ILLINOIS POLLUTION CONTROL BOARD
February 25, 1993
ILLICO INDEPENDENT OIL COMPANY,
)
Petitioner,
)
V.
)
PCB 92—173
)
(UST Fund)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
KENNETH R. EATHINGTON, of SUTKOWSKI & WASHKUHN, APPEARED ON
BEHALF OF PETITIONER; and
JAMES G. RICHARDSON APPEARED ON BEHALF OF RESPONDENT.
OPINION AND ORDER OF THE BOARD (by J. Theodore Meyer):
This matter is before the Board on a petition for review
filed November 5, 1992 by petitioner Illico Independent Oil
Company (Illico) pursuant to Section 22.18b(g) of the
Environmental Protection Act (Act). (415 ILCS 5f22.lBb(g)
(1992).)’ Illico seeks review of the Illinois Environmental
Protection Agency’s (Agency) October 2, 1992 partial denial of
reimbursement from the Underground Storage Tank (UST) Fund. A
hearing was held on February 2, 1993, in Danville, Illinois. No
members of the public attended. Neither party chose to file a
brief, but relied on closing arguments.
There are three issues in dispute in this case. The first
issue is whether costs associated with the removal of tanks from
which there was no release are reimbursable. The second dispute
is whether costs incurred in installing a monitoring well which
was destroyed within one month of installation are reimbursable.
Finally, the parties disagree on whether costs incurred in
disposing of contaminated material are reimbursable, where the
company hired to dispose of that material apparently lacked
proper permits.
BACKGROUND
This case involves the removal of UST5 and corrective action
at a convenience store, with gasoline dispensing operations, in
Westville, Illinois. The facility is known as the Apollo Mart.
The Act was formerly codified at Ill.Rev.Stat. 1991,
ch. 111½, par. 1001 et seq.
OI39-O5t~9
2
(R. B at59; Tr. at 18_19.)2 Illico purchased the site from
LePaul Oil Company on September 29, 1989. (R. B at 60.) In
October 1989 Illico became aware that a release of petroleum had
occurred;had
been notifiedhowever, ontheSeptemberEmergency13,Services1989.
Disaster(R.
B at
Agency60.)
The(ESDA)3
Westville site had nine USTs, three of which were leaking. (R. B
at 60.) The tanks which were confirmed to be leaking were not
side by side, but were scattered throughout the tank farm. (Pet.
Exh. 1, 2; Tr. at 21-29.) The contractor who removed the tanks
believes that the leaking tanks were tank nuinbers 1, 3, and 4.
(Pet. Exh. 3; Tr. at 30—31.)
The tanks were taken out of service on September 7, 1989,
and were removed on October 26 and 27, 1989.. (R. ~ at 61-69.)
On February 20, 1990 three monitoring wells were developed and
sampled. A fourth monitoring well, known as MW-4, had been
destroyed “by the ongoing renovation of the facility.” (R. A at
28; •Tr. at 39-41.) In its application for reimbursement, Illico
stated that the three tanks which were leaking were taken out of
service because water was discovered in the tanks, and “a
decision was made to upgrade the tank cluster.” In response to
the question asking why the tanks were removed, Illico stated
“upgradation.” Illico indicated that there had been a release
from those three tanks. (R. B at 61-63.) As to the other six
tanks which were not leaking, Illico indicated that the tanks
were taken out of service “to remove the UST to upgrade”, and
that the tanks were pulled for “upgradation”. Illico stated that
there had not been a release from those six tanks. (R. B at 64-
69.)
On May 9, 1991, Illico submitted its application for
reimbursement from the UST Fund to the Agency. (R. B at 50-51,
59-69.) The invoices reviewed by the Agency covered the period
from October 1989 to March 29, 1991, and.the total amount
requested was $134,178.16. (R. A at 81.) On October 2, 1992,
the Agency issued its decision, finding that, after deducting the
applicable $10,000 deductible, $88,718.40 was reimbursable. The
Agency listed five separate amounts for which reimbursement was
denied. (R. A at 81-82.) Illico filed its petition for review
with the Board on November 5, 1992.
DISCUSSION
Initially, the Board must note that its review of this case
2
“R. A” denotes citation to the Agency record, technical
file, “R. B” indicates citation to the Agency record, fiscal
file, and “Tr.” indicates citation to the hearing transcript.
ESDA is now known as the Emergency Management Agency.
