STATE OF INDIANA

COUNTY OF MARION

)
)
)


SS:

BEFORE THE INDIANA DEPARTMENT
OF ENVIRONMENTAL MANAGEMENT

 

COMMISSIONER OF THE DEPARTMENT
OF ENVIRONMENTAL MANAGEMENT,

Complainant,

v.

CITATION OIL & GAS CORP. d/b/a BOZEMAN–MAIER CENTRAL TANK BATTERY,

Respondent.

)
)
)
)
)
)
)
)
)
)






Case No. 2017-24247-A

 

 

AGREED ORDER

 

Complainant and Respondent desire to settle and compromise this action without hearing or adjudication of any issue of fact or law, and consent to the entry of the following Findings of Fact and Order.  Pursuant to IC 13-30-3-3, entry into the terms of this Agreed Order does not constitute an admission of any violation contained herein.  Respondent's entry into this Agreed Order shall not constitute a waiver of any defense, legal or equitable, which Respondent may have in any future administrative or judicial proceeding, except a proceeding to enforce this order.

 

I.  FINDINGS OF FACT

 

1.             Complainant is the Commissioner (“Complainant”) of the Indiana Department of Environmental Management (“IDEM”), a department of the State of Indiana created by Indiana Code (“IC”) 13-13-1-1.

 

2.             Respondent is Citation Oil & Gas Corp. (“Respondent”), which owns and operates Bozeman - Maier Central Tank Battery, a stationary crude oil production facility with Plant ID No. 051-00057, located at S CR 1875 W in Griffin, Gibson County, Indiana (“Site”).

 

3.             IDEM has jurisdiction over the parties and the subject matter of this action.

 

4.             Pursuant to IC 13-30-3-3, IDEM issued a Notice of Violation (“NOV”) in conjunction with this Agreed Order via Certified Mail to:

 

Curtis F. Harrell, President           CT Corporation System, Registered Agent

Citation Oil & Gas Corp.               Citation Oil & Gas Corp.

14077 Cutten Road                      150 West Market Street, Suite 800

Houston, TX 77069                      Indianapolis, IN 46204

 

5.             During an investigation conducted by a representative of IDEM, the following violations were found:

 

a.       Pursuant to 326 IAC 2-5.1-3(a), prior to commencing construction of any emission unit which has potential emissions of twenty-five (25) tons or more per year of any of the regulated pollutants specified in clause (E) of this rule, the source shall apply for and obtain a construction permit.

Respondent constructed equipment that produces regulated pollutants without first applying for and obtaining a construction permit, in violation of 326 IAC 2-5.1-3(a).

b.       Pursuant to 326 IAC 2-7-2, any major source is required to obtain a permit prior to the operation of equipment that produces regulated emissions.

 

Respondent failed to obtain a permit prior to its operation of equipment that produces emissions, in violation of 326 IAC 2-7-2.

 

c.              Pursuant to 326 IAC 8-1-6, new facilities, (as of January 1, 1980) that have potential emissions of twenty-five (25) tons or more Volatile Organic Compounds (VOC’s) per year, shall reduce VOC emissions using Best Available Control Technology (BACT).

 

Respondent failed to reduce VOC emissions from the stationary crude oil production plant using BACT, in violation of 326 IAC 8-1-6.

 

d.             Pursuant to 40 CFR 60, Subpart OOOO, § 60.5416, for each closed vent system or cover at the storage vessel, a monthly inspection must be performed.

 

Respondent failed to perform monthly visual inspections for each closed vent system or cover at the affected storage vessel, in violation of 40 CFR 60, Subpart OOOO, § 60.5416.

 

e.             Pursuant to 40 CFR 60, Subpart OOOO, § 60.5395(d)(1)(ii), any source with an affected facility must reduce VOC emissions by 95% by no later than April 15, 2014.

 

Respondent failed to reduce VOC emissions by 95% prior to April 15, 2014, in violation of 40 CFR 60, Subpart OOOO, § 60.5395(d)(1)(ii).

 

f.               Pursuant to 40 CFR 60, Subpart OOOO, § 60.5395, any source with storage vessels that produce greater than or equal to six (6) tons per year of volatile organic compounds (“VOC”) constructed or modified after August 23, 2011, must comply with initial compliance demonstrations, work practice standards, recordkeeping, and reporting requirements upon start up for each affected vessel.

 

Respondent failed to comply with initial compliance demonstrations, work practice standards, record keeping, and reporting requirements by April 15, 2014, in violation of 40 CFR 60, Subpart OOOO, § 60.5395.

 

g.             Pursuant to 40 CFR 60, Subpart OOOO, § 60.5420, a source must submit an initial notification of startup, and annual compliance reports for each affected facility and maintain those records for no less than five (5) years.

 

Respondent failed to submit the initial notification for each affected storage vessel by January 15, 2015, the annual reports which were due on January 15, 2016, and failed to maintain the compliance records, in violation of 40 CFR 60, Subpart OOOO, § 60.5420.

 

6.             Respondent installed a flare to reduce VOC emissions in August, 2014.

 

7.             Respondent submitted all necessary reports to comply with 40 CFR 60, Subpart OOOO on August 4, 2016 and has implemented a compliance plan to maintain compliance.

 

8.             Respondent submitted a permit application on June 13, 2016 to resolve permitting issues. Federally Enforceable State Operating Permit (“FESOP”) No. 051-37291-00057 was issued on December 5, 2017.

 

9.             In recognition of the settlement reached, Respondent waives any right to administrative and judicial review of this Agreed Order.

 

II. ORDER

 

1.             This Agreed Order shall be effective (“Effective Date”) when it is approved by Complainant or Complainant’s delegate, and has been received by Respondent.  This Agreed Order shall have no force or effect until the Effective Date.

 

2.             Respondent shall comply with rules listed in the findings above at issue.

 

3.             All submittals required by this Agreed Order, unless Respondent is notified otherwise in writing by IDEM, shall be sent to:

 

Jennifer Bailey, Case Manager

Compliance and Enforcement Branch – Mail Code 61-53

Indiana Department of Environmental Management

100 North Senate Avenue

Indianapolis, IN 46204-2251

 

4.             Respondent is assessed and agrees to pay a civil penalty of Nine Thousand Dollars ($9,000).  Said penalty amount shall be due and payable to the Environmental Management Special Fund within thirty (30) days of the Effective Date; the 30th day being the “Due Date”.

 

5.             Respondent agrees to pay avoided FESOP fees in the amount of Five Thousand Six Hundred Twenty Five Dollars ($5,625.00).  Avoided FESOP fees are assessed for the period of January, 2015 to November, 2017, during which Respondent was operating without the required FESOP permit.  Said penalty amount shall be due and payable to the Title V Investments Fund within thirty (30) days of the Effective Date.

 

6.             Civil penalties are payable by check to the “Environmental Management Special Fund.”  Checks shall include the Case Number of this action and shall be mailed to:

 

IDEM Office of Legal Counsel

IGCN, Rm  N1307

100 N Senate Ave

Indianapolis, IN  46204

 

7.             FESOP permit fees are payable by check to the “Title V Investments Fund.”  A cover letter shall accompany the check specifying that the FESOP fees shall be deposited into the Title V Investments Fund.  The check and cover letter shall include the Case Number of this action and shall be mailed to:

 

IDEM Office of Legal Counsel

IGCN, Rm N1307

100 N Senate Ave

Indianapolis, IN  46204

 

8.             This Agreed Order shall apply to and be binding upon Respondent and its successors and assigns. Respondent’s signatories to this Agreed Order certify that they are fully authorized to execute this Agreed Order and legally bind the party they represent.  No change in ownership, corporate, or partnership status of Respondent shall in any way alter its status or responsibilities under this Agreed Order.

 

9.             In the event that the monies due to IDEM pursuant to this Agreed Order are not paid on or before their Due Date, Respondent shall pay interest on the unpaid balance at the rate established by IC 24-4.6-1.  The interest shall be computed as having accrued from the Due Date until the date that Respondent pays any unpaid balance.  Such interest shall be payable to the Environmental Management Special Fund, and shall be payable to IDEM in the manner specified in Paragraph’s 6 and 7, above.

 

10.          In the event that any terms of this Agreed Order are found to be invalid, the remaining terms shall remain in full force and effect and shall be construed and enforced as if this Agreed Order did not contain the invalid terms.

 

11.          Respondent shall provide a copy of this Agreed Order, if in force, to any subsequent owners or successors before ownership rights are transferred.  Respondent shall ensure that all contractors, firms and other persons performing work under this Agreed Order comply with the terms of this Agreed Order.

 

12.          This Agreed Order is not and shall not be interpreted to be a permit or a modification of an existing permit.  This Agreed Order, and IDEM’s review or approval of any submittal made by Respondent pursuant to this Agreed Order, shall not in any way relieve Respondent of its obligation to comply with the requirements of its applicable permit or any applicable Federal or State law or regulation.

 

13.          Complainant does not, by its approval of this Agreed Order, warrant or aver in any manner that Respondent’s compliance with any aspect of this Agreed Order will result in compliance with the provisions of any permit, order, or any applicable Federal or State law or regulation.  Additionally, IDEM or anyone acting on its behalf shall not be held liable for any costs or penalties Respondent may incur as a result of Respondent’s efforts to comply with this Agreed Order.

 

14.          Nothing in this Agreed Order shall prevent or limit IDEM’s rights to obtain penalties or injunctive relief under any applicable Federal or State law or regulation, except that IDEM may not, and hereby waives its right to, seek additional civil penalties for the same violations specified in the NOV.

 

15.          Nothing in this Agreed Order shall prevent IDEM or anyone acting on its behalf from communicating with the EPA or any other agency or entity about any matters relating to this enforcement action.  IDEM or anyone acting on its behalf shall not be held liable for any costs or penalties Respondent may incur as a result of such communications with the EPA or any other agency or entity.

 

16.          This Agreed Order shall remain in effect until IDEM issues a Resolution of Case letter to Respondent.

 

 

TECHNICAL RECOMMENDATION:

 

RESPONDENT:

Department of Environmental Management

 

Citation Oil & Gas Corp.

 

 

 

By:

 

 

By:

 

 

David P. McIver, Chief

 

Printed:

 

 

Enforcement Section

 

Title:

 

 

Office of Air Quality

 

 

 

Date:

 

 

Date:

 

 

 

 

 

 

 

 

 

 

 

COUNSEL FOR RESPONDENT:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date:

 

 

 

 

 

 

APPROVED AND ADOPTED BY THE INDIANA DEPARTMENT OF ENVIRONMENTAL

MANAGEMENT THIS

 

DAY OF

 

, 2018.

 

 

For the Commissioner

 

 

 

Signed on April 30, 2018

 

Keith Baugues, Assistant Commissioner

 

Office of Air Quality

 

Indiana Department of Environmental Management