State DEC wants Flint Hills to stop spill, file cleanup plan

Photo/Tim Bradner/AJOC

A chemical spill at the Flint Hills refinery near Fairbanks has become a major headache for the company owned by Koch Industries.

A spill of sulfolane, a solvent mostly used in making gasoline, is still spreading off the refinery site through an underground aquifer, state Department of Environmental Conservation officials say.

The spill plume, first detected in 2001 under the refinery, now covers an estimated area of three miles by two-and-a-half miles and a half-mile underground. So far the contamination has affected 312 property owners near the refinery, DEC officials said in a Feb. 20 presentation to legislators in Juneau.

Although the extent of a human health hazard is still unclear, Flint Hills has been delivering bottled water to the affected homeowners.

Another 250 homes in the area have not been affected, but Flint Hill is also supplying bottled water to these homeowners. The delivery is costing the company about $2 million per year, said DEC Director of Spill Response Kristin Ryan.

Flint Hills spokesman Jeff Cook said the water deliveries will continue until a long-term solution is found to ensure safe drinking water.

“From day one our priority has been to protect people and worry about the liability later,” he said.

Flint Hills has spent about $70 million so far on the problem, Cook said. Of that amount, $40 million was paid from a bond posted by the previous owner, Williams Cos., after Flint Hills bought the refinery in 2004. The bond was to pay for cleanup of contamination at the site. The sulfolane spill was known at the time but it was believed to be restricted to the refinery property.

It soon became evident that the spill was seeping off the property, however.

Despite the bond that was posted, Flint Hills feels Williams, and even the state, which owned the land before it was sold to Williams (who had leased it) share some of the liability.

Williams disagrees with this.

In a statement, Williams spokesman Tom Droege said, “We have worked and continue to work with the Alaska Department of Environmental Conservation, Flint Hills and other stakeholders on an appropriate path forward for the ADEC-directed cleanup and remediation of the North Pole site that Flint Hills owns and operates.

“To be clear, Williams’ insurance carrier already has paid $40 million to Flint Hills Resources for overall remediation and cleanup of the site.

“When Flint Hills purchased the property from Williams, the issues of contamination and ongoing responsibilities for remediation were clearly delineated in the agreement that both parties executed. With the $40 million in payments to Flint Hills, Williams already has exceeded the amount of the contingent obligation that the two parties agreed to at the time of the sale.”

Flint Hills disputes this, arguing that Williams has responsibility for the contamination that had spread off the site prior to the sale, and went to court against Williams in 2010. However, Superior Court Judge Michael McConahy ruled in November 2013 that Flint Hills had waited too long to sue Williams and that the case exceeded a three-year statute of limitations that applies to contract disputes. That aside, in his decision McConahy agreed that the chemical that had migrated off the site prior to the 2004 sale was caused by Williams.

The state is now stepping into this. State Attorney General Michael Geraghty said he will soon file a lawsuit against both companies to sort out the liability issues.

It is clear, however, that at least Flint Hills is on the hook as the current owner of the property and operator of the refinery, DEC Commissioner Larry Hartig said.

Also, Gov. Sean Parnell has asked Geraghty and Hartig to meet with parties involved to seek a settlement of the liability issues.

In a March 3 letter to Flint Hills President Brad Razook, Parnell wrote, “Although it might be challenging to get all parties to agree to a quick and fair allocation of responsibility, I have directed the Attorney General and my commissioners to make every practical effort to reach an agreement that will protect the jobs of workers at the refinery, protect the property owners from environmental and related harm, and fairly allocate responsibility among the potential responsible parties.”

The governor was responding to a proposal Flint Hills made informally to state legislators that the state indemnify the company from liability for the spill.

As the responsible party, the state has asked Flint Hills for a plan to clean up the spill but a new point of contention is how much of the contamination has to be removed from soil before it is considered clean. Flint Hills, the U.S. Environmental Protection Agency and the state have different views on this.

An administrative appeal on this point from Flint Hills is on Hartig’s desk now. He will not comment on  it as the decision-maker on the appeal, and he said it may take weeks or even months to get through the administrative process. There could be litigation after that, too.

