regon Kate Brown, Governor February 24, 2017 CERTIFIED MAIL No. 7014 2870 0001 3373 5807 K&J Petroleum, LLC c/o David E. Grein, Registered Agent 1030 SW Monison Street Portland, OR 97205 Re: Notice of Civil Penalty Assessment and Order Case No. AQ/AC-NWR-2016-164 Department of Environmental Quality Office of Compliance and Enforcement 700 NE Multnom ah St Ste 600 Por tland, OR 97232-4100 (5 03) 229-5696 FAX (5 03) 229-5100 ITY: 711 This letter is to info1m you that the Department of Environmental Quality (DEQ) has issued you a civil penalty of $3,845 for operating a gasoline dispensing facility at 4450 SE McGloughlin Boulevard in Portland without an Air Contaminant Discharge Pe1mit (ACDP) from DEQ, and for failing to provide monthly records of the facility's total monthly volume of gasoline throughput. DEQ previously requested that you remedy both of these violations in a July 20, 2016, Warning Letter with Opportunity to Correct and a September 13, 2016, Pre-Enforcement Notice, in addition to phone calls from DEQ staff. However, K&J Petroleum, LLC has not corrected either of these violations. DEQ also cited other violations of Oregon air quality regulations, without penalty, in the attached Notice of Civil Penalty Assessment and Order, including: • Failing to install pressure vacuum "PV" valves on the gasoline storage tank vent pipes; • Failing to post a "no topping off' sign at the facility; • Failing to replace or repair excessively worn hoses on three gasoline dispensers; • Failing to keep and make available during the inspection, operation and maintenance records for the vapor balance system; and • Failing to maintain spill containment buckets in a manner that prevents a release of gasoline to the environment by allowing standing liquid to accumulate in two of the buckets. DEQ issued this penalty because operating without an ACDP and failing to maintain monthly gasoline throughput records are serious violations. Gasoline dispensing facilities are subject to pe1mitting, record-keeping, spill prevention and testing requirements because gasoline vapors contain benzene, a known cancer-causing chemical. Controlling gasoline vapors reduces benzene exposures at and near gasoline dispensing facilities, and contributes to continuing compliance with federal ozone standards to protect the public's health and the environment. When a company subject to permitting requirements operates without a permit, the company has avoided regulation and gained an economic advantage over other similar facilities that did timely obtain their permit by avoiding or delaying the costs of complying with the law. Included in Section IV is an order requiring you to submit monthly gasoline throughput records to DEQ for the period you owned the facility (from on or about December 2011 to January 2017).
Transcript
regon Kate Brown, Governor
February 24, 2017
CERTIFIED MAIL No. 7014 2870 0001 3373 5807
K&J Petroleum, LLC c/o David E. Grein, Registered Agent 1030 SW Monison Street Portland, OR 97205
Re: Notice of Civil Penalty Assessment and Order Case No. AQ/AC-NWR-2016-164
Department of Environmental Quality Office of Compliance and Enforcement
700 NE Multnom ah St Ste 600 Portland, OR 97232-4100
(503) 229-5696 FAX (503) 229-5100
ITY: 711
This letter is to info1m you that the Department of Environmental Quality (DEQ) has issued you a civil penalty of $3,845 for operating a gasoline dispensing facility at 4450 SE McGloughlin Boulevard in Portland without an Air Contaminant Discharge Pe1mit (ACDP) from DEQ, and for failing to provide monthly records of the facility's total monthly volume of gasoline throughput. DEQ previously requested that you remedy both of these violations in a July 20, 2016, Warning Letter with Opportunity to Correct and a September 13, 2016, Pre-Enforcement Notice, in addition to phone calls from DEQ staff. However, K&J Petroleum, LLC has not corrected either of these violations.
DEQ also cited other violations of Oregon air quality regulations, without penalty, in the attached Notice of Civil Penalty Assessment and Order, including:
• Failing to install pressure vacuum "PV" valves on the gasoline storage tank vent pipes; • Failing to post a "no topping off' sign at the facility; • Failing to replace or repair excessively worn hoses on three gasoline dispensers; • Failing to keep and make available during the inspection, operation and maintenance records
for the vapor balance system; and • Failing to maintain spill containment buckets in a manner that prevents a release of gasoline
to the environment by allowing standing liquid to accumulate in two of the buckets.
