-enforceable Kansas State Implementation Plan (the "Kansas SIP"), (b) the New Source Performance Standards ("NSPS") of the Act, 42 U.S.C. 7411, and (c) the Risk Management Program requirements of the Act, 42 U.S.C. 7412(r); the Emergency Planning and Community Right-to-Know Act ("EPCRA"), 42 U.S.C. 11001-11050; and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. 9601-9675. Pursuant to Section 113(a)(I) of the CAA, 42 U.S.C. 7413(a)(1), notice of the violations of the Kansas SIP that are alleged in this complaint have been given to the State of Kansas, and NCRA at least 30 days prior to the filing of the complaint. B. NCRA owns and operates a 85,000 barrel per day petroleum refinery located on Iron Horse Road, McPherson, Kansas ("Refinery") and an associated underground product storage facility in Conway, Kansas ("Conway"), collectively, the "Facilities". C. Defendant does not admit any liability to the United States or the State arising out of the transactions or occurrences alleged in the Complaint. D. The Parties recognize, and the Court by entering this Consent Decree finds, that this Consent Decree has been negotiated by the Parties in good faith and will avoid litigation between the Parties and that this Consent Decree is fair, reasonable, and in the public interest. 1
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 5 of 91 NOW, THEREFORE, before the taking of any testimony, without the adjudication or admission of any issue of fact or law except as provided in Section I, and with the consent of the Parties, IT IS HEREBY ADJUDGED, ORDERED, AND DECREED as follows: I. JURISDICTION AND VENUE 1. This Court has jurisdiction over the subject matter of this action, pursuant to 28 U.S.C. 1331, 1345, and 1355, and Section 113(b) of the CAA, 42 U.S.C. 7413(b); Section 325 of EPCRA, 42 U.S.C. 11045; and Sections 109(c) and 113 of CERCLA, 42 U.S.C. 9609(c) and 9613, and over the Parties. Venue lies in this District pursuant to Section 113(b) of the CAA, 42 U.S.C. 7413(b); EPCRA Section 325(b), 42 U.S.C. 11045(b); and CERCLA Section 113(b), 42 U.S.C. 9613(b), and 28 U.S.C, 1391 (b) and (c) and 1395(a), because the violations alleged in the Complaint are alleged to have occurred in, and Defendant conducts business in, this judicial district. For purposes of this Consent Decree, or any action to enforce this Decree, Defendant consents to the Court's jurisdiction over this Consent Decree and any such action and over Defendant and consents to venue in this judicial district. 2. For purposes of this Consent Decree, Defendant agrees that the Complaint states claims upon which relief may be granted pursuant to the following environmental statutes and their implementing federal and state regulations: the CAA, 42 U.S.C. 7401-7671q for violations of (a) the federally-enforceable Kansas SIP, (b) the NSPS provisions of the Act, 42 U.S.C. 7411, and (c) the Risk Management Program requirements of the Act, 42 U.S.C. 7412(r); EPCRA, 42 U.S.C. 11001-11050; and CERCLA, 42 U.S.C. 9601-9675. 2
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 6 of 91 II. APPLICABILITY 3. The obligations of this Consent Decree apply to and are binding upon the United States and the State, and upon Defendant and any successors, assigns, or other entities or persons otherwise bound by law. 4. No transfer of ownership or operation of the Facility, whether in compliance with the procedures of this Paragraph or otherwise, shall relieve Defendant of its obligation to ensure that the terms of the Consent Decree are implemented. At least 30 Days prior to such transfer, Defendant shall provide a copy of this Consent Decree to the proposed transferee and shall simultaneously provide written notice of the prospective transfer, together with a copy of the proposed written agreement, to EPA Region VII, the United States Attorney for the District of Kansas, and the United States Department of Justice, in accordance with Section XIV of this Decree (Notices). Any attempt to transfer ownership or operation of the Facility without complying with this Paragraph constitutes a violation of this Consent Decree. 5. Defendant shall provide a copy of this Consent Decree to all officers, employees, and agents whose duties might reasonably include compliance with any provision of this Consent Decree, as well as to any contractor retained to perform work required under this Consent Decree. Defendant shall condition any such contract upon performance of the work in conformity with the terms of this Consent Decree. 6. In any action to enforce this Consent Decree, Defendant shall not raise as a defense the failure by any of its officers, directors, employees, agents, or contractors to take any actions necessary to comply with the provisions of this Consent Decree. 3
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 7 of 91 III. OBJECTIVES 7. It is the purpose of the Parties to this Consent Decree to further the objectives of the CAA, the Kansas Air Quality Act, Kan. Stat. Ann. 65-3001 et seg, the reporting requirements of CERCLA Section 103 and EPCRA Section 304, the Risk Management Program requirements of Section 112(r)(7) of the CAA, and the recordkeeping and reporting requirements of EPCRA Sections 312 and 313, and to settle and resolve, as provided in Section XVIII of this Consent Decree, all allegations in the Complaint brought by the Plaintiffs in the matter. IV. DEFINITIONS 8. Terms used in this Consent Decree that are defined in the relevant statutes or in regulations promulgated pursuant to the relevant statutes shall have the meanings assigned to them in the Act or such regulations, unless otherwise provided in this Decree. Whenever the terms set forth below are used in this Consent Decree, the following definitions shall apply: a. "Complaint" shall mean the complaint filed by the United States and the State in this action; b. "Consent Decree" or "Decree" shall mean this Decree and all appendices attached hereto listed in Section XXIII; c. "Covered Process" as specified by 40 C.F.R. 68.3 shall mean "a process that has a regulated substance present in more than a threshold quantity as determined under 40 C.F.R. 68.115"; d. "Day" shall mean a calendar day unless expressly stated to be a business day. In computing any period of time under this Consent Decree, where the last day 4
