MEMORANDUM OF AGREEMENT

FOR

RESPONSE, NOTIFICATION AND COMPLIANCE ASSURANCE

RELATIVE TO OIL PRODUCTION SITES AND GATHERING LINE SYSTEMS

Between

Illinois Environmental Protection Agency and

Illinois Department ofNatural Resources

I.

PURPOSES

This

Memorandum

ofAgreement (“MOA”) is entered into between the Illinois Environmental

Protection Agency (“IEPA”) and the Illinois Department ofNatural Resources (“IDNR”) who,

hereinafter, will be referred to collectively as the “Parties.” IEPA and IDNR enter into this

MOA for the following purposes:

• to allocate appropriate roles and responsibilities for IEPA and IDNR relative

tQ

crude oil

or brine releases from oil production sites orpermitted gathering lines, within a

•

cooperative framework;

• to ensure appropriate response to all crude oil or brine releases, such that they do not

constitute a threat to human health or the environment; and

• to promote education ofoil producers and gathering line operators as to IEPA and IDNR

expectations and criteria for spill clean-up, prevention and notification.

II. DESIGNATED

REPRESENTATIVES AND ALTERNATES

The Directors ofIEPA and IDNR will each designate a representative and an alternate to be the

central points of contact for their respective agencies for all matters dealing with or arising under

this MOA. ~ ff~N~7thà hañg~arepi~esentativeor alternate at any time byso notifying~—-1—.-~

the other in writing.

IlL APPROPRIATE

ROLES

ANT) RESPONSIBILITIES

OF

IEPA AND IDNR AND

JOINT SPILLS HANDLING PROTOCOL

This MOA acknowledges that the Parties have appropriate roles to play with regard to releases of

crude oil or brine from oil production sites or permitted gathering lines within Illinois. TEPA’s

role arises from its responsibilities under the Illinois Environmental Protection Act, 415 ILCS

5/1,

et seq. (“IEP Act”) and Title

35

ofthe Illinois Administrative Code to inspect and enforce

against violations of the IEP Act, including, but not limited to, the causing, allowing or

threatening of water pollution or the creation ofa water pollution hazard. IDNR’s role arises

from its responsibilities under the Illinois Oil and Gas Act, 225 ILCS 725/1, et seq. (“lOG Act”)

and Title 62 ofthe Illinois Administrative Code to issue permits to oil production facilities and

enforce against permit violations.

I

EXHIBIT

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The Parties have developed a Joint Spills Handling Protocol which reflects the appropriate roles

and responsibilities of each Agency relative to crude oil or brine releases from oil production

sites orpermitted gathering lines. This Protocol, dated October 7, 1999, is attached to and

incorporated by reference into this MOA. The Protocol describes the practical division of labor

agreed to between IEPA and IDNR for responding to crude oil or brine spills, notifying each

other ofinformation and activities, and assurance compliance from responsible parties.

IV. IMPLEMENTATION

OF

TillS

MOA

A. Each Party will take necessary steps to implement this MOA relative to oil production sites

including the following:

1. The designated representatives ofIEPA and IDNR and ~ppropriate other staff will hold

regular quarterly meetings to coordinate the on-going implementation ofthis MOA; to

share data on releases ofcrude oil or brine; to develop practical procedures for

notification; to collaborate on regulatory development relative to the subject m~.tterof

this MOA; and to coordinate educational and informational efforts to oil producers,

gathering lines operators and the public.

2. The designated representatives of IEPA and IDNR will jointly prepare an annual progress

report on implementation ofthis MOA, with recommendations for improvement andlor

enhancement ofthis MOA, where appropriate, for evaluation by the Directors ofIEPA

and IDNR.

3.

The Parties will work cooperatively to develop necessary statutory or regulatory

proposals to enable IDNR to grant permits to gathering lines 6.5 inches in diameter or

less (outside diameter). It is the understanding ofthe Parties that this MOA will apply

only to those gathering lines which may be eventually permitted by IDNR, after they

have received permits from IDNR.

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4. Each Party agrees to notify the other’s designated representative in writing within three

business days of that Party’s receipt ofarequest under the Freedom ofInformation Act or

a request for production under subpoena related to a release ofcrude oil or brine from ~

production site or peruiitted gathering line, or other information reasonably related to this

MOA.

B. The Parties will also conduct a cooperative evaluation ofthe appropriateness and continuing

usefulness ofthis MOA one year after its effective date.