DEQ issued this penalty because operating without an ACDP and failing to maintain monthly gasoline throughput records are serious violations. Gasoline dispensing facilities are subject to pe1mitting, record-keeping, spill prevention and testing requirements because gasoline vapors contain benzene, a known cancer-causing chemical. Controlling gasoline vapors reduces benzene exposures at and near gasoline dispensing facilities, and contributes to continuing compliance with federal ozone standards to protect the public's health and the environment. When a company subject to permitting requirements operates without a permit, the company has avoided regulation and gained an economic advantage over other similar facilities that did timely obtain their permit by avoiding or delaying the costs of complying with the law.
Included in Section IV is an order requiring you to submit monthly gasoline throughput records to DEQ for the period you owned the facility (from on or about December 2011 to January 2017).
K&J Petroleum, LLC Case No. AQ/AC-NWR-2016-164 Page 2
If you wish to appeal this matter, DEQ must receive a request for a contested case hearing within 20 calendar days from your receipt of this letter. The hearing request must be in writing. Send your hearing request to DEQ Office of Compliance and Enforcement - Appeals:
Via mail - 700 NE Multnomah Street, Suite #600, Po1iland, Oregon 97232 Via email - [email protected] Via fax - 503-229-5100
Once DEQ receives your request, we will mTange to meet with you to discuss this matter. If DEQ does not receive a timely written hearing request, the penalty will become due. Alternatively, you can pay the penalty by sending a check or money order to the above address .
The attached Notice fmiher details DEQ's reasons for issuing the penalty and provides finiher instructions for appealing the penalty. Please review it and refer to it when discussing this case with DEO.
DEQ may allow you to resolve paii of your penalty through the completion of a Supplemental Environmental Project (SEP). SEPs are environmental improvement projects that you sponsor in lieu of paying your penalty. SEP documents are available on the internet at: http://www.oregon.gov/deq/Regulations/Pages/SEP.aspx, or by calling the number below to request a paper copy.
DEQ's rules are available on the internet at: http://www.oregon.gov/deg/Regulations/Pages/Statutes.aspx, or by calling the number below to request a paper copy.
If you have any questions, please contact DEQ Environmental Law Specialist Jenny Root at (503) 229-5874.
Sincerely,
Sai·ah G. Wheeler, Acting Manager Office of Compliance and Enforcement
Enclosures
cc: Dan DeFehr, No1ihwest Region Office, DEQ Cindy Troupe, AQ, HQ, DEQ
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BEFORE THE ENVIRONMENTAL QUALITY COMMISSION
OF THE STATE OF OREGON
IN THE MATTER OF: ) K&J PETROLEUM, LLC )
an Oregon limited liability company, ) )
Respondent. )
NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER
NO. AQ/AC-NWR-2016-164
6 I. AUTHORITY
7 This Notice and Order is issued pursuant to Oregon Revised Statutes (ORS) 468.100 and
8 468.126 through 468.140, ORS Chapters 183 and 468A and Oregon Administrative Rules (OAR)
9 Chapter 340, Divisions 011, 012, 200,216,242 and 244.
10 II. FINDINGS OF FACT
11 1. Respondent owned and operated a gasoline dispensing facility (GDF) at 4450 SE
12 McLoughlin Boulevard Road, in Portland, Oregon (the Facility) from on or about December
13 2011 to January 2017.
14 2. During the period Respondent owned the Facility, it had three 12,000-gallon
15 underground gasoline storage tanks that were each equipped with a stage I vapor balance system
16 intended to capture vapors while transferring gasoline from tanker trucks into storage tanks in
17 accordance with OAR 340-244-0234(4)(b) and OAR 340-244-242(l)(a).
18 3. The Facility also had pumps used for dispensing gasoline to its customers. The
19 pumps were equipped with stage II vapor controls intended to capture vapors while transferring
· 20 gasoline from the pumps to an individual vehicle, in accordance with OAR 340-242-0520(1).
21 4. Pursuant to Oregon Administrative Rule (OAR) 340-216-0020(3), no person may
22 construct, install, establish, develop or operate any air contaminant source listed in OAR 340-
23 216-8010 without first obtaining an Air Contaminant Discharge Permit (ACDP) from the Oregon
24 Department of Environmental Quality (DEQ). Table 1 of OAR 340-216-8010, Part B, Item 35
25 requires an air contaminant discharge permit (ACDP) for gasoline dispensing facilities (GDFs),
26 except for GDFs that have a monthly throughput ofless than 10,000 gallons of gasoline.