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 8 of 91 would fall on a Saturday, Sunday, or federal holiday, the period shall run until the close of business of the next business day; e. "Defendant" shall mean National Cooperative Refinery Association ("NCRA"); f. "EPA" shall mean the United States Environmental Protection Agency and any of its successor departments or agencies; g. "Effective Date" shall have the definition provided in Section XV. h. "Facilities" shall mean: Defendant's petroleum refinery located in McPherson, Kansas ("Refinery"); and ii. Defendant's underground storage product facility located in Conway, Kansas ("Conway"); i. "Paragraph" shall mean a portion of this Decree identified by an arabic numeral; "Parties" shall mean the United States, the State, and Defendant(s); k. "RMP" shall mean the risk management plan required pursuant to 40 C.F.R. Part 68; "Regulated Substance" as specified by 40 C.F.R. 68.3 shall mean "any substance listed pursuant to section 112(r)(3) of the Clean Air Act, as amended, in 40 C.F.R. 68.130"; m. "Section" shall mean a portion of this Decree identified by a roman numeral; 5
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 9 of 91 Department of Health and Environment; behalf of EPA; n. "State" shall mean the State of Kansas acting through the Kansas o. "United States" shall mean the United States of America, acting on V. CIVIL PENALTY 9. Within 30 Days after the Effective Date of this Consent Decree, Defendant shall pay the sum of Seven Hundred Thousand Dollars ($700,000) as a civil penalty, together with interest accruing from the date on which the Consent Decree is lodged with the Court, at the rate specified in 28 U.S.C. 1961 as of the date of lodging as follows: (i) $475,000 to the United States and (ii) $225,000 to the Kansas Department of Health and Environment. 10. Defendant shall pay the civil penalty due to the United States by FedWire Electronic Funds Transfer ("EFT") to the U.S. Department of Justice in accordance with written instructions to be provided to Defendant, following entry of the Consent Decree, by the Financial Litigation Unit of the U.S. Attorney's Office for the District of Kansas, 500 State Avenue, Suite 360, Kansas City, Kansas 66101, (913) 551-6730. At the time of payment, Defendant shall send a copy of the EFT authorization form and the EFT transaction record, together with a transmittal letter, which shall state that the payment is for the civil penalty owed pursuant to the Consent Decree in United States and State of Kansas v. National Cooperative Refinery Association, and shall reference the civil action number and DOJ case number 90-5-1-1-06025/3, to the United States in accordance with Section XIV of this Decree (Notices); by email to and by mail to: EPA Cincinnati Finance Office 26 Martin Luther King Drive 6
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 10 of 91 Cincinnati, Ohio 45268 11. Defendant shall pay the civil penalty due to the State of Kansas (as specified in Paragraph 9) by certified or corporate check made payable to the Kansas Department of Health and Environment. At the time of payment, Defendant shall send a transmittal letter, which shall state that the payment is for the civil penalty owed pursuant to the Consent Decree in United States and Kansas v. National Cooperative Refinery Association, and shall reference the civil action number to the following address: Mrs Shelia Pendleton Office of Legal Services Kansas Department of Health and Environment 1000 SW Jackson, Suite 560 Topeka, KS 66612-1367 12. Defendant shall not deduct any penalties paid under this Decree pursuant to this Section or Section VIII (Stipulated Penalties) in calculating its federal or State or local income tax. 13. Unicracker Unit Heater VI. INJUNCTIVE RELIEF a. No later than 180 days after the Date of Entry, NCRA shall submit a complete application to the Kansas Department of Health and Environment (KDHE) to amend the Clean Fuels Project PSD construction permit dated June 27, 2005 (most recently revised 9/28/10). The application shall contain sufficient information to revise the NOx BACT emission limit for the Unicracker Unit Heater. i. This permit amendment shall be limited to the NOx emission limit for the Unicracker Unit Heater, and shall not constitute a re-opening of the existing PSD permit for the Clean Fuels Project with respect to any other requirement. 7
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 11 of 91 b. Following submission of the application to amend the June 27, 2005 (most recently revised 9/28/10) PSD construction permit, NCRA shall cooperate with KDHE by promptly submitting all information that KDHE requests following their receipt of the application. Upon issuance of a revised PSD construction permit, or in conjunction with such permitting, NCRA shall file any applications necessary to incorporate the requirements of the revised permit into the facility's CAA Title V permit. 14. Unicracker Flaring a. No later than 180 days after the Date of Entry, NCRA shall conduct initial training of refinery personnel responsible for the start-up of the Unicracker Unit. The training shall include proper start-up procedures to minimize emissions during normal and cold weather conditions. Refresher training shall be conducted for all such personnel once every calendar year during the life of the Consent Decree. 15. Risk Management Applicability Study for Refinery a. No later than 60 Days after the Date of Entry, NCRA shall review all inventories, process records, and lab tests to determine, in accordance with recognized and generally accepted good engineering practices, the quantity present at the Refinery of all Regulated Substances (and their components) listed at 40 C.F.R. 68.130. Such review shall be conducted consistent with the regulations found at 40 C.F.R. Part 68. b. For all Regulated Substances present at the Refinery (regardless of whether a substance exists in a Covered Process) as of the Date of Entry that are either a listed toxic substance, flammable substance, or part of a flammable mixture, NCRA shall submit a report to EPA within 90 Days after the Date of Entry containing the following information: 8
