RECEIVED
CLERK’S
OFFICE
BEFORE THE ILLINOIS POLLUTION CONTROL BOA1M~
212003
OF THE
STATE OF ILLINOIS
STATE OF
ILUNOIS
INDIAN REFINING COMPANY, now part ofthe
)
Pollution Control
Board
AWR LIQUIDATING TRUST,
)
)
Petitioner,
)
v.
)
PCB No. 93-71
)
(Permit Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
NOTICE OF FILING
To:
PERSONS ON
ATTACHED
SERVICE LIST
PLEASE
TAKE NOTICE that
on
August
21,
2003,
we filed
with the
Clerk of the
Illinois
Pollution Control Board Petitioner’s Status
Report, a copy of which we served upon
you.
Pursuant to
35 Ill. Admin. Code
§
101.103,
we make this filing on recycled paper.
INDIAN REFINING COMPANY, now
part of the AWR LIQUIDATING TRUST
By:___________________
On
o~tsAttorneys
Damon E. Dunn, Esq.
Daniel T.
Graham, Esq.
Funkhouser Vegosen Liebman & Dunn Ltd.
55
West Monroe Street, Suite 2410
Chicago, Illinois
60603
Phone: (312) 701-6800
Fax: (312) 701-6801
Dated:
August 21, 2003
RECEiVED
CLERK’S
OFFICE
BEFORE
THE ILLINOIS
POLLUTION CONTROL BOARflr~UG
212003
OF THE STATE OF ILLINOIS
STATE
OF
ILLINOIS
INDIAN
REFINING COMPANY,
now part of the
)
Pollution Control
Board
AWR LIQUIDATING TRUST,
)
)
Petitioner,
)
v.
)
PCB No. 93-7 1
)
(Permit Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
SERVICE LIST
Illinois Pollution Control Board
Attention:
Ms. Dorothy Gunn, Clerk
State of Illinois Building
Suite
1150
100
West Randolph Street
Chicago, Illinois
60601
Mr. Kyle Davis
do Mr. Daniel P. Merriman
Illinois Environmental Protection Agency
Division ofLegal Counsel
2200
Churchill Road
Springfield,
Illinois
62794-9276
Facsimile:
217-782-9807
Ms. Carol Sudman
Hearing Officer
Illinois Pollution Control Board
1021
North Grand Avenue East
P.O. Box
19274
Springfield,
Illinois 62794-9274
RECEIVE1~
CLERK’S
OFFICE
BEFORE
THE ILLINOIS POLLUTION CONTROL BOARD
OF THE STATE OF ILLINOIS
I4UG
212003
STATE OF ILLINOIS
Pollution
Control Boczrd
IINDIAN
REFINING COMPANY, now part of the
)
AWR LIQUIDATING TRUST,
)
)
Petitioner,
)
v.
)
PCBNo.93-71
)
(Permit Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
PETITIONER’S STATUS REPORT
Pursuant
to
the
Hearing
Officer
Order
dated
August
7,
2003,
Petitioner
Indian
Refining
Company
(“IRC”),
now
part
of
the
AWR
Liquidating
Trust
(the
“Trust”
and
collectively
referred
to
as
the
“Petitioner”),
through
its
attorneys,
Funkhouser
Vegosen
Liebman & Dunn Ltd., hereby submits this Status Report.
1.
This appeal arises out of the IEPA’s imposition ofcertain permit conditions on
the closure of a land treatment
unit
(D08 1, commonly known
as the “land
farm”) located in
Lawrence County,
Illinois under obligations imposed
by
the 1992
Consent Order entered by
the Circuit
Court of Lawrence
County (“Consent Order”) addressing environmental
issues
at
the former
Texaco-Lawrenceville Refinery (the
“Site”).
In the Consent Order,
IRC pledged
approximately
$2.9
million
in
the
form
of various
irrevocable
letters of credit
(fully
cash
collateralized) to
assure the
completion of remedial
investigations required
by
the
Consent
Order, ofwhich $1,873,300 has been pledged for closure activities associated with the RCRA
closure plans
for the RCRA tank systems and the land farm at the Site.
2.
By agreement ofthe parties and with the approval ofthe Board, this appeal has
leen pending since April
12,
1993,
without a hearing date havingbeen set.
3.
Over the past few years,
much has changed
in the relationship of the
parties
and with the enactment of new environmental laws and regulations that govern the closure of
the land farm and the appropriateness ofthe original
permit.