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CASE NO. AQ/AC-NWR-20!6-164
I 5. According to an annual report submitted to DEQ by the previous owner of the
2 Facility, during calendar year 2011, the monthly gasoline throughput for the Facility exceeded
3 65,000 gallons.
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In or about December 2011, Respondent began operating the Facility.
According to annual reports submitted to DEQ by Respondent during calendar
6 years 2014 and 2015, the monthly gasoline throughput for the Facility exceeded 56,000 gallons.
7 8. Respondent did not obtain an ACDP from DEQ when it began operating the
8 Facility in or about December 2011.
9 9. Table 2, paragraph I of OAR 340-244-242 requires owners and/or operators of
10 existing GDFs to install and operate on all gasoline storage tanks, a vapor balance system that
11 meets the design criteria in paragraphs (a) through (h) of that rule. In order to have a complete
12 vapor balance system, OAR 340-244-242, Table 2, paragraph I (g) requires that pressure vacuum
13 (PV) vent valves must be installed on the gasoline storage tank vent pipes.
14 10. OAR 340-242-0520(2)( c) requires each owner or operator of a GDF subject to
15 stage II vapor collection requirements to replaee, repair or modify any worn or ineffective
16 component or design element to ensure the vapor-tight integrity and efficiency of the stage II
17 vapor collection system.
18 II. OAR 340-244-0240(1 )( c) requires owners or operators of GDFs to post a sign at
19 the facility instructing a person filling up a motor vehicle to not top off the vehicle tank.
20 12. OAR 340-244-0248(1) requires each owner or operator ofa GDF to, among other
21 requirements, keep the following records for a minimum of five years and to make the records
22 available for inspection by DEQ during the course of a site visit:
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Total throughput volume of gasoline, in gallons, for each calendar month;
Operation and maintenance of all vapor balance equipment required by
25 OAR 340-244-242. Any vapor balance component defect must be logged and tracked by station
26 personnel using fotms provided by DEQ or a reasonable facsimile.
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CASE NO. AQ/AC-NWR-2016-164
1 13. OAR 340-150-0310 requires Respondent to install, operate and maintain spill
2 prevention equipment for its underground storage tanks, such as a spill catchment basin or a spill
3 bucket that will prevent the release of a regulated substance to the environment when the transfer
4 hose is detached from the fill pipe.
5 14. On July 15, 2016, DEQ conducted an inspection at the Facility. During the
6 inspection, DEQ documented the following:
7 a. Open-atmospheric valves were installed on the gasoline storage tank vent
8 pipes instead of PV vent valves as required;
9 b. No sign was posted instructing a person filling up a motor vehicle to not
IO top off the vehicle tank;
11 C. The Facility had three gasoline dispensers with components that were
12 worn or ineffective to control gasoline vapors as follows: The breakaway/whip-it hose on
13 dispenser 1 (92 grade fuel) was excessively worn and the dispenser hoses on dispensers 5 (89
14 grade fuel) and 6 (87 grade fuel) were excessively worn;
15 d. No operation and maintenance records for the vapor balance system were
16 available to review at the time of the inspection, nor did it appear that Respondent had been
17 keeping them;
18 e. No monthly gasoline throughput records were available, despite the fact
19 Respondent has reported monthly amounts on its 2014 and 2015 annual reports; and
20 f. Spill containment buckets, designed to contain approximately five gallons
21 of gasoline in the event of a release, contained subsubtantial standing liquid, diminishing the
22 buckets' effectiveness for preventing a release of gasoline when transfer hoses are detached from
23 the fill pipes. The spill containment buckets on two of the the fill pipes contained liquid that was
24 within three inches of the edge of the product tank.
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In January 2017, Respondent sold the Facility.
To date, Respondent never submitted an application nor paid application fees to
27 DEQ for an ACDP during its period of ownership and operation of the Facility from December
Page 3 - NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER
CASE NO. AQ/AC-NWR-2016-164
1 2011 to Janaury 2017, nor has Respondent submitted information to DEQ to document monthly
15 If you fail to file a request for hearing in writing within 20 calendar days of receipt of the
16 Notice, the Notice will become a final order by default without further action by DEQ, as per
17 OAR 340-011-0535(1). If you do request a hearing but later withdraw your request, fail to attend
18 the hearing or notify DEQ that you will not be attending the hearing, DEQ will issue a final order
19 by default pursuant to OAR 340-011-0535(3). DEQ designates the relevant portions of its files,
20 including information submitted by you, as the record for purposes of proving a prima facie case.