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 12 of 91 i. A description of each process, including a list of process streams, pressure vessels, and atmospheric tanks within each process. ii iii. A map including the boundaries of each process. The amount and CAS number of each Regulated Substance present in each process stream and the total amount in each process. iv. For materials that comprise a flammable or toxic mixture, include a list of all 112(r) regulated components. v. Include an explanation for omitting any Regulated Substance or flammable mixture (including NFPA rating, if applicable) in a process that will not be listed on the updated RMP referenced in sub-paragraph d. c. If it is determined that a process should have been considered a Covered Process under 40 C.F.R Part 68 and was not previously included in the RMP, NCRA shall no later than 180 Days after the Date of Entry, develop a program and complete all required documentation under 40 C.F.R. Part 68. NCRA shall include a notice of completion stating that it has completed this work in the next semi-annual report submitted after that date. d. If the review required under this paragraph determines that corrections are required to NCRA's RMP for the refinery, NCRA shall, within 210 Days of the Date of Entry, submit an updated RMP consistent with information found during this review. 16. EPCRA 312 Audit a. No later than 90 Days after the Date of Entry, NCRA shall retain a third party to conduct an EPCRA 312 Audit of the Tier II Forms for the Refinery and Conway submitted by NCRA for reporting year 2010..9
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 13 of 91 i. This EPCRA 312 Audit shall consider (1) all materials at the Refinery and Conway that are Extremely Hazardous Substances (EHSs) listed in 40 C.F.R. Part 355 Appendix A and B, or that contain more than 1% by weight of a listed EHS (or 0.1% by weight for a carcinogenic chemical, as provided in 40 C.F.R. 370.14(c)); and (2) all hazardous chemicals for which MSDSs must be developed under 29 C.F.R. 1910.1200, and which are present in quantities greater than or equal to 10,000 pounds. ii The EPCRA 312 Audit shall also review the practices used by NCRA to gather and track information relevant to Tier II reports, as well as the NCRA's procedures for training personnel to perform related tasks. b. At NCRA's option, the EPCRA 312 Audit may also review the Tier II forms for the Refinery and/or Conway for reporting years 2007, 2008, and/or 2009. c. No later than 120 Days after the Date of Entry, NCRA shall correct any Tier II forms identified by NCRA or the third party referenced in subparagraph a. as having inaccurate information and submit the revised forms to the Conway and/or McPherson fire departments (as applicable), the LEPC, and Kansas SERC. For materials listed in the resubmitted Tier II reports that contain more than 1% by weight of an EHS (or 0.1% by weight for a carcinogenic chemical), NCRA will provide the EHS constituent information in the Mixture Component Information section (6b) of the Kansas Tier II form. d. In its next semi-annual report submitted more than 120 Days after the Date of Entry, NCRA shall include a report summarizing the findings of the EPCRA 312 Audit. The report shall include the following information: i. what reporting periods were reviewed; 10
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 14 of 91 ii. iii. iv. what records were reviewed; what revised reports were submitted to which entities; and any revised procedures, processes, or training materials for completing and ensuring the accuracy of Tier II Forms that are developed in response to audit findings. e. In its Tier II submittals for the Refinery and Conway for reporting year 2011, NCRA shall provide the EHS constituent information in the Mixture Component Information section (6b) of the Kansas Tier II form for materials included on the Tier II form that contain more than 1% by weight of an EHS. 17. EPCRA 313 Audit a. No later than 90 Days after the Date of Entry, NCRA shall retain a third party to conduct a data quality review of TRI submittals (Form R's and/or Form A's) for the Refinery and Conway for reporting year 2010. This EPCRA 313 Audit shall consider the quantities of toxic chemicals listed in 40 C.F.R. 372.65 that are manufactured, processed, or otherwise used (as those terms are defined in 40 C.F.R. Part 372) at the Refinery and Conway. The Audit shall verify that all appropriate substances have been identified as potentially needing to be reported, and that the calculation methodologies used by NCRA to determine whether thresholds are being met or exceeded and the amounts being reported as released are accurate, i. The EPCRA 313 Audit shall include a review of relevant MSDSs, inventories, purchase records, sales records, and release records for the chemicals listed in 40 C.F.R. 372.65, as well as for substances containing more than a de minimis concentration (as that term is defined in 40 C.F.R. 372.38(a)) of a chemical listed in 40 C.F.R. 372.65. 11