4.
On March 24,
1994,
IRC
submitted
a settlement proposal to the IEPA for its
consideration
that
was
substantially
accepted
by
the
IEPA.
The
parties
conferred
by
conference call
on August 9,
1994, which resulted in further agreement.
A revised draft ofthe
settlement proposal was circulated to the IEPA on August 23,
1994,
and IRC believed that
an
agreement was imminent.
5.
In mid-October
1994,
IRC
proceeded with additional
soil sampling
at the site
pursuant
to
a sampling pian that
previously had been approved by
the IEPA.
However,
on
October 31,
1994, the IEPA notified
IRC that it was requesting additional sampling locations
and parameters.
Because IRC
already had completed the
originally approved
sampling,
it
suggested
that the
IEPA hold
its
additional
sampling proposals
in abeyance
until
the IEPA
had
an
opportunity
to
review and
analyze IRC’s initial
sampling
results.
The IEPA agreed
with IRC’s suggestion.
6.
In
early
1995,
IRC
began
preparing a
report
regarding the
sampling
results
from
the
October
1994
sampling
event
that
IRC
intended
to
submit
to
the
IEPA
for
its
review.
Due to events affecting IRC
‘
s financial status,
the completion ofthe sampling report
was delayed.
IRC’s delay
was discussed with counsel
for the
IEPA and
with other
IEPA
officials.
2
7.
In late
1995,
IRC’s
stock
was
sold
by
Castle
Energy
Corporation
(CEC)
to
American
Western
Refining,
L.P.
(“AWR
LP”),
after
which
IRC
resumed
work
on
the
report.
IRC’s only form of operational funding was through the IRC Note
assumed by AWR
LP
from
Indian Refining
Limited
Partnership,
which
was
formed by
CEC
to
operate
the
refinery.
8.
On November
6,
1996,
AWR LP
filed for protection under
Chapter
11
of the
United States Bankruptcy Code.
AWR LP’s bankruptcy essentially eliminated IRC’s ability
to obtain funding in addition to the approximate $2.9
million which IRC
had already pledged
pursuant
in
the
letters
of
credit
issued
under
the
1992
Consent
Order
to
complete
its
investigative
and closure
activities.
IRC
did
not
file bankruptcy.
In
or around June
2000,
pursuant
to
the
request
of
IRC,
the
IEPA
reduced
the
letters
of
credit
requirements
by
$100,000
to
allow
IRC
to
use
the
associated
pledged
funds
for
fulfilling
their
current
operational and Consent Order requirements as requested by the IEPA.
9.
Effective
July
1,
1997,
the
Board
adopted
the
TACAO
rules
that
govern
standards for remediation ofcertain contaminated properties in Illinois.
10.
On
July
28,
1998,
the
United
States
Environmental
Protection
Agency
(“USEPA”) proposed adding the
Site to
the National Priorities
List (“NPL”).
63
Fed.
Reg.
40247,
40252
(July
28,
1998).
On
October
9,
1998,
the
USEPA
issued
to
potentially
responsible parties
a Special Notice Letter
and
a
draft Administrative
Order by
Consent to,
including among other parties, IRC, AWR LP, Texaco,
and CEC.
On December
1, 2000,
the
Site was
listed
on
the NPL.
The
State of Illinois
has taken the
lead
in
the
environmental
investigation ofthe Site.
3
11.
In or around
November
1998,
Texaco
began
discussions
with the IEPA
and
EPA concerning remedial investigations at the Site.
It was agreed among IRC
and the IEPA
that
the
remedial studies
and land
farm
closure activities as outlined
in the Consent
Order
would
be
postponed pending resolution of the
Texaco negotiations.
On
or
about June
15,
1999,
Texaco entered
into
an Administrative
Order by
Consent
(“EPA Texaco AOC”) with
the IEPA
and
EPA
to perform
a remedial
investigation
and
feasibility
study
for
the
Site,
including, but not
limited to, the land farm (“Texaco RI/PS”).
On or around December
13,
2000,
Texaco
entered
into
an
Administrative
Order by
Consent
(“Texaco AOC”)
with
the
JEPA,
superceding the EPA Texaco AOC.
The Texaco
AOC provided, among other things,
for Texaco
to
develop
a work
plan and
implement the Texaco
RI/PS.
The
Texaco
RI/PS
activities required Texaco to perform many ofthe same investigations/studies as required by
the IRC Consent Order.