0139-0550
3
has been complicated by the confused state of the record filed by
the Agency. The documents in the record are not presented in
chronological order (for example, a December 3, 1991 A.gency
letter to Illico appears at pages 73-74 of the technical file,
while Illico’s January 6, 1992 response to that letter appears
earlier in the technical file, at pages 53—57), and several
documents are included more than once, without explanation. Most
disturbing is the fact that Illico’s application for
reimbursement is not located in one place. Pages four and five
of the application are found at pages 50-51 of the fiscal file,
while pages one through three are located.at pages 59—69. This
muddled record, coupled with the fact that neither party chose to
file a brief, has made the Board’s review of this case
unnecessarily difficult.
In its petition for review, Illico challenged the Agency’s
determination generally. At hearing, however, Illico indicated
that its challenge to denial items one and two, relating to costs
for concrete replacement and an adjustment for costs lacking
supporting documentation, had been withdrawn. (Tr. at 7.)
Therefore, the three amounts remaining in dispute are $14,338.68
for costs associated with the removal of the six USTs which were
identified as not having a release, $1,797.09 in costs associated
with the installation of a monitoring well ~hich was destroyed
within one month of installation, and $3,127.50 in costs incurred
in disposing of contaminated material. (R. A at 82.)
Tank. Removal Costs
The Agency denied reimbursement of $14,338.68 in tank
removal costs for six tanks, stating that those six tanks were
identified as not having a release. Therefore, the Agency found
that the costs are not corrective action costs, and are not
reimbursable. (R. Aat 82.)
Illico makes two alternative arguments with respect to these
tank removal costs. First, Illico contends that the removal of
the six USTs was indeed corrective action, because all nine tanks
had to be removed to reach and remove the contaminated soil.
Illico points out that the leaking tanks were not contiguous, and
that some of the nine tanks were manifolded together. Illico
argues that there is nothing in the Act which requires that a
tank be leaking in order for its removal to be considered
corrective action. Illico points to the statutory definition of
“corrective action”, and maintains that the removal of the six
non-leaking tanks was “an action to stop, minimize, eliminate, or
clean up a release of petroleum...” (415 ILCS 5/22.18(e) (1) (C)
(1992).)
In the alternative, Illico argues that the Agency
incorrectly apportioned the tank removal costs by allowing
reimbursement of only three—ninths of the total amount of the
0139- 05.5 I
4
unapportioried tank removal costs. Illico contends that there are
certain costs, such as the costs of bringing equipment to the
site, which were incurred whether three tanks or nine tanks were
removed. In support of this contention, Illico submitted an
affidavit from the contractor who removed the tanks. That
affidavit stated that because the three tanks which were leaking
could not have been removed without affecting other tanks, the
costs to remove only the three leaking tanks would have been
$14,100. (Pet. Exh.
4•)4
In response to Illico’s contention that the disputed tank
removal costs were indeed corrective action costs, the Agency
points out that Illico indicated on its application for
reimbursement that the tanks were taken out of service and
removed for “upgradation.” The Agency states that the Board has
recognized that there may be more than one purpose for an action
(Southern Food Park
V.
Illinois Environmental Protection Agency
(December 19, 1992), PCB 92—88), and argues that the decision to
remove the non—leaking tanks was not only prompted by corrective
action concerns. The Agency maintains that there are other means
of remediating soil contamination than removal of the soil.
As to Illico’s alternative argument, that the Agency
improperly apportioned the costs of the tank removal, the Agency
contends that proportionate calculation has been used by the
Agency and upheld by the Board. (Export Packaging Co. v.
Illinois Environmental Protection Agency (April 23, 1992), PCB
91-203.) The Agency states that Illico did not provide any
breakdown of the tank removal costs, so that it was impossible
for the Agency to determine what costs should be assigned to
individual tanks.
After a review of the record and the arguments of the
parties, the Board finds that the challenged tank removal costs
are corrective action costs, and thus reimbursable. We do not
agree with the Agency’s witness, who testified that removing a
non-leaking tank would not constitute an action to stop,
minimize, eliminate, or clean up a release. (Tr. at 83.) We
find nothing in the statute which indicates that a tank must be
leaking in order for its removal to constitute corrective action.
Rather, the inquiry is whether the removal of a non-leaking tank
fulfills the definition of corrective action. In Martin Oil
MarketinQ v. Illinois Environmental Protection A~encv (August 13,
1992), PCB 92-53, the Board recognized that if it could be proven
that the removal of an unregistered tank was corrective action
associated with leakage from a registered tank, that removal
‘I
According to the technical review of bills performed by
the Agency, the total cost of the tank removal was $21,508. (R.
B at 2.52.)
0139-0552
5
costs would be eligible for reimbursement. We find that the same
principle applies to this case: if an applicant demonstrates
that removal of a non—leaking tank is corrective action, it is
irrelevant that there had been no release of petroleum from that
tank.