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 15 of 91 The EPCRA 313 Audit shall also review the practices used by NCRA to gather information relevant to TRI submittals, as well as NCRA's procedures for training personnel to perform related tasks. b. At NCRA's option, the EPCRA 313 Audit may also include a data quality review of TRI submittals for the Refinery and Conway for reporting years 2007, 2008, and/or 2009. c. No later than 120 Days after the Date of Entry NCRA shall update any TRI submittal identified in the EPCRA 313 Audit as having contained inaccurate information. NCRA will submit the revised forms to EPA and the Kansas Department of Health and Environment, Bureau of Environmental Health. d. In its next semi-annual report submitted more than 120 Days after the Date of Entry, NCRA shall include a report summarizing the findings of the EPCRA 313 Audit. The report shall include the following information: i. what reporting periods were reviewed; ii. iii. iv. what records were reviewed; what revised reports were submitted to which entities; and any revised procedures, processes, or training materials for completing and ensuring the accuracy of TRI submissions that are developed in response to audit findings. e. With respect to listed chemicals that are also regulated under CAA Section 112(r), NCRA shall ensure that the maximum inventory information on the TRI submittals for the first reporting year after the Date of Entry is updated according to the RMP 12
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 16 of 91 Applicability Review conducted under Paragraph 15. 18. CERCLA/EPCRA Reporting Compliance Review. NCRA shall conduct a CERCLA/EPCRA Reporting Compliance Review, for both the Refinery and Conway facilities, of the one (1) calendar year (January 1 December 31) preceding the Date of Entry to identify any releases that may have been reportable under Section 103(a) of CERCLA, 42 U.S.C. 9603(a), and Section 304 of EPCRA, 42 U.S.C. 11004, or similar or corresponding state reporting regulations. NCRA shall complete the following activities no later than one hundred and twenty (120) Days after the Date of Entry: a. For the releases that occurred on or about: November 28, 2005 December 22, 2005, January 9-11, 2006, February 2, 2007, June 8-11, 2007; and for all releases identified in the Compliance Review for which NCRA seeks a resolution of liability, NCRA shall: i. Submit a CERCLA/EPCRA Compliance Review Report to EPA Region 7 that identifies potential violations of Section 103(a) of CERCLA and Section 304 of EPCRA, or similar or corresponding state reporting regulations; ii. For any EPCRA 304(a) or CERCLA 103 release reports where a substance was not reported to the NRC, State of Kansas, or LEPC, make the necessary notifications; and iii. For EPCRA 304(a) release reports where the amount released was inaccurate, update and resubmit the written follow-up reports required under 304(c). 13
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 17 of 91 b. Based on the Compliance Review, correct and/or update release reporting procedures as necessary and identify any specific steps NCRA shall take to ensure compliance in the future. NCRA shall submit a copy of any corrected reporting procedures for both the Refinery and Conway to EPA with the next semi-annual report submitted after the Compliance Review is completed; and c. Conduct training for NCRA's environmental compliance personnel to instruct them on the reporting requirements of Section 103(a) of CERCLA, 42 U.S.C. 9603(a), and Section 304 of EPCRA, 42 U.S.C. 11004, or similar or corresponding state reporting regulations, and to acquaint these personnel with the procedures adopted by NCRA to meet those requirements. NCRA shall certify completion of the training with the next semiannual report submitted after the training is completed. 19. EPCRA/CERCLA Continuous Release Review. For the one (1) reporting year prior to the Date of Entry, NCRA shall conduct an audit of all CERCLA/EPCRAreportable releases of hazardous substances (as designated in CERCLA Section 102(a)) and extremely hazardous substances (as defined under 40 C.F.R. Part 355, Appendices A and B) from the Refinery and Conway and determine whether any Continuous Release Report(s) in accordance with 40 C.F.R. Parts 302 and 355 is appropriate for either facility. a. NCRA shall complete the following activities no later than one hundred and twenty (120) Days after the Date of Entry: i. For all continuous releases for which NCRA seeks a resolution of liability, submit a Continuous Release Review Report to EPA and the Kansas SERC that identifies releases at the Refinery and Conway which should have been reported as 14
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 18 of 91 "Continuous," within the meaning of 40 C.F.R. 302.8 or 355.32, or similar or corresponding state reporting regulations; ii. Complete notification calls to the LEPC, SERC, and NRC for each facility; iii. Based on the Continuous Release Review, correct and/or update release reporting procedures and identify specific steps NCRA shall take to ensure compliance in the future. NCRA shall submit a copy of any corrected procedures to EPA for both facilities in the next semi-annual report filed after the completion of the Continuous Release Review Report; and iv. Conduct training for NCRA's environmental compliance personnel to instruct them on the reporting requirements of 40 C.F.R. Part 302, or similar or corresponding state reporting regulations, and to acquaint these personnel with the procedures adopted by NCRA. NCRA shall certify completion of the training with the next semi-annual report submitted after the training is completed. b. No later than thirty Days after the notification calls are made NCRA shall submit any initial written notification reports required under 40 C.F.R. Parts 302 and 355 to the LEPC, SERC, and NRC. c. A year after notification calls are made, NCRA shall review information concerning all releases for the past year to determine if the information reported in the Refinery's and Conway's continuous release reports are still accurate. Within 1 year and 30 Days of any notification calls NCRA shall submit the written follow-up notification report to the EPA, as required under 40 C.F.R. Part 302. 15