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Date Sarah G. Wheeler, Acting Manager Office of Compliance and Enforcement
Page 6- NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER
CASE NO. AQ/AC-NWR-2016-164
EXHIBIT NO. I
FINDINGS AND DETERMINATION OF RESPONDENT'S CIVIL PENALTY PURSUANT TO OREGON ADMINISTRATIVE RULE (OAR) 340-012-0045
VIOLATION NO. I:
CLASSIFICATION:
MAGNITUDE:
Operating an air contaminant source (gasoline dispensing facility) listed in OAR 340-216-8010 without first obtaining an ACDP from DEQ, in violation of ORS 468A.045(1)(b) and OAR 340-216-0020(3).
This is a Class II violation pursuant to OAR 340-012-0054(2)(a).
The magnitude of the violation is moderate pursuant to OAR 340-012-0130(1), as there is no selected magnitude specified in OAR 340-012-0135 applicable to this violation, and the infmmation reasonably available to DEQ does not indicate a minor or major magnitude.
CIVIL PENALTY FORMULA: The fmmula for determining the amount of penalty of each violation is: BP+ [(0.1 x BP) x (P + H + 0 + M + C)] + EB
"BP" is the base penalty, which is $750 for a Class II, moderate magnitude violation in the matrix listed in OAR 340-012-0140(4)(b)(B)(ii) and applicable pursuant to OAR 340-012-0140(4)(a)(C) because Respondent needed to apply for a General Air Contaminant Discharge Permit because Respondent is subject to the Area-Source NESHAP requirements.
"P" is whether Respondent has any prior significant actions, as defined in OAR 340-012-0030(19), in the same media as the violation at issue that occuned at a facility owned or operated by Respondent, and receives a value ofO according to OAR 340-012-0145(2)(a)(A), because there are no prior significant actions.
"H" is Respondent's histo1y of conecting prior significant actions and receives a value .of 0 according to OAR 340-012-0145(3)(c), because there is no prior history.
O" is whether the violation was repeated or ongoing and receives a value of 4 according to OAR 340-012-0145(4)(d), because there were more than 28 occmrnnces of the violation. In accordance with OAR 340-012-0145(4), each day of violation with a duration of more than one day is a separate occU1Tence. Respondent operated the Facility without an ACDP from December 2011 to Janamy 2017.
"M" is the mental state of the Respondent and receives a value of8 according to OAR 340-012-0145(5)(d), because Respondent's conduct was reckless. Respondent owns or operates at least one other GDF in Oregon that has been assigned to the General ACDP, and therefore, Respondent has general knowledge ofDEQ air quality pe1mitting requirements for GDFs. In addition, Respondent was notified by DEQ in a July 20, 2016 Warning Letter with Opportunity to Conect and a September 13, 2016 Pre-Enforcement Notice that it needed to
Case No. AQ/AC-NWR-2016-164 Exhibit No. I Page I
apply for an ACDP. In addition, DEQ provided Respondent with an ACDP application on multiple occasions. By contining to fail to apply for an ACDP until it sold the facility in Januaty 2017, Respondent consciously disregarded a substantial and unjustifiable risk that Respondent would continue, after being notified of the violation, to operate the Facility without an ACDP and in violation of the law. Disregarding this risk constituted a gross deviation from the standard of care a reasonable person would observe in this situation.
"C" is Respondent's efforts to c01Tect or mitigate the violation and receives a value ofO according to OAR 340-012-0145(6)(f), because the violation or the effects of the violation could not be corrected or minimized. Respondent no longer owns or operates the Facility.
"EB" is the approximate dollar value of the benefit gained and the costs avoided or delayed as a result of the Respondent's noncompliance. It is designed to "level the playing field" by taking away any economic advantage the entity gained and to deter potential violators from deciding it is cheaper to violate and pay the penalty than to pay the costs of compliance. In this case, "EB" receives a value of$395. This is the amount Respondent gained by avoiding payment of $432 in petmit application fees from December 2011 to Janamy 2017 for assignment to the General ACDP for GDFs. This "EB" was calculated pursuant to OAR 340-012-0150(1) using the U.S. Environmental Protection Agency's BEN computer model.