On information and
belief, Texaco has completed its work plan for
the RI/FS.
12.
On May 21,
1999, IRC
and
its counsel conducted a telephone conference with
the
IEPA,
again,
to
discuss,
among other things,
resolution of this
Appeal.
The
IRC
and
IEPA also discussed IRC’s proposed Five-Year Maintenance Plan for the Lawrenceville
Site,
which was sent to the IEPA on March 22,
1999.
13.
IRC
and
its
counsel
again
met
with representatives
from the
IEPA
and the
Illinois Attorney General’s Office
on July
22,
1999
to
discuss the resolution of this Appeal
and the proposed five-year plan.
Those discussions were renewed in 2000.
14.
On October 4,
2000,
a meeting was held with IEPA representatives to
discuss
the IRC
Consent
Order and the land farm closure issues
in
an effort
to
revise the
Consent
Order to
eliminate the duplicate
investigations/studies
that
Texaco
is
currently
obligated
to
4
perform under the EPA Texaco
AOC.
At
that
time,
further
discussions were tabled as the
IEPA
had
not
received
a
final
version
of the
draft
Texaco
work
plan
for
its
RI/PS
to
determine
whether
the
land
farm
would
be
kept
operational
for
proposed
remediation
activities or closed pursuant to the Consent Order.
15.
As
part of the Governmental
Agency Global
Settlement
negotiations (which
continued
through
the
end
of December
2001
and
included
the
IEPA,
EPA
and
other
agencies) pursuant the AWR LP’s First Amended Joint Chapter
11
Plan of Liquidation (the
“AWR
Plan”),
the
IEPA
and
IRC
agreed
the
Consent
Order
would
not
be
amended
or
modified
until
such
time
as
appropriate
work
requirements
could
be
determined
and
the
current work requirements as
outlined
in the Consent Order would
be suspended until
such
determinations
were
made.
Such
determination
was to
be made upon
approval,
or shortly
thereafter, ofthe AWR Plan.
16.
On or about April
23, 2003,
the United States Bankruptcy Court approved the
AWR Plan
and entered appropriate
orders confirming
it.
Under the AWR Plan, AWR LP
ceased to
exist
and AWR
Liquidating
Trust
(“Trust”)
was
formed
as
a Delaware trust
to
manage
the
environmental
issues
relating
the
Site,
including IRC’s
obligations
under the
Consent Order.
Pursuant to the AWR Plan, such IRC obligations assumed by the Trust were
limited to the Consent
Order and any amendments thereof and to the funds currently pledged
by
IRC
to
the
IEPA under the Consent
Order.
As reflected in
Section
6.7 of the confirmed
AWR
Plan, the
IEPA
and the
Trust
agreed to
suspend work
activities
under the
Consent
Order in order to begin negotiations of a new work plan and
a continued pledge of funds to
complete each identified task:
5
Due
to the uncertainty surrounding which of the IRC
investigation
and remediation
obligations under the 1992
Consent Order
may be undertaken
by Texaco,
and upon
agreement between the IEPA and IRC,
the 1992 Consent Order
will not be amended
or modified
until
such time
as
appropriate work requirements for the environmental
studies
and remediationlclosure
activities for the IRC
Property have been established
by
the IEPA
and
IRC.
~
All
of the
IRC
assets and
compliance obligations under
the
1992
Consent
Order
and
any
contractual
obligations
shall
become
assets
and
compliance/contractual
obligations
of the AWR Liquidating Trust.
~
Discussions
and
negotiations
related
to
revising
the
work
plans
and
financial
assurance
requirements associated with the 1992
Consent
Order
are ongoing and are expected
to
continue after confirmation ofthe AWR
Plan.
17.
On information the Trust has received, Texaco has submitted and/or discussed
with the IEPA a plan to close the land farm under its current RI/PS (instead of retrofitting it
for ongoing remediation activities as previously suggested).
In these discussions, the closure
was to
be implemented at a cost substantially
less than the $1.8 million currently associated
with the closure activities
in the 1992 Consent Order.
The Trust also believes that closure of
the land farm under new regulations promulgated under current TACAO and/or similar laws
would
save over
$1.3
million
as opposed to
a
closure
under
the permit
at
dispute
in this
Appeal, while continuing to protect public health and safety.
Thus, the majority of the funds
currently associated with the land farm closure could then be used to perform other remedial
and security activities
at the
Site.