Case 6:12-cv-01110-EFM-JP0 Document 3-1 Filed 03/26/12 Page 19 of 91 20. EPCRA 312 Tier II Fees. No later than 30 Days of the Date of Entry, NCRA shall pay the retroactive Kansas Tier H fees to KDHE for Conway for calendar years 2005, 2006, 2007, and 2008. NCRA shall provide proof of the payment to EPA in its next semiannual report. 21. Refinery Risk Management -- Toxic Worst Case Analysis. a. Within 210 Days of the Date of Entry, NCRA shall determine the off-site impacts (as defined by 40 C.F.R. 68.30 and 68.33) within the toxic worst case circle of the Rapid Acid Transfer System (RATS) vessel and update the RMP to include the identified off-site impacts. b, NCRA will include a notice of completion stating that it has completed this work in the next semi-annual report submitted after that date. 22. Refinery Risk Management -- Process Safety Information. For all pressure vessels and tanks (and their associated pressure-relief valves) and atmospheric storage vessels in the Alkylation Unit (including tanks E-30 and E-31), as well as tanks E-32 and E-33 and their associated pressure-relief valves, NCRA shall: a. Compile and document written information pertaining to the applicable design codes and standards; b. Document compliance with recognized and generally accepted good engineering practices; and c. For any such pressure vessels and tanks (and their associated pressure-relief valves) and atmospheric storage vessels designed or constructed in accordance 16
Case 6:12-cv-01110-EFM-JPO Document 34 Filed 03/26/12 Page 20 of 91 with codes, standards, or practices that are no longer in general use, determine and document whether that equipment is designed, inspected, tested, maintained, and operated in a safe manner. d. NCRA will comply with the requirements of this paragraph within 180 Days of the Date of Entry. NCRA will include a notice of completion stating that it has completed this work in the next semi-annual report submitted after that date. 23. Refinery Risk Management -- Special Tank /Container Report. NCRA shall, within ninety (90) Days after the Date of Entry, submit a report to EPA containing information as described below. a. The reporting requirements of this Paragraph shall be limited to the following equipment in the Risk Management Program processes at the NCRA refinery: E-30, E-31, E-32, E-33; ii. iii. iv. VV-0247 (the Number 2 Acid Settler); VV-0436 (the Number I Acid Settler); any equipment that contains 250,000 pounds or more of a RMP-regulated flammable substance or 250 pounds or more of hydrogen fluoride/hydrofluoric acid; and v, pressure-relieving devices for this specified equipment. b. The report shall include, at a minimum: i. the date of the most recent internal, external and, if performed, on-stream inspection/test; ii the scheduled date for the next planned internal, external and, if applicable, on-stream inspection/test; 17
Case 6:12-cv-01110-E.FM-JP0 Document 3-1 Filed 03/26/12 Page 21 of 91 iii. an explanation of how the frequency of inspections referenced in Subparagraphs 23.b.i and 23.b.ii are consistent with applicable manufacturer's recommendations, good engineering practices, and industry standards; iv. for inspections conducted at intervals prescribed by NCRA's Risk-Based Inspection Program, provide: an explanation and supporting documentation of how the relevant inspection interval is consistent with generally accepted good engineering practices and/or manufacturers' recommendations; v. for the most recent internal, external and, if performed, onstream inspection(s)/test(s) provide: I. the date of the inspection(s)/test(s); 2. the serial number or other identifier of the equipment on which the inspection(s)/test(s) were performed; 3. a description of the inspection(s)/test(s) performed; 4. the name and credentials of the inspector(s); 5. the name of inspector's employer; 6. the inspector's certification(s) to perform the relevant inspections; 7. the inspector's report of the results of the inspection(s)/test(s); and 8. any subsequent reports or action cards addressing findings resulting from the most recent inspections/tests; 18
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 22 of 91 vi. all process safety documentation required pursuant to Paragraph 22 above for the equipment referenced in this Paragraph. In addition, when applicable under standards, determine and document the calculated life of the equipment referenced in this Paragraph, or provide documentation explaining why such a determination is not needed; and vii. A certification of the contents of the Report, pursuant to Paragraph 44 (Certification). 24. Refinery Risk Management -- Process Hazard Analysis (PHA). a. NCRA shall, with the first semi-annual report submitted more than ninety (90) Days after the Date of Entry, submit the most recent PHA report(s) for the Alkylation Unit and the most recent PHA report(s) for the Terminal Control Center that concern tanks E-32 and E-33, as well as PHA reports detailing the steps taken and further planned actions, including an approximate schedule, to resolve all action items identified in those reports. b. NCRA shall submit, in each subsequent semi-annual report, information describing the steps taken to address the PHA findings and recommendations for the Alkylation Unit and any PHA findings and recommendations for the Terminal Control Center pertaining to tanks E-32 and E-33, until all identified findings and recommendations are resolved or until such time as EPA notifies NCRA in writing that no further reports are required. c. NCRA shall, by December 31, 2012, resolve all findings and recommendations that do not require significant capital costs / engineering estimates. If resolution of all findings and recommendations cannot be completed within the timeframe established above, NCRA shall, by November 30, 2012, submit documentation to EPA that: i. identifies unresolved findings and recommendations; 19
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 23 of 91 ii summarizes steps taken to date to resolve these findings and recommendations; iii iv. explains reasons the resolution has not been completed; provides anticipated actions to resolve the findings and recommendations; and v. provides a time line for completion. d. For PHA items that do require significant capital costs / engineering estimates. NCRA shall, by December 31, 2014, resolve all findings and recommendations for the Alkylation Unit; and by December 31, 2013, resolve all findings and recommendations for the Terminal Control Center pertaining to tanks E-32 and E-33. If resolution of these findings and recommendations cannot be completed within the timeframe established above, NCRA shall, thirty (30) Days prior to the respective deadlines established in this Paragraph, submit documentation to EPA that: i. identifies unresolved findings and recommendations; ii. summarizes steps taken to date to resolve these findings and recommendations; iii. iv. explains reasons the resolution has not been completed; provides anticipated actions to resolve the findings and recommendations; and v. provides a time line for completion. 25. Refinery Risk Management 2010 Compliance Audit. 20