In this case, Illico presented testimony from its president
that removal of all nine tanks was necessary to remove all
contaminated soil. (Tr. at 32-36.) Although the Agency’s
witness testified that there are methods of remediation other
than excavation and removal (Tr. at 97), the Agency does not
contend that one of these other methods would have been “better”,
or that excavation and removal was somehow incorrect in this
situation. In short, there is no evidence that the excavation
and disposal of the soil did not accomplish its purpose--the
rer~ediationof the contamination.
We are not persuaded by the Agency’s claim that because
Illico stated on its reimbursement application that the non-
leaking tanks were taken out of service and removed for
“upgradation”, costs for removal of those tanks cannot be
corrective action. We note that Illico indicated that all nine
tanks, including the three from which there was a release, were
removed for “upgradation”. (R. B at 61-69.) Therefore, if an
applicant’s answer to the inquiry as to why the tanks w..ere
removed was dispositive, none of the tank costs, including those
for the tanks which were leaking, would be reimbursable. That is
clearly not the case. Instead, as the Board .has repeatedly
stated, the determination whether an activity constituted
“corrective action” is a two—part inquiry: whether the costs
were incurred as a result of action to stop, minimize, eliminate,
or clean up a release of petroleum, and whether those costs are
the result of activities such as tank removal, soil remediation,
and free product removal.
(~,
e.g., Miller v. Illinois
Environmental Protection Agency (PCB 92-49), July 9, 1992;
Enterprise Leasing Co. v. Illinois Environmental Protection
Agency (PCB 91—174), April 9, 1992.)
Just as any other activity, the inquiry whether removal of
non—leaking tanks constitutes corrective action must be made on a
case—by—case basis. As stated above, we find that the evidence
in this case indicates that the costs of removal of the six non—
leaking tanks are corrective action costs. Therefore, we reverse
the Agency’s determination that $14,338.68 in tank removal costs
is not reimbursable.
Monitoring Well Costs
The Agency also disallowed $1,797.09 in costs associated
with the installation of a monitoring well which was destroyed
within one month of installation. The Agency stated that the
costs are not corrective action costs, and therefore are not
0139-0553
6
reimbursable. (R. A at 82.) The disputed costs are the costs
attributable to NW-4, which was destroyed before groundwater
samples were taken from that well.
Illico makes two alternative arguments with respect to the
monitoring well costs. First, Illico contends that it is clear
that the monitoring well was sunk, and that soils were drawn from
the boring which was subsequently finished as MW—4. Illico
maintains that MW-4 was created as a result of a release of
petroleum, and that the monitoring well should be covered
regardless of whether groundwater samples were taken.
In the alternative, Illi~oraises the argument as to
apportioning costs as it made in regard to the tank removal
costs: that there are certain costs which would have been
incurred, regardless of whether three or four wells were
completed. Illico’s president specifically identified the costs
of pressure washer rental and the costs of bringing the crew to
the site.. (Tr. at 41-42.) Thus, Illico contends that it is
entitled to a recomputation of costs excluded by the Agency.
In response, the Agency argues that MW—4 never contributed
to knowledge of the site, and that the Agency cannot pay for
something that has not added to corrective ~btion. The Agency
states that although a soil boring was apparently taken, the
Agency never received any analysis of that bOring. The Agency
also points out that a boring hole must be upgraded into a
monitoring well.
As to Illico’s contentions regarding recomputation of costs,
the Agency’switness testified that the only fixed costs which
would have been incurred regardless of the number of monitoring
wells were $186 in per diem expenses for overnight lodging and
meals, $255 in mobilization and demobilization of the drill rig,
equipment and personnel, and $95 in mobilization and
demobilization of a pickup, equipment, and personnel. (Tr. at
68—69.)
After a review of the record and the arguments of the
parties, the Board concludes that costs associated with the
construction of MW—4 are not corrective action costs, and are not
reimbursable. It is undisputed that MW-4 was destroyed within
one month after its creation, and before any groundwater sampling
from that well was performed. We do not see how the creation of
NW-4, in and of itself, was an action to stop, minimize,
eliminate, or clean up a release of petroleum. We recognize that
MW-4 was created with an eye towards fulfilling these purposes,
but the destruction of the well prevented that fulfillment.
However, because the Agency’s witness admitted that a few costs
would have been incurred regardless of the number of wells
constructed, we partially reverse the Agency’s determination.
The Agency is directed to reimburse Illico for $186 in per diem
0I 39-055k
7
expenses, $255 in costs for mobilization and demobilization of
the drill rig, and $95 in costs for mobilization and
demobilization of a pickup truck. (R. B at 90; Tr. at 68—69.)
We affirm the Agency’s denial of reimbursement as to the
remaining $1261.09 in expenses associated with MW-4.
Disposal of Contaminated Material
Finally, the Agency denied reimbursement of $3,127.50 in
costs associated with the disposal of contaminated material. The
Agency found that these costs are not corrective action, and thus
are not reimbursable. (R. A at 82.) This amount was paid to
Safety-Kleen, who was hired by Illico to dispose of contaminated
product (apparently water). Safety—Kleen apparently mixed that
contaminated product with used crankcase oil, which was not from
Illico’s facility. (Tr. at 54-55.) The Agency submitted an
affidavit from Douglas W. Clay, manager of the Agency’s Disposal
Alternatives Unit, stating that Safety—Kleen did not submit
manifests, nor did supplemental waste stream permits exist, for
the contaminated water to be transported from Illico’s facility
to Safety-Kleen’s Urbana facility. (Resp. Exh. 1.) The record
does contain manifests for the transportation of used crankcase
oil from the Urbana facility to the Breslube facility in Indiana.
(Resp. Exh. 1; R. B at 240—242.)
Illico contends that this cost does indeed meet the
definition of corrective action, in that the action was clearly
taken for the purpose of minimizing or cleaning up a release of
petroleum, and constituted remediation. Illico notes that.
Safety-Kleen has not been prosecuted for the alleged violation,
and that to penalize Illico for an action for which Safety-Kleen
has not been penalized is unfair.
In response, the Agency notes that contaminated material
from a leaking UST is special waste, and maintains that a
generator has some obligations to assure proper disposal. The
Agency contends that it should not reimburse a cost where the
regulations were not complied with in incurring that cost.
After a review of the record and the arguments of the
parties, the Board reverses the Agency’s denial of reimbursement
for the costs associated with disposal of the contaminated
product. We agree that a generator, such as Illico, has some
obligations to assure proper disposal. We believe that in some
cases, a generator’s carelessness in arranging for proper
disposal of contaminated material might result in costs which are
not reimbursable by the Fund. However, this is not a case where
the applicant simply dumped the material in a ditch, or hired an
unlicensed hauler. It is uncontested that Illico retained
Safety-Kleen because of its national reputation and ability to
handle the waste. (Tr. at 44..) There are rio allegations that
Illico, in some way, failed to fulfill its obligation to arrange
0139-0555
8
proper disposal, nor any allegation that Illico itself failed to
obtain some needed permit. The Agency does not contend that, if
Safety-Kleen had properly manifested the material, that the costs
were not of the type which constitute corrective action. Rather,
the costs were denied for reimbursement because of the alleged
failure of Safety-Kleen to comply with regulations under the Act.
In sum, under the facts of this case, we find that the costs at
issue are corrective action costs, and thus reimbursable.
CONCLUSION
In sum, the Board finds that $14,338.68 in tank removal
costs, and $3,127.50 in costs of disposal of contaminated
material, are corrective action costs, and thus reimbursable.
The Board partially affirms the Agency’s determination that costs
associated with the construction of a monitoring well destroyed
before any sampling occurred are not reimbursable. However, the
Agency is directed to reimburse Illico fOr the costs which would
have be.en incurred, regardless of the number of wells.
constructed.
This opinion constitutes the Board’s findings of fact and
conclusions of law.
ORDER
The Board hereby reverses the Agency’s October 2, 1992
determination that $14,338.68 in tank removal costs is not
reimbursable. The Agency’s determination that costs associated
with the MW-4 monitoring well are not reimbursable is only
partially reversed., with the direction that the Agency is to
reimburse Illico for $186 in per diem expenses, $255 in costs for
mobilization and demobilization of the drill rig, and $95 in
costs for mobilization and demobilization of a pickup truck. The
Agency’s determination as to the remaining $1261.09 in monitoring
well expenses is affirmed. Finally, the Board reverses the
Agency’s determination that $3,127.50 in costs for the disposal
of contaminated product is not reimbursable.
This case is remanded to the Agency for disbursement of the
additional $18,002.18 amount, consistent with this opinion and
order. This docket is closed.
IT IS SO ORDERED.
Section 41 of the Environmental Protection Act (415 ILCS
5/41) provides for the appeal of final Board orders. The Rules
of the Supreme Court of Illinois establish filing requirements.
(But see also 35 Ill.Adm.Code 101.246 “Motions for
Reconsideration” and Castenada v. Illinois Human Rights
Commission (1989), 132 Ill.2d 304, 547 N.E.2d 437.)
0139-0556
9
I, Dorothy N. Gunn, Clerk of the Illinois Pollution Control
Board, hereby certify that the abgye opinion and order was
adopted on the
~5~—
day of
1993, by a vote
of
_______
Control Board
0.139-0557