PENALTY CALCULATION: Penalty= BP+ [(0.1 x BP) x (P + H + 0 + M + C)] + EB = $750 + [(0.1 x $750) x (0 + 0 + 4 + 8 + O)] + $395 = $750 + (75 X 12) + $395 = $750 + $900 + $395 = $2,045
Case No. AQ/AC-NWR-2016-164 Exhibit No. 1 Page 2
EXHIBIT NO. 2
FINDINGS AND DETERMINATION OF RESPONDENT'S CIVIL PENALTY PURSUANT TO OREGON ADMINISTRATIVE RULE (OAR) 340-012-0045
VIOLATION NO. 6:
CLASSIFICATION:
MAGNITUDE:
Failing to keep and make available to DEQ, records demonstrating the Facility's total monthly volume of gasoline throughput, in gallons, in violation of OAR 340-244-0248(1 ).
This is a Class II violation pursuant to OAR 340-012-0054(2)(a).
The magnitude of the violation is moderate pursuant to OAR 340-012-0130(1), as there is no selected magnitude specified in OAR 340-012-0135 applicable to this violation, and the information reasonably available to DEQ does not indicate a minor or major magnitude.
CIVIL PENALTY FORMULA: The formula for determining the amount of penalty of each violation is: BP+ [(0.1 x BP) x (P + H + 0 + M + C)] + EB
"BP" is the base penalty, which is $750 for a Class II, moderate magnitude violation in the matrix listed in OAR 340-012-0140(4)(b)(B)(ii) and applicable pursuant to OAR 340-012-0140(4)(a)(C) because Respondent violated an air quality rule at its facility that should have had an Air Contaminant Discharge Permit because it was subject to the Area-Source NESHAP regulations.
"P" is whether Respondent has any prior significant actions, as defined in OAR 340-012-0030(19), in the same media as the violation at issue that occuned at a facility owned or operated by Respondent, and receives a value ofO according to OAR 340-012-0145(2)(a)(A), because there are no prior significant actions.
"H" is Respondent's history of correcting prior significant actions and receives a value of 0 according to OAR 340-012-0145(3)(c), because there is no prior history.
"O" is whether the violation was repeated or ongoing and receives a value of 4 according to OAR 340-012-0145(4)(d), because there were more than 28 occurrences of the violation. In accordance with OAR 340-012-0145(4), each day of violation with a duration of more than one day is a separate occunence. Respondent did not maintain monthly volume throughput records over the past five years it owned and operated the Facility. During its July 15, 2016 inspection, DEQ requested that Respondent develop these records from other available infmmation and submit them to DEQ. To date, Respondent has not submitted the monthly volume throughput records.
"M" is the mental state of the Respondent and receives a value of8 according to OAR 340-012-0145(5)(d), because Respondent's conduct was reckless. Respondent owns or operates at least one other GDF in Oregon that has been assigned to the General ACDP, and therefore,
Case No. AQ/AC-NWR-2016-164 Exhibit No. 2 Page 1
Respondent has general lmowledge ofDEQ air quality rules for GDFs. In addition, Respondent was notified by DEQ in a July 20, 2016 Warning Letter with Opportunity to Correct and a September 13, 2016 Pre-Enforcement Notice that it needed to put together and submit to DEQ, records demonstrating the Facility's total monthly volume of gasoline throughput, in gallons. To date, Respondent has not submitted those records. By contining to fail to submit the records, Respondent consciously disregarded a substantial and unjustifiable risk that Respondent would violate Oregon law by failing to sumit records that Respondent is required to produce. Disregarding this risk constituted a gross deviation from the standard of care a reasonable person would observe in this situation.
"C" is Respondent's efforts to c01Tect or mitigate the violation and receives a value of2 according to OAR 340-012-0145(6)(g), because Respondent did not address the violation as described in paragraphs (6)(a) through (6)(3) and the facts do not support a finding under paragraph ( 6)( f).
"EB" is the approximate dollar value of the benefit gained and the costs avoided or delayed as a result of the Respondent's noncompliance. It is designed to "level the playing field" by taidng away any economic advantage the entity gained and to deter potential violators from deciding it is cheaper to violate and pay the penalty than to pay the costs of compliance. In this case, "EB" receives a value of $0 as there is insufficient information on which to base a finding.
PENALTY CALCULATION: Penalty= BP+ [(0.1 x BP) x (P + H + 0 + M + C)] + EB = $750 + [(0.] X $750) X (0 + 0 + 4 + 8 + 2)] + $0 = $750 + (75 X 14) + $0 = $750 + $1,050 + $0 = $1,800