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 24 of 91 a. NCRA shall, in the first semi-annual report filed more than ninety (90) Days after the Date of Entry, submit a report to EPA detailing the responses to each of the findings identified in the 2010 Refinery Compliance Audit. This report shall: i. identify the disposition of each finding identified in the 2010 Compliance Audit, including any findings that have been closed out; provide a synopsis of the resolution of each finding; and iii. for findings that have not been closed out, provide a summary of the steps taken as of the date of the report, describe further planned actions, and set forth a schedule for the resolution of each open finding. b. NCRA shall submit in its semi-annual reports, information describing the steps taken to resolve all 2010 Compliance Audit findings and recommendations until all identified findings and recommendations are resolved or until such time as EPA notifies NCRA in writing that no further reports are required. 26. Conway Risk Management - Propane Caverns. a. No later than 180 Days after the Date of Entry, NCRA shall modify the Risk Management program for Conway to include all applicable requirements of 40 C.F.R. Part 68 for the caverns actively used to store propane at Conway. b. In the first semi-annual report submitted more than 180 Days after the Date of Entry, NCRA shall include a written report which includes Process Safety Information/Mechanical Integrity information for the caverns actively used to store propane including: 21
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 25 of 91 i. identification of any KDHE regulations and/or applicable industry standards concerning process safety or mechanical integrity used for the caverns actively used to store propane; ii. iii. iv. the date of the most recent inspection/test; the scheduled date for the next planned inspection/test; and an explanation of how the inspection frequencies are consistent with applicable KDHE regulations, good engineering practices, and industry standards. If the last test/inspection is outside the timeframe allowed by KDHE regulations and/or industry standards it shall be tested/inspected no later than 180 Days after the Date of Entry. c. In the first semi-annual report submitted more than 210 Days after the Date of Entry, NCRA shall include a notice of completion stating that it has completed all work required in Subparagraphs (a) and (b). d. No later than 210 Days after the Date of Entry, NCRA shall submit an updated Risk Management Plan for Conway that includes the caverns actively used to store propane. 27. Conway Risk Management - RMP Applicability Study for Conway. No later than 60 Days after the Date of Entry, NCRA shall review all inventories and meter records to determine, in accordance with recognized and generally accepted good engineering practices, the quantity present at Conway of all Regulated Substances (and their components) listed at 40 C.F.R. 68.130. Such review shall be conducted consistent with the regulations found at 40 C.F.R. Part 68. 22
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 26 of 91 a. For all Regulated Substances used or stored at Conway (regardless of whether a substance exists in a Covered Process) as of the Date of Entry that are either a listed toxic substance, flammable substance, or part of a flammable mixture, NCRA shall submit a report to EPA within 90 Days after the Date of Entry containing the following information: i. A description of each process, including a list of all caverns and other vessels containing any Regulated Substance; ii. A map indicating the location of each cavern or other vessel containing a Regulated Substance; iii. The amount and CAS number of each Regulated Substance present in each cavern or vessel and the total amount in each process; iv. The maximum intended amounts of each Regulated Substance present (in pounds), considering administrative controls; v. For materials that comprise a flammable or toxic mixture, include a list of all 112(r)-regulated components and NFPA rating. vi. Include an explanation for omitting any Regulated Substance or flammable mixture (including NFPA rating, if applicable) in a process that will not be listed on the updated RMP referenced in sub-paragraph c. b. If it is determined that caverns or other vessels should have been considered Covered Processes, or part of a Covered Process, under 40 C.F.R. Part 68 and were not previously included in the RMP, NCRA shall no later than 180 Days after the Date of Entry develop a program and complete all required documentation under 40 C.F.R. Part 68, NCRA 23