To
date,
the Texaco proposals to the IEPA have not been
made available to the Trust to enable the Trust to comment further on their efficacy.
18.
Pursuant
to
the confirmed AWR Plan,
the Trust has
made
several
inquiries,
both
oral
and written, of the IEPA to re-start the negotiations related to
the
amended
work
requirements
and
reduction
in
the
financial
assurance
requirements.
These
negotiations
should
lead
to
modification
of
the
Consent
Order,
the
dismissal
this
Appeal
and
a
determination of the remediation requirements at the Site.
6
19.
Unfortunately,
until
recently,
the IEPA had not
provided a
timetable
for
the
negotiations
of a revised
set of work requirements
as provided for in
the AWR Plan.
Nor
had
the
IEPA
answered
repeated
requests
to
confer with
the Trust
in
order
to
file
a joint
status report as ordered by
the Board
on June
6,
2003.
The
IEPA has agreed to
a meeting
with the
Trust
personnel
on
August
21,
2003,
to
determine
the
IEPA’s
position
on
the
negotiations
of
a
revised
Consent
Order
and
reduction
in
the
financial
assurance
requirements related thereto.
20.
Without the IEPA’s
continued
cooperation and direction as expected from the
AWR Plan negotiations and confirmed
in the AWR Plan by the Bankruptcy Court, Petitioner
cannot inform this Board how it will proceed in this matter as the Trust’s financial ability to
comply
with
the
Consent
Order
is
limited
to
the
funds
currently
pledged
as
financial
assurances
to the IEPA.
If Petitioner dismisses this Appeal, which the
IEPA has
expressly
requested that it not do,
then the Trust will be required to begin closure activities as provided
for
under
the
current
permit
and
the
current
Consent
Order.
The
IEPA,
however,
may
request
Petitioner to
seek
a new permit
application
in
light of the proposed
RI/PS
work
as
proposed by
Texaco and under modern clean-up standards.
In the alternative, the IEPA may
require Texaco
to perform some or all of the closure activities related to the land farm, thus
necessitating further amendments
to the Consent
Order to
be presented to the Circuit Court
ofLawrence
County and a dismissal ofthis
Appeal.
21.
While the
IEPA
has recently
agreed to
meet
to
discuss
issues related
to the
Site, this
Status
Report must be filed by
August 21
and,
therefore, any further insights
from
the IEPA will not be included herewith prior to its filing.
Petitioner will encourage the IEPA
7
to report to the Board the progress, if any,
on the issues addressed herein in its
status
report
due on September 4, 2003.
22.
Petitioner remains
confident that
a reasonable settlement can be reached with
the IEPA.
IRC
has
filed
an indefinite waiver of the
statutory
decision date in
this
matter.
IRC requests that no hearing date be set until these negotiations are completed and the parties
have exhausted all
settlement opportunities.
A telephonic status hearing has been set
in this
matter for September 26,
2003,
at 9:00 a.m.
Respectfully submitted,
INDIAN
REFINING
COMPANY,
now
part ofthe AWR LIQUIDATING
TRUST
Damon E. Dunn, Esq.
Daniel T.
Graham, Esq.
Funkhouser Vegosen Liebman & Dunn Ltd.
55
West Monroe Street, Suite 2410
Chicago,
Illinois 60603
Phone:
(312) 701-6800
Fax:
(312) 701-6801
Dated:
August 21,
2003
Attorneys
8
CERTIFICATE OF SERVICE
Daniel T. Graham certifies that he caused copies ofthe attached Status Report ofIndian
Refining Company,now
part
ofthe
AWR Liquidating Trust, to
be hand delivered to
Illinois PollutionControl Board
Attention: Ms. Dorothy Gunn, Clerk
State ofIllinois Building
Suite 1150
100 West Randolph Street
Chicago, Illinois 60601
and served on
Mr. Kyle Davis
do Mr. Daniel P. Merriman
Illinois Environmental Protection Agency
Division ofLegal Counsel
2200 ChurchillRoad
Springfield, Illinois
62794-9276
VIA FACSIMILE
at
217-782-9807
and U.S. MAIL
Ms. Carol Sudman
Hearing Officer
Illinois Pollution Control Board
1021
North Grand Avenue East
P.O. Box
19274
Springfield, Illinois 62794-9274
VIA U.S. MAIL
on August 21, 2003,
before the hour of 5:00 p.m.
Da~nieiT. Graham