Cleanup conundrum

Meanwhile, Ryan, director of DEC’s spill response division, said it’s uncertain whether the sulfolane can be economically or even technically cleaned up. Some of the chemical has been detected as deep as 300 feet.

Sulfolane is not biodegradable underground, where it has no contact with oxygen, and it adheres chemically to water, Ryan said. That means that it is moving with the flow of water in the aquifer, seeping off the refinery site and spreading, she said.

“There’s a lot of arguing (about liability) but the point is the sulfolane is still leaving the refinery. Flint Hills has not stopped it, so it’s their responsibility,” Ryan said. “The contamination was known when the refinery was sold. It was disclosed and known that it needed to be dealt with. There are arguments about who owns what molecules, what left (the property) when and where, and the parties disagree over liability, but Flint Hills has still not stopped it.”

Much of the spill seems to have resulted from the sulfolane being stored in an unlined pit on the property, as well as many small spills of gasoline that contained the sulfolane over the years. Ryan said that in earlier years sulfolane was not a regulated chemical, although it now is. Even now it is not considered hazardous, she said, although the effects on humans are still unclear.

In its Feb. 20 presentation to legislators DEC said that high doses of sulfolane can have acute effects on the central nervous system, causing hyperactivity and convulsions, and that chronic exposure of greater than seven years for a human may affect the liver, kidney and spleen. DEC said the chemical does not appear to be a carcinogen, however.

As to cleanup, Ryan said, “the first step is for the responsible party, in this case Flint Hills, to complete a feasibility study of what options there might be.  This solvent seems to break down in the presence of oxygen (when underground it is not exposed) so exposing it,” to the air might be a possibility.

“It would be expensive to get it out of the aquifer, however. It is deep in several places,” she said.

If it is determined that a cleanup is not economically or technically feasible the contamination might have to be left.

“This happens,” at old industrial sites, Ryan said.

The important thing is to ensure that humans are not affected, and in this case the only solution to protect people is to build water lines to the area from the nearby City of North Pole water system, she said. There are as yet no cost estimates for that.

However, Flint Hills has not yet provided the agency with a justification that it is unfeasible to treat the soil.

“They say they can’t work on a feasibility study until the question of an acceptable level of contamination is settled,” Ryan said. “At DEC we have adopted a standard of a sulfolane content of 14 parts-per-billion (ppb) in the water. The EPA has a different standard, 16 ppb, but we decided to go lower as an extra margin of safety,” Ryan said.

Flint Hills wants to use 362 ppb, however.

The issues raised by the contamination go beyond providing safe drinking water, although that is most important, Ryan said. Presence of the sulfolane in the soil could degrade property values in the area, and DEC is also concerned about the watering of gardens in summer if well water is used because that might provide another way for humans to be exposed to the sulfolane

Many of the facts of the case were laid out in Judge McConahy’s court ruling last November.

Williams discovered the sulfolane under the refinery in 2001. At time of sale in 2004, Flint Hills agreed to take responsibility for the sulfolane that was “existing, known and disclosed at that time,” McConahy wrote in his decision.

“As everyone is aware now, the sulfolane released prior to Flint Hills’ assumption of ownership of the refinery had migrated far beyond the contours of the sulfolane identified in the disclosure to the ASPA and the plume had already extended off the refinery property.”

The argument made was that sulfolane that migrated off the premises prior to April 1, 2004, is attributable to Williams. However, there are no indications that Williams and Flint Hills were aware of that when they finalized the sale in 2004, the court decision said.

The chemical has been used at the North Pole refinery since 1985 and is still being used today,” McConahy wrote.

In his decision McConahy also chastised Flint Hills for its delays in drilling test wells to determine the extent of the spread from 2006 and 2008. Consultants to the company had recommended that additional test wells be drilled to identify the source of the new contamination, but the company delayed drilling the wells until 2008, McConahy wrote in his decision.

Tim Bradner can be reached at [email protected].

11/15/2016 - 5:14pm