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 27 of 91 shall include a notice of completion stating that it has completed this work in the next semiannual report submitted after that date. c. If the review required under this paragraph determines that corrections are required to NCRA's RMP for Conway, NCRA shall, within 210 Days after the Date of Entry, submit an updated RMP consistent with the information found during this review. 28. Conway Risk Management - Process Safety Information for Conway. a. NCRA shall develop a comprehensive, written list of maximum inventories for each RMP-covered cavern (including caverns actively used to store propane) at Conway, as determined by sonar surveys and/or administrative controls. NCRA shall conduct training to acquaint the operators with the maximum intended inventories, including procedures for locating any updated or revised maximum inventories. b. In the first semi-annual report submitted more than 90 Days after the Date of Entry, NCRA shall include a notice of completion stating that it has completed all work required in this paragraph. 29. Conway Risk Management - Process Hazard Analysis for Conway. a. NCRA shall commence a Process Hazard Analysis for all covered processes at Conway, including the caverns actively used to store propane no later than January 4, 2012. NCRA shall submit to EPA the PHA report and a report of the findings and planned actions, including an approximate schedule for the completion of all findings, no later than April 1, 2012. b, NCRA shall submit, in each semi-annual report, information describing the steps taken to address all findings and recommendations until all identified 24
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 28 of 91 findings and recommendations are resolved or until such time as EPA notifies NCRA in writing that no further reports are required. c. NCRA shall, by April 1, 2014, resolve all findings and recommendations that do not require significant capital costs / engineering estimates. If resolution of all findings and recommendations cannot be completed within the timeframe established above, NCRA shall, by March 1, 2014, submit documentation to EPA that: i. identifies unresolved findings and recommendations; ii. summarizes steps taken to date to resolve these findings and recommendations; iii. iv. explains reasons the resolution has not been completed; provides anticipated actions to resolve the findings and recommendations; and v. provides a time line for completion. d. For PHA items that do require significant capital costs /engineering estimates, NCRA shall, by December 31, 2015 resolve all findings and recommendations. If resolution of these findings and recommendations cannot be completed within the timeframe established above, NCRA shall, by November 30, 2015, submit documentation to EPA that: identifies unresolved findings and recommendations; ii. summarizes steps taken to date to resolve these findings and recommendations; iii. explains reasons the resolution has not been completed; 25
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 29 of 91 iv. provides anticipated actions to resolve the findings and recommendations; and v. provides a time line for completion. 30. Conway Risk Management - Compliance Audit for Conway. a. By June 1, 2013, NCRA shall commence a compliance audit at Conway (ensuring that the caverns actively used to store propane are included in the review) consistent with 40 C.F.R. 68.79. The Compliance Audit and a report of the audit findings and planned actions, including an approximate schedule for the resolution of all findings, shall be submitted to EPA in the semi-annual report to be submitted in January 2014. b. NCRA shall submit in each subsequent semi-annual report information describing the steps taken to resolve all Conway Compliance Audit findings and recommendations until all identified findings and recommendations are resolved or until such time as EPA notifies NCRA in writing that no further reports are required. NCRA shall by June 1, 2015, resolve all findings and recommendations of the Compliance Audit. If resolution of all findings and recommendations cannot be completed within the time frame established above, NCRA shall, by May 1, 2015 submit documentation to EPA that: identifies unresolved findings and recommendations; ii. summarizes steps taken to resolve these findings and recommendations; iii. iv. explains reasons the resolution has not been completed; provides anticipated actions to resolve the findings and recommendations; and provides a time line for completion. 26
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 30 of 91 VII. SUPPLEMENTAL ENVIRONMENTAL PROJECTS 31. Defendant shall implement the Supplemental Environmental Projects ("SEPs"), in accordance with all provisions of Appendix A of this Consent Decree. The SEPs shall be completed in accordance with the schedule set forth in Appendix A. 32. Defendant is responsible for the satisfactory completion of the SEPs in accordance with the requirements of this Decree. "Satisfactory completion" means purchase and delivery of the equipment identified in Appendix A of this Consent Decree to the intended recipient. As to the "Reverse 911" SEP identified in Appendix A, Paragraph 5, satisfactory completion shall mean contracting and funding of the "Reverse 911" program and the satisfactory performance of that contract. Defendant may use contractors or consultants in planning and implementing any SEP, but Defendant remains responsible for the satisfactory completion of the SEPs. 33. NCRA certifies that it is not a party to any open federal financial assistance transaction that is funding or could be used to fund the same activity as the SEPs. NCRA further certifies that, to the best of its knowledge and belief after reasonable inquiry, there is no such open federal financial transaction that is funding or could be used to fund the same activity as the SEPs, nor has the same activity been described in an unsuccessful federal financial assistance transaction proposal submitted to EPA within two years of the date of this settlement (unless the project was barred from funding as statutorily ineligible). For the purposes of this certification, the term "open federal financial assistance transaction" refers to a grant, cooperative agreement, loan, federally-guaranteed loan guarantee or other mechanism for providing federal financial assistance whose performance period has not yet expired. 27
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 31 of 91 34. With regard to the SEPs, Defendant certifies the truth and accuracy of each of the following: a. that all cost information provided to EPA in connection with EPA's approval of the SEPs is complete and accurate and that Defendant in good faith estimates that the cost to implement each SEP is set forth in Appendix A; b. that, as of the date of executing this Decree, Defendant is not required to perform or develop the SEPs by any federal, state, or local law or regulation and is not required to perform or develop the SEPs by agreement, grant, or as injunctive relief awarded in any other action in any forum; c. that the SEPs are not projects that Defendant was planning or intending to construct, perform, or implement other than in settlement of the claims resolved in this Decree; d. that Defendant has not received and will not receive credit for the SEPs in any other enforcement action; and e. that Defendant will not receive any reimbursement for any portion of the SEPs from any other person. 35. SEP Completion Report a. Within 30 Days after the date set for completion of all SEPs identified in Appendix A, except the Reverse 911 SEP, Defendant shall submit a SEP Completion Report to the United States and the State, in accordance with Section XV of this Consent Decree (Notices). Within 30 Days after the date set for completion of the Reverse 911 SEP, identified in Appendix A, Paragraph 5, Defendant shall submit a SEP Completion Report to 28
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 32 of 91 the United States and the State in accordance with Section XV of this Consent Decree. The SEP Completion Reports shall contain the following information: i. a detailed description of the SEP as implemented; ii. a description of any problems encountered in completing the SEP and the solutions thereto; iii. iv. an itemized list of all eligible SEP costs expended; certification that each SEP has been fully implemented pursuant to the provisions of this Decree; and v. a description of the environmental and public health benefits resulting from implementation of the SEPs (with a quantification of the benefits and pollutant reductions, if feasible). 36. EPA may, in its sole discretion, require information in addition to that described in the preceding Paragraph, in order to evaluate Defendant's completion report. 37. After receiving the SEP Completion Report, and consulting the State, the United States shall notify Defendant whether or not Defendant has satisfactorily completed the SEPs. If Defendant has not completed the SEPs in accordance with this Consent Decree, stipulated penalties may be assessed under Section IX of this Consent Decree. Unless the United States has notified Defendant that it contends that Defendant has not satisfactorily completed all SEPs, the stipulated penalties associated with that failure will cease to accrue after sixty (60) Days after the receipt of the Completion Report. However, stipulated penalties will continue to accrue once the United States provides such notice. 29
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 33 of 91 38. Disputes concerning the satisfactory performance of the SEPs and the amount of eligible SEP costs may be resolved under Section XI of this Decree (Dispute Resolution). No other disputes arising under this Section shall be subject to Dispute Resolution. 39. Each submission required under this Section shall be signed by an official with knowledge of the SEP and shall bear the certification language set forth in Paragraph 44. 40. Any public statement, oral or written, in print, film, or other media, made by Defendant making reference to the SEP under this Decree shall include the following language: "This project was undertaken in connection with the settlement of an enforcement action, United States v. NCRA, taken on behalf of the U.S. Environmental Protection Agency under the Clean Air Act, Comprehensive Environmental Response, Compensation, and Liability Act, and/or the Emergency Planning and Community Right to Know Act." 41. For federal income tax purposes, Defendant agrees that it will neither capitalize into inventory or basis nor deduct any costs or expenditures incurred in performing the SEPs. VIII. REPORTING REQUIREMENTS 42. Defendant shall submit the following reports: a. Within thirty (30) calendar Days after the end of the first semiannual period after lodging of the Consent Decree (i.e., January 31 or July 31), and on each subsequent January 31 and July 31 thereafter, until termination of this Decree pursuant to Section XIX, Defendant shall submit to EPA and the State a semi-annual report for the preceding six month period that shall include: 30
Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 Page 34 of 91 Paragraph 13; i. The status of permit applications/modifications pursuant to ii. The date of the latest training conducted pursuant to Paragraph 14; iii. A description of any problems anticipated with respect to meeting the requirements of this Decree together with implemented or proposed solutions; iv. A description of all Supplemental Environmental Projects and implementation activity in accordance with this Decree, including, at a minimum, a narrative description of activities undertaken; status of any construction or compliance measures, including the completion of any milestones set forth in the SEP Work Plan attached as Appendix A to this Decree, and a summary of costs incurred since the previous report; v. Any such additional matters as Defendant believes should be brought to the attention of the United States and the State of Kansas; and vi. Any additional items required by any other Paragraph of this Consent Decree to be submitted with a semi-annual report including but not limited to reports required under Paragraphs 15, 16, 17, 18, 19, 20, 21, 23, 24, 25, 26, 27, 28, 29, and 30. vii. The report shall also include a description of any noncompliance with the requirements of this Consent Decree and an explanation of the violation's likely cause and of the remedial steps taken, or to be taken, to prevent or minimize such violation. If Defendant violates, or has reason to believe that it may violate, any requirement of this Consent Decree, Defendant shall notify the United States and the State of such violation and its likely duration, in writing, within ten working Days of the Day Defendant first becomes aware of the violation, with an explanation of the violation's likely cause and of the remedial 31