V. ISSUE

RESOLUTION

In the event that issues arise between the Parties with regard to the subject matter ofthis MOA,

the Parties will negotiate informally to reach a resolution ofthe issues, with appropriate

escalation from the designated representatives ofthe IEPA and IDNR through the Directors of

IEPA and IDNR, as necessary.

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VI.

RESERVATION OF RIGHTS

This MOA does not create nor shall it be construed to create any claim, right or cause of action

for the benefit ofany person not a Party to this MOA against either Party hereto, the State of

Illinois, or any officers, agents or employees ofany ofthem.

VIL

LIMITATION

Nothing in this MOA shall be construed as obligating either Party, the State ofIllinois, or any

officers, agents or employees of any of them to expend any funds in excess of allocations or

appropriations authorized by law.

VIII. MODIFICATION AN) TEIUvIINATION

OF

THIS MOA

This MOA may be modified in writing upon approval ofboth Parties hereto. Either Party may

withdraw from and terminate this MOA at any time, following ten days advance ~itten notice to

the otherParty.

Illinois Environmental Protection Agency

by

omas V. Skinner, Director

Date

—--——-

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IjI:rakfites:moaoilproduction

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JOINT SPILLS

HANDLING

PROTOCOL FOR OIL

PRODUCTION SiTES AN) GATHERING LINES

This protocolhasbeen jointly developed for handling spills from oil production sites and gathering lines in accordance

with applicable law. This protocol addresses roles and responsibilities for spills and the respective agencies,

expectations for cleanup criteria and geographic applicability of regulatory authorities.

Effective October 7, 1999, this protocol includes the Ibliowing principal components:

I.

JDNR-DO&G (Illinois Department ofNatural Resources, Div. OfOil and Gas) will respond to spills ofcrude

oil or brine

from

permitted oil exploration arid production sites and permitted gathering lines (less than

6.5

inches) regulated by ll)NR-DO&G per this protocol document. IDNR regulations will govern at these sites

as further specified below.

II.

DNR-DO&G will also initially respond whenever spills from such regulated sites enter designated waters

ofthe State or create an oil sheen or when a sensitive area (as defined in IV.B.2) is impacted. LDNR-DO&G

shall also immediately notify the EPA Duty Officer of the situation and the spiller’s response actions

thereafter.

Under this protocol, “designated waters” means

those

su.’face waters (i.e. perennial or intermittent, ‘blue

line”

watenvays,

ponds, lakes, and wet lowland areas) shown on current USGS topographical maps and

potable andspecial resource groundwater as defined in 35111.

Ad.

Code 620.

Ill.

IDNR-DO&G will advise EPA when IDNR contractors are activated to achieve control of a spill at a site.

This notification will occur by fhx (217-524-4036) during normal business hours and by telephone (IEPA

Duty Officer) during other times.

IV.

Compliance criteria for handling spill incidents from these regulated sites shall be applied as follows:

A. Except as provided in subsection (b), DNR-DO&G will implement compliance criteria specified in 62

Ill. Adm. Code 240. Such criteria shall be applied, enforced and demonstrated bysampling at any spills

which occur on permitted lease areas and any contiguous land areas affected by the spill, or on grass

waterways and roadside ditches beyond designated waters of the State.

.~

B.

.

EP.A~l.l implernent compliance criteria specified in 35 Ill. Adm. Code 302,620 and 742. Such criteria

shall be applied enforced and demonstrated by sampling at spills that enter

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1. Designated waters of the State or otherwise cause a sheen; or

2. Sensitive areas with: 200 feetofprivate drinking water wells, residences, playgrounds, orparks;

400 feet of community drinking water wells; 100 feet inland of where a spill enters an

intermittent designated water; or 200 feet inland ofwhere a spill enters a perennial designated

water.

V.

IEPA will notify IDNR-DO&G upon receipt of citizen or local official complaints about spill situations that

have not otherwise been reported to IEMA.

VI.

TEPA and IDNR-DO&G will jointly develop a user-friendly guide or workbook for spillers that clearly

explains what is expected in various pill circumstances and provides explicit instructions on regulatory

expectations and how to comply with the expectations including examples of acceptable practices and

documentation.

VII.

IEPA and IDNR-DO&CT will proceed with necessary administrative actions to initiate use of this protocol

within 30 days after adoption. Longer term regulatory changes to address gathering lines will also be pursued

in a timely and cooperative